Ethereum: Understanding the price increase and its implications
The price of the Ethereum (ETH) has increased lately, and some investors claimed that they had earned a significant amount of crypto currency simply holding half of Bitcoin. However, is that really the case? In this article, we will explore how the price increase of the prices of Ethereum works and what it means for investors.
What triggers an increase in the price of the Ethereum?
Ethereum price growth can be attributed to different factors, including:
- Increased adoption : Ethereum is wider used in decentralized applications (DAPPS), making it more attractive to developers and users.
- Growth of a smart contract : The increasing popularity of smart contracts, which are self-exhibited contracts with the conditions of an agreement written directly in the codec, led to an increase in demand for Ethereum.
3
Buying Half Bitcoin: How does that work?
If you buy half Bitcoin to $ 500 and the price of the Ethereum is increased to $ 1000, how to earn a new amount of crypto currency?
The answer lies in the «trading» concept on exchange. When buying or selling Ethereum, you actually buy or sell a certain number of units (eg ETH-1). The value of these units determines market power.
Scenario 1: Purchasing half Bitcoin at $ 500 and then sells it
In this scenario:
- Buy 50 Ethereum unit (half bitcoin) each of a $ 500.
- You sell them for $ 1000, earning an additional $ 500 (1000 – 500).
- Your net profit is $ 500 ($ 500 – $ 50 starting cost), which means 1 eth.
Scenario 2: Buying the whole bitcoin and then sells it
In this scenario:
- Buy one bitcoin in the amount of $ 10,000.
- You sell it for $ 20,000 (current price).
- Your net profit is $ 10,000 ($ 20,000 – 10,000 USD starting costs), which means 1000 ETH.
Key differences between two scenarios:
- starting cost : Purchasing half Bitcoin to $ 500 has higher starting costs.
- Trading Volume : The more units you buy and sell, the more you will have more trading volumes on your exchange. This can lead to greater profit (or losses) due to the market fluctuation.
Conclusion:
Although buying half of bitcoin may look like a simple way to make a cryptic currency, it’s not always that simple. Ethereum price increase is initiated by various factors, and the entry costs can be significant.
To understand you better, let’s consider the following:
* Trading Volume : You will need to have a sufficient trading volume on your exchange to profit from the purchase or sale of units (eg 50 ETH-1).
* Fluctations on the market
: The value of the Ethereum can quickly vary due to market conditions. A small increase in prices may not necessarily be translated to a significant increase in earnings.
concluded:
Ethereum price increases are powered by various factors, and buying half of Bitcoin at $ 500 may not result in the same profit level as buying full bitcoin and sales for $ 10,000. To earn a crypto currency on Ethereum, you will need to have a sufficient volume of trading, market knowledge and a firm understanding of the underlying mechanics.
Final thoughts:
As with any investment, it is crucial to approaching the investment of Ethereum with caution and thorough research. Although some investors may claim that they have earned significant earnings by buying half Bitcoin at $ 500, it is crucial to check these claims through distinguished sources before they invested such an investment.
I hope that this article provided you with a deeper understanding of the way of increasing the prices of Ethereum and its consequences on investors. Do you have any questions or concerns about investing in Ethereum?
Leave Your Comment