Dec 15, · A crypto trader and analyst known for turning a couple thousand dollars into $, in a summer trading competition says he’s ready for Ethereum to outpace Bitcoin in the new year.. The pseudonymous investor who goes by the name SalsaTekila tells his 58, Twitter followers that he’s accumulated a substantial allocation of the second-largest cryptocurrency in preparation for Feb 21, · These are called tokens and will become an increasingly big part of the cryptocurrency trading landscape. This is a current screenshot from cryptocoin365.de four out of five of the top five currencies, by market capitalization, are built on the Ethereum platform. The other big platform is Omni, which is built on top of the Bitcoin blockchain. Trading ethereum CFDs or actual tokens with a crypto exchange is no different from trading currencies and other financial instruments. You only have to brace for super volatilities where market.
Trading with ethereum or bitcoinEthereum vs Bitcoin: which project has the upper hand in ?
At some point, an equilibrium should be reached between the amount of Ether being lost and the amount being produced. Therefore, from a fundamental analysis standpoint, you need to understand what types of applications are being built on the network and how much demand there is for them.
The quality of the applications will be one factor that determines the value of the Ether. Now here's where things get a little weird. The applications that can be built on top of Ethereum can also create their own currencies. These are called tokens and will become an increasingly big part of the cryptocurrency trading landscape. This is a current screenshot from CoinMarketCap. The other big platform is Omni, which is built on top of the Bitcoin blockchain. Some startups will bolt-on a token to their existing app and use that as a way to raise cash, instead of going to investors.
That's great if the token serves a genuine purpose. However, in the coming months, you are going to see a ton of crapcoin launches initial coin offering or ICO that have nothing to do with value and everything to do with making a quick buck. One example, in my opinion, is the upcoming Kik ICO. I don't see any reason for a messaging app to have its own currency. Where are you going to use that currency outside of the app?
Nowhere, it's a dumb idea. But they will raise a ton of money and investors will probably lose their investment. Be very wary.
A lot of ICOs are just trying to take advantage of the hype and are just launching coins to make money. If not controlled, these crapcoins could damage the reputation of Ethereum and possibly affect the price. Of course, some of these ICOs will succeed. But I think this will be a very, very small percentage. Ethereum a big deal almost everywhere, but it's absolutely huge in Asia, especially China.
So in order to understand how valuable Ether will become in the future, we need to keep an eye on the applications that are coming out of China.
There are several good exchanges out there, so do your research. The exchange you use will depend on where you live, governing laws and personal preference. Luckily, many exchanges allow you to purchase Ether directly. Other smaller cryptocurrencies require you buy Bitcoin first, then exchange it for your target cryptocurrency. Here is a list of the more reputable exchanges out there.
I don't know how long that offer will last, so if that link doesn't work, you missed out. You may have to provide some proof of identification when you sign up on some of these exchanges. This is to prevent money laundering, so just to it. These are more for if you have other currencies that you want to convert to Ether.
In that case, these exchanges make it super easy to do the conversion. No password to remember and you don't have to provide any personal information.
It feels pretty sketchy when you first do it, but I have never had a problem with it. Next, fund your account with a credit card or bank transfer. Usually, the credit card option is faster so I would recommend using that. Getting money into your account with a bank transfer can take as long as a week. The upside with a bank transfer is that your deposit limits will usually be higher. Since there is a lot of upside potential in cryptocurrencies, there are many traders that are taking a buy and hold approach.
So if that is your strategy, you would just buy some Ether and store it in a safe place. Well, there are two options, paper wallets or hardware wallets. I would not recommend storing Ether in mobile apps, computer wallets, exchanges or online wallets for any length of time. Those options are great for short-term transactions, but are not safe for long-term storage. Once your currency is on paper, store it away in a safe place.
When you are ready to cash in the currency, use an online wallet or mobile wallet app to get the coins from the paper to your exchange of choice, or your bank. Some exchanges may give you the ability to go straight from the paper wallet to the exchange's online wallet. To get the detailed Ether paper wallet guide, read this.
Another good option for buy and hold investors is the hardware wallet. Trezor is the most popular one right now. The ideal buy and hold solution would probably be a combination of paper wallets and a hardware wallet.
But it's just a personal preference. Learn more about the Trezor here. Active trading is a little tough because not all exchanges give you the ability to set pending orders and stop losses, like with Forex brokers. But exchanges like Poloniex do allow you to set stop-limit orders.
However, if your exchange does not allow this, you have to setup alerts, so you are aware of market movements and can place trades manually. Exchanges like Coinbase don't allow pending orders. To setup alerts, you can use TradingView. Alerts are only available in the Pro plan , but if you are an active trader, it is well worth it. Add it to your watchlist and click on it. The chart will come up. Then right click on the chart where you want to add an alert.
This is what it would look like. You could also add another alert to let you know when prices are low and it might be a good time to buy. Another potential risk with Ether trading is that not all exchanges allow you to store money in your local fiat currency. Or you may need to jump through a few hoops to be able to do that. So if you sold some Ether that you own, you may have transfer the money back into your bank account in order to lock in your profits.
The problem is that each time you transfer money to and from your bank, that can take up to a week! So what can you do about this? Well, that's where our friend Tether comes into play. As I wrote about here , Tether is not a cryptocurrency that you invest in or trade to make money. But Tether is fantastic for locking in your gains on an Ether trade. Then when you are ready to buy Ether again, simply trade it back on the exchange. No extended waiting times.
Ether trading is still in its infancy, so we don't have many reference points to do proper technical analysis. As I wrote about here , we have only seen the first big wave of cryptocurrency speculation, so I believe that there is still a lot of potential for the currency to go up.
So before you break out your Gann Fan, Fibonacci retracement tool, or star charts…remember that we are trading a very immature market. I believe that there is a lot of potential in this technology, but we also need to limit our risk. It could blow up tomorrow, or best case scenario, there will be a lot of volatility in the currency price. Therefore, simple support and resistance should be good enough to trade Ether.
Buy low, sell high. As you can see, price has already bounced off this level. But based on our very, very limited data set, that seems like the best technical level to watch right now. Also notice the flash crash that happened in June. You should setup an alert, in case that ever happens again.
Again, I can't stress this enough…there will be a ton of volatility in Ether, so be sure to pick a strategy that matches your personality and get into trades for as cheap as possible. Cryptocurrency trading is NOT for the faint of heart. Whew, this guide took awhile to write. So if you found it helpful, feel free to send me a tip in Ether, to this address:.
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A portion of the proceeds are donated to my charity partners. Hi, I'm Hugh. Bitcoin was the first cryptocurrency ever to be created, and it today is the number one decentralized digital asset ranked by market capitalization.
Right behind it in rank is another altcoin that came long after Bitcoin and is coded to wield several unique features above and beyond what Bitcoin can offer. This altcoin is Ethereum, and today, its importance to the cryptocurrency industry and the future landscape cannot be understated.
Ethereum was behind the ICO boom, the DeFi explosion, and now, a trend where non-fungilbe tokens are being sold by individuals. What come next, could shape the future of finance forever.
However, if you had to choose, which asset is best? This guide comparing the cryptocurrencies will highlight all the critical differences between Ethereum vs Bitcoin and explain, which makes a good investment based on your interests.
Here are several more important differences between BTC and ETH along with their origins, a look into the base technology, and much more. Bitcoin was created by the mysterious and pseudonymous Satoshi Nakamoto, and it is the first cryptocurrency ever to exist. The cryptocurrency was designed to be the first decentralized form of sound money and allows users to be their own banks without the need for a third party intermediary.
Only 21 million BTC will ever exist, making the asset incredibly rare and digitally scarce. Even fewer coins are in circulation, with more coins being released as part of a system called proof-of-work, which incentivizes miners to keep the network secure and in operation in exchange for a block reward of 6. The block reward miners received is reduced every four years by half in an event called the halving.
This design mechanic is what is said to cause each Bitcoin bubble and bull market. Bitcoin shares many key similarities with gold, giving it a digital gold nickname and making it valuable to store value and a safe haven asset. But Bitcoin is slow and clunky compared to other cryptocurrencies and lacks any additional layers at which decentralized finance can be built on.
The leading cryptocurrency by market cap also faces challenges in terms of scalability. Bitcoin itself has been forked for this very reason, but it also led to the creation of various altcoins that aim to solve these critical issues and create new financial technologies to power the future.
Ethereum is one of these examples. Its creator, Vitalik Buterin, became enamored with Bitcoin at a young age and sought to improve various aspects of the cryptocurrency. In cooperation with other founders like Joseph Lubin, Buterin launched Ethereum as a platform for smart contracts. These smart contracts can be coded to act as an agreement or contract of any type, mimicking computer code or legal documents like real estate sales agreements or stock sales.
Ethereum can also be used to launch new cryptocurrencies and helped create thousands of new altcoins during the ICO boom of So while Ethereum may not exist without Bitcoin paving the way for more crypto assets, the crypto industry would be very different looking without Ethereum fostering innovation at every turn.
As mentioned, Bitcoin is slow, with transactions taking as long as ten minutes at minimum, but even days when the network is clogged up. Ethereum has also recently suffered from slow transactions and soaring transaction fees due to the DeFi boom and the asset being used to power ETH-based gas transaction fees. New tokens being minted at a rapid pace, such as YFI, Uniswap, Aave, and more, have benefitted Ethereum, but it has made next to no difference for Bitcoin. Instead, the value in these assets is in the underlying network and the substantial impact they can have on the world of finance in many ways.
Bitcoin currently has a capacity of roughly seven transactions per second, while Ethereum is expected to reach as much as , transactions per second during phase 1 of ETH 2. At five times the supply of Bitcoin, supply is less of a factor compared to the leading cryptocurrency by market cap, but it is still essential to supply and demand dynamics causing valuations in crypto assets top rise more quickly compared to other assets.
Ethereum was distributed through a token pre-sale, and Bitcoin was distributed by mining in the earliest days. Both are considered to be well decentralized, and even the SEC has deemed them to be commodities as a result. Ethereum vs Bitcoin have vastly different use cases and target markets, despite both being attractive to crypto investors.
For example, Bitcoin is more of an aspirational store of wealth and payment currency, so users who invest in Bitcoin want to hold it for the long term. Ethereum, on the other hand, is more often used as gas fees in transactions for other tokens and benefits significantly as a result. As ETH is used to fund transactions at rising costs, DeFi users, for example, must buy up Ethereum to pay for associated fees.
Doing so drives up the price of Ethereum.