Cryptocurrency is more than just a hot buzzword that is trending across the Internet. It is now a legitimate type of currency that is being used to conduct transactions, but also as an investment. While Bitcoin is undoubtedly the most popular and significant type of cryptocurrency available today, Ethereum is usually considered to be a close second. In fact, when you learn how to invest in Ethereum, you may be able to ride the next big cryptocurrency wave.
What Does It Mean to Invest in Ethereum
Before you learn how to invest in Ethereum, you need to know what this type of investment entails. Ethereum is a type of Internet-based currency. It is not backed by gold or by a government’s good word. Instead, its price is largely determined by the demand for it in the marketplace as well as by its scarcity. Because an Ethereum investment is based on the value of the currency at any given time, you should be aware of the incredible volatile of cryptocurrencies in general.
Ethereum thus far has not had the extreme price volatility that Bitcoin has had, but it certainly has had its fair share of days with large price swings. These swings present those who make a savvy Ethereum investment with the opportunity to make a pretty penny, but they also present the possibility of financial loss related to risk.
How to Invest in Ethereum: Some Strategies
Despite the possibility for financial loss, you may still be interested in learning how to invest in Ethereum. After all, without taking some risk, you may not position yourself to generate an incredible profit as other investors have already enjoyed. These are some of the leading ways that you can profit from an Ethereum investment.
1. Learn How to Buy Ethereum
There are ways to profit from Ethereum without directly buying coins. However, many of the money-making possibilities are directly related to buying and selling coins. When you know how to buy Ethereum coins, you can then determine an effective investment strategy. There are numerous exchanges that are available online, such as Coinbase, Coinmania, or Bitpanda. Some are more reputable than others. So you should conduct thorough research about security, reliability and fees before deciding which exchange to use. Exchanges allow you to open a wallet and to exchange other currencies, such as Bitcoin or the U.S. dollar, for Ethereum coins.
An alternative to buying coins in this manner is to buy them from a cryptocurrency ATM. Most cryptocurrency ATM machines are focused on Bitcoin transactions, but there are a few hybrid machines in select locations. Some investors even trade currency directly through personal or direct transactions. While it can be difficult to locate such investors, this option can eliminate the need to pay a transaction fee.
2. Develop an Investment Strategy
After you purchase your Ethereum coins, you must then decide how you plan to manage your investment to generate a profit. There are two primary investment strategies to consider when you want to know how to invest in Ethereum. First, you can profit on price fluctuations in Ethereum through frequent buying and selling transactions.
This is similar to day trading in the stock market. While it can be profitable, there is also inherent risk associated with it. After all, you cannot predict which way the market will turn. In addition, currency prices fluctuate around the clock every day of the year, including when you are sleeping. This adds to the risk.
The other type of investment strategy to consider is a long-term investment. With this type of investment, you purchase Ethereum at today’s price, and you plan to ride through the ups and downs for months or years. Ethereum’s price has enjoyed a general upward trend on average despite regular downturns. With this in mind, you may expect to profit from a long-term hold. However, be aware that there is talk of a cryptocurrency bubble, and this potentially could cause the price of Ethereum and other cryptocurrencies to plummet.
3. Mine Ethereum
All cryptocurrencies can be mined. Miners are usually paid in the form of cryptocurrency that they have been working with. To mine Ethereum, you need a powerful machine, the right software program and ample time. This is a labor-intensive project, but it is a great way to obtain Ethereum coins when you cannot afford to buy them with your own funds.
4. Look for Funds
When investing directly in Ethereum coins, there is a considerable risk for loss related to price fluctuations. There is also a risk of loss related to hacking or other similar technological or criminal issues. If you want to avoid some of these risks yourself, an alternative is to invest in funds or stocks that are targeted at Ethereum in different ways.
The primary fund for cryptocurrencies available right now is Bitcoin Investment Trust, but there is not currently a major Ethereum fund. With the potential for a new fund to be launched soon, you should consider researching this option periodically as needed.
5. Think About External Money-Making Opportunities
You could also turn your attention to other ways to profit from Ethereum without a direct investment in the value of the coins or currency. For example, you could invest in an Ethereum ATM. With an ATM placed in a strategic location, you could generate a small profit from transactions fees charged on each transaction.
Another idea for making money off of Ethereum or other cryptocurrencies is to launch a blog or article-based website. This website could provide investors with all of the information that they need to stay informed about market changes. The actual creation and updating of the website will not make you money. However, when your website becomes very popular and has a significant amount of steady traffic, you can sell ad space to companies. The ad revenue can create a healthy and generally stable profit for you to enjoy.
Where to Buy Ethereum – Best Ethereum Exchanges
Because the primary methods to use when you want to know how to invest in Ethereum are to buy coins yourself and to use a unique investment strategy, you need to know where to buy your coins. Exchanges such as Coinbase and Gemini are popular platforms. You can simply create an account and fund it as desired with your current currency. Then, you can buy and sell currency as desire.
Keep in mind that wallets on these platforms provide you with quick access to the funds, but they are also not as secure as vaults. Vaults are more secure, but trading activity may take several days to complete. With this in mind, short-term investors may use wallets more effectively, and long-term investors may feel more comfortable using vaults.
Because Ethereum is still available at a much more affordable price than Bitcoin, there is potentially more opportunity for profit from a long-term hold. However, you can see that there are many ways to profit from this cryptocurrency. If you have any other money-making ideas or tips, share them in the space below.
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