While Bitcoin is the number one cryptocurrency in terms of market cap, Ethereum is not so far behind, with its market capitalization of over $177 billion, making it the second leading form of cryptocurrency.
Ethereum has drawn much attention since its creation because it has been able to demonstrate how Bitcoin’s blockchain could be enhanced to new and greater functionality.
Given all this growing attention and major volatility, Ethereum trading has become increasingly popular and can be profitable for traders.
So, if you are interested in how to trade Ethereum, go through this article, where we will show you the steps and how to get started.
In terms of your route to trading Ethereum, there are several trading platforms with different features that allow you to execute your trades.
For example, you can trade crypto CFDs with Libertex, a multi-award-winning online broker. The platform recently cut its fees on all crypto CFDs to zero in terms of commission, swap, exchange fees, and offering tight spreads.
What is Ethereum?
Ethereum is a decentralized digital platform network. Its network works similarly to the Bitcoin network in that it’s built on blockchain technology, what this means is that without the intervention of a third party, financial agreements can be verified and stored by the software.
The network has its native token, ether, like other cryptocurrencies, it leverages a shared digital ledger, this is where all the ether transactions are recorded. All of the data is publicly accessible, transparent, and extremely difficult to alter.
Blockchain technology has a process. Firstly, it starts with miners who have the responsibility for verifying clusters of ether transactions to form what is known as “blocks”, and then secure them cryptographically, which involves the solving of complex algorithms.
New blocks will be linked to the chain of prior blocks, and the miner involved will earn themselves a ‘block reward’ – that is, a set number of ether tokens, all of which are known as the blockchain.
One special feature of Ethereum is that it facilitates smart contracts. A traditional contract will outline the terms of a relationship, whereas a smart contract ensures those terms are fulfilled by writing them in code.
The software automates the execution of the agreement as soon as predefined conditions are met and eliminates the delay and expenses involved in completing a deal manually.
Factors that influence the ETH price
There isn’t one standout factor that influences the price action of ETH, but rather a few to consider:
● Market manipulation – There is a lack of regulation within the cryptocurrency market, which does leave the door open to certain players being able to influence the market by buying and selling in substantial quantities.
● Wider adoption – Consistent evolution continues to be observed with the ecosystem around the ether, as the adoption reaches a wider audience, across independent investors and institutional participants.
● Government regulation – Globally some governments are still adapting to cryptocurrencies, with some implementing supervisory mechanisms and other new guidelines.
● Media coverage – Updates from various sources whether it be positive or negative press. For example, it occurs quite often when there are perhaps security issues or hacks, which can then of course shift the public’s perception of the ETH value.
● Technological advances – The development of its ecosystem is ongoing, with new capabilities and features, that can influence the value of ETH.
Steps to trading ETH
1. Open an account to trade
One popular way of trading ETH can be done via cryptocurrency CFDs. Libertex, a multi-award-winning online broker that offers trading crypto CFDs among other asset classes in one account.
2. Develop a trading plan
It is important to know how you are going to approach the market, in terms of your style, reasons for executing, and timings for trades.
3. Conduct research
Make sure that you are well and truly up to date with all the latest developments surrounding Ethereum and ETH. Digest various reliable sources for news and analysis around the blockchain and its native token.
4. Place a trade
To make your first trade on the Libertex platform, simply search for ETH to see the available CFDs. Then enter the size of your trade, set any stops or limits, and then hit ‘buy’ to open a long position, or ‘sell’ to open a short one.
Trade for more: Libertex
Part of the Libertex Group, Libertex is an online broker that is regulated by the Cyprus Securities and Exchange Commission. It offers a strong suite of CFDs across commodities, Forex, ETFs, cryptocurrencies, and others. Libertex also accommodates commission-free investments in real stocks, market spreads apply.
Over the years, Libertex has been decorated with 40 prestigious international awards and recognitions, including “The Most Trusted Broker in Europe” (Ultimate Fintech Awards, 2022). [1] [2].
Libertex is the Official Trading Partner of Tottenham Hotspur FC and Bayern FC bringing the exciting worlds of football and trading together.
For more information about Libertex, visit their website.
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 87.8% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
