The Ethereum or Ether: What is it?
Originally, the Ethereum was the name given to a platform that uses a technology called “blockchain” and which allows its users around the world to develop online applications through it. Of course, it is possible to create free applications through this platform, other applications have as objective to be paid. It was therefore necessary to create a usable currency on this platform.
This is how the Ether was created, official currency called Ethereum. Since its launching in 2015, the Ether has beneficiated from the recent enthusiasm of investors for crypto currencies such as the Bitcoin, which quickly made it popular. This is the reason why it is now possible to speculate on the price of this virtual currency the same way as in other assets thanks to the trading platforms of CFDs.
Let’s remember also that several crypto currencies have been created since the creation of the Bitcoin. However, the Ether has become in just a few months the second most used crypto currency in the world, the first is still the Bitcoin.
How does the Ethereum works as a cryptocurrency?
The Ether or Ethereum is a dematerialized crypto currency whose function resembles a lot that of its homologue bitcoin. The technology thanks to which the Ether works is called Ethereum. It is in reality a digital system based on channels of blocs.
But contrary to the Bitcoin whose main use is just being a dematerialized currency, the Ethereum presents other functions. In fact, this platform allows you among other things to create various and decentralized applications.
Concerning the asset that you could trade online thanks to CFDs or Ether, it only has the function of crypto currency. It is therefore a digital alternative to traditional currencies whose price changes directly and in real time and which could therefore be traded by traders who have an account to trade with a broker that proposes this type of assets.
As you will see later on, after its first quotation, the Ether has in fact followed a particularly volatile trend upwards and makes thus part of the most profitable assets of this year. This is the reason why it is constantly attracting new investors every day.
What are the differences between the Ether and the Bitcoin?
You are probably wondering what is the difference between the original crypto currency, Bitcoin and this new cryptocurrency, the Ether. However, as we will explain you here, the Ether seems to present some undeniable advantages when compared to its competitor. Even if the Bitcoin is still the most widely used alternative virtual currency around the world, the Ether is quickly approaching its performance and therefore represents a serious competition.
In fact, as we mentioned above, the Ether was not originally conceived as a virtual currency but rather as a service that allows users of the Ethereum platform to monetize the applications that they create.
While the Bitcoin has a time and offer limit, the Ether does not. In addition, the duration of the transactions effectuated with one or the other of these technologies also differ. In fact, a transaction with Bitcoins requires around 10 minutes, the same transaction done with Ether only takes a few seconds. It is this difference that explains the higher volatility and the greater liquidity of the Ether when compared to the Bitcoin.
Finally, another major difference between the Bitcoin and the Ether concerns the owners of these virtual currencies. In fact, when it was created, the Bitcoin was used by early adopters who only own units of this currency. The Ether, however, was created through a crowdfunding operation. This way, it is owned by investors who invested money in this cryptocurrency and therefore bought it.
How does the price of Ether and Ethereum change?
In order to better speculate about the course of the Ether or Ethereum, it is of course necessary to know how to anticipate the future variations of its course. In this sense, you should know the factors that influence its ranking on the market.
The fact that seems to be the most influential at the moment regarding the change in the course of Ether is in fact linked to the Ethereum platform and its evolution. This one regularly crosses steps called “hard forks » which make the platform more powerful and stable. Thus, the reaching of new stages generally allows the price of the Ether to go up on the stock market. However, an incident during one of this crossing stages can also influence the price of Ether. Recently, the Ethereum was hacked during one of these hard forks, which had the effect of decreasing the price of the Ether by almost 30%. Of course, since this incident, the security of the platform has been revised and reinforced in order to no longer have such drawbacks anymore.
Another factor that has greatly influence the change of the course of the Ether is an external factor. It is in fact the value of its direct competitor, the Bitcoin. In fact, given that the Bitcoin remains the original cryptocurrency and the most used alternative currency in the world, its price is directly linked to that of other crypto-currencies such as the Ether. Thus, when the price of the Bitcoin increases, that is interpreted as a sign of a gain of interests by the investors of alternative currencies, pushing the purchase of Ether up as well, causing a tendency to increase its value.
We had also notice recently that the investors that buy Ether are generally investors that already own Bitcoins and who are seeking to diversify their possessions. The Ethereum shows in fact more significant possibilities of growth than the Bitcoin and it is also a flexible asset, which makes it more attractive to traders.
To finish this part about the factors that influence the course of the Ether, we must also talk about the speculative aspect of this strong asset. In fact, you can also base your investment strategies on this value or on a technical analysis of its course. The stock market charts available on CFDs trading platforms will generally give you reliable trend indicators. Do not hesitate to use them.
What are the advantages of the Ether and why invest on the Ethereum?
Choosing to invest your capital on the course of Ether is particularly interesting for the numerous advantages that this asset presents, which we invite you to discover here more in detail through some explanations.
The first advantage of Ether as an investment asset lies in the strong interest that arouses among cryptocurrencies users. Since its launching, the number of new users and of transactions made with this electronic currency continues become more and more numerous every month.
Another sign that you should invest in Ether concerns the stock market capitalization of the Ethereum which takes more and more amplitude and is quickly approaching its competitor the Bitcoin. It is also for this reason that a lot of investors who have invested their money on the Bitcoin are interested today in the Ether and open the position on this value.
Finally, the last advantage of the Ethereum when compared to the Bitcoin concerns risks that are less important here. This difference in the level of risk is primarily due to the speed of the transactions offered by the Ether, which it is only a few seconds, which further protects long-term positions.
Even if it is slightly different from the Bitcoin because of its basic functionality, the Ether or Ethereum represents a serious competition in the crypto-currencies sector and presents a certain number of advantages for private investors who want to trade on its course.
Why is it recommended to trade on the course of Ethereum through CFDs?
We are going to explain you now why CFDs are the ideal instruments to speculate on the course of Ethereum. In fact, the Ether is not a physical asset, to own it requires certain technical and computer skills and a digital portfolio. Which is not the simplest solution to take advantage of the change in the course of this crypto-currencies.
This is the reason why some of the most efficient and qualitative CFD brokers, have started to offer their clients to trade in crypto currencies such as Ether or the Bitcoin through contracts of difference and the same way as any other types of asset such as equities or raw materials. This trading system allows you to speculate by betting on the rise or fall of the course of an asset without actually having to own numerous followers among retail investors and has many advantages such as the following ones:
-Substantial liquidity: selling Ethers is not always easy since it is necessary to have enough demand from users of this cryptocurrency; Thanks to CFDs, you will not need to worry about the demand and will be able to do buy and sell transactions whenever you want and online where a traditional transaction may require more time.
-Multiple investment strategies: CFDs offer numerous possibilities of strategies and allows you to speculate in different ways on the Ether. You will be able to hedge your position with a short position of sale in case of a fall in the course of this asset or place stop loss or take profit orders in order to cut your positions at the right moment and thus protect your capital or cash in profits.
-Maximum security for your transactions: As we mentioned above and even through the Ethereum platform has recently increased its security, it is not completely protected from digital hacking. By carrying out your transactions on a CFD trading Platform, you will avoid any financial risk during your transactions. For that, we advise you to choose a broker that has an official approval, guaranteeing the security of your funds.
Finally, it is much safer and interesting to speculate on the price of the Ether or the Ethereum through CFDs given by a serious broker. For that, you should carefully choose your broker and place the capital that you want to invest in order to start speculating on the market quickly. You will benefit from numerous advantages such as trading signals, market analysis and customizable stock market charts with all the technical indicators that you will need.