When we talk about cryptocurrency, what comes to our mind first is usually Bitcoin. Indeed, with a market cap of $170 billion and the highest YTD return of 28.6%, bitcoin remains the king of cryptocurrency. But in the past month, the spotlight has been stolen by other smaller cryptocurrencies, especially ethereum, the second most valuable cryptocurrency after bitcoin.
While bitcoin price gained 30% in 2020, ethereum has almost seen a 50% increase so far in 2020. Spurred by the uptrend of ethereum, a large number of investors are piling to the market. According to data, the number of its active addresses has increased by 118% since January, while that of bitcoin saw a 49% increase.
For those who are new to crypto, they usually want to start investing in one crypto asset at the beginning. So, should we turn to ETH now that it outperforms BTC in near-term performance returns?
Before you ditch BTC and purchase ETH, let’s take a look at what is ETH and what makes it different from BTC.
What is Ethereum?
Ethereum is not only a cryptocurrency but also an open-source network that enables the deployment of smart contracts and decentralized applications. On Ethereum, people can launch initial coin offerings through ERC-20 token, which makes it one of the most popular crypto-assets. Ether, or ETH, is the native coin that supports the blockchain. Co-founded by Vitalik Buterin in 2015, it has grown by over 1000%.
Ethereum vs Bitcoin
After understanding the core idea of ethereum, we could know the major distinction between these two top cryptocurrencies. Bitcoin is a payment protocol for us to conduct transactions or trade like a commodity. But with Ethereum, we could do more. We could build our own decentralized applications that have their own internal economy. So, if the value of bitcoin lies in itself, we invest in ETH believing that Ethereum the platform will achieve wider application. Choosing one crypto asset to invest between these two would be like choosing between two stocks from different sectors.
Over the past few months, investors’ focus was mainly on Bitcoin because of its third halving. But it is now behind us and nothing big has happened yet. Meanwhile, in the ETH market, the news of the launch of Ethereum 2.0 in 2020 and the DeFi explosion over the past few months further ignite investors’ enthusiasm towards ETH.
Ways To Investing in Ethereum
Although ethereum is still no match to bitcoin in terms of market cap and value, investors are betting on its long-term potential as an ecosystem powering web 3.0 interfaces and dApps, potentially reaching $100,000 in 2024. If you want to join the next boom, here are two of the most popular ways to invest in ETH.
Hodling is the simplest trading strategy in the crypto market, and the principle of hodling is “buy low, sell high”. We have heard of stories of people getting super-rich by buying bitcoin at its early stage. But this is getting harder and harder because the price of bitcoin has grown significantly over the years. With $10,000, we can only buy 1 BTC now, while we only need $240 to buy 1 ETH.
Hodling saves you a lot of energy and time for you just need to purchase the crypto and wait for the crypto to appreciate. But this could take time and you won’t be able to benefit from short-term price fluctuations.
- Margin Trading
The most important thing in margin trading is volatility. As long as there are price fluctuations, there will be opportunities to make substantial profits. In margin trading, traders can profit regardless of which direction the market goes by longing or shorting crypto. They can also borrow leverage from exchanges to magnify their exposure to the market, which can gain substantial profits(loss) with the slightest price swings.
For instance, we open a long contract of 100 ETH at the price of $200 and sell it at the price of $250. Since we borrow 100x leverage from the exchange, we only need to invest 1 ETH as margin. Our profit will be ($250 – $200) * 100 ETH/$250 = 20 ETH.
As we all know, bitcoin has been trapped in a tight range lately and the historically low volatility presents little chances to make profits with margin trading. Luckily, we could turn to ETH, whose volatility is much higher than bitcoin at the moment.
Bexplus – Go-to Crypto Exchange For Beginners and Veterans
Established in 2017 and headquartered in Hong Kong, Bexplus is a leading crypto derivatives trading platform offering 100x leverage futures trading on BTC, ETH, LTC, EOS, XRP and etc. Operating worldwide, Bexplus is trusted by 100,000K users from over 37 countries, including the USA, Japan, Iran, and Saudi Arabia.
Step 1: Create your own account without the risk of information leak. With Bexplus’s no KYC policy, you only need to verify your email. The registration only takes a few minutes.
Step 2: Familiarize yourself with the trading engine. Every user is given a demo account with 10 free BTC for practice. You can quickly learn to trade and improve your skills without risking any money. The powerful tool-kit of Bexplus can help you better analyze the market.
Step 3: Start the real game. No deposit fee required the minimum trading amount is 0.01 ETH. Bexplus supports Bitcoin, ETH, and 11 other cryptocurrency deposits, as well as USD, EUR, and GBP deposits. If you don’t own any crypto, you can buy or swap for crypto through the third portal Changelly embedded in Bexplus. If you have any problems, the 24/7 support is always ready to help you.
Step 4: Take your win! You can withdraw 24/7. Usually, it takes only 30 minutes during work hours. Only email confirmation is required.
Before starting your journey with Bexplus, don’t forget to claim your 100% deposit bonus! Up to 10 BTC is given and the profits gained with the bonus are withdrawable. 10% off of the transaction fee is also available for active users.