Yes, bitcoin is the leading crypto since its inception and has continued to dominate throughout. But, Ethereum is not far behind! The market cap of Ethereum is more than 232 billion dollars and it is the second-highest crypto in terms of market cap and trading volume. Garnering support from legends and giants like Mark Cuban, it has gained the status of being one of the most profitable cryptos and investment choices. It is also popular because it is not just a cryptocurrency but is also a global computing platform for running decentralized applications and has a powerful blockchain for crypto transactions.
Pros of buying Ethereum – If you are looking to buy Ethereum in India, you want to make sure that you know why you are investing in it. This means that if you know what to expect regarding your investment and are aware of the advantages, you will know the amount to put in and the efforts to make.
- Volatile – This point is often characterized as one of the drawbacks for cryptos, however, you can also use it to your advantage. Smart investing would require you to keep up with the patterns and trends of the highs and lows, thus recognizing the cyclic pattern. Capitalize on these fluctuations and be a smart investor.
- Liquid – One of the most liquid assets in today’s day and age is Ethereum. Due to the worldwide establishment of Ethereum on different exchanges and trading platforms, it can easily be exchanged for cash or gold, all at a very low fee. This aspect makes it more desirable than bitcoin and can be used to make a good profit in a short while. Investing a certain amount at a certain frequency could also potentially turn ETH into a good long-term investment option.
- Lower risk of inflation – When currencies are regulated by governments, they are at high risk for inflation. Since cryptos are decentralized, Ethereum price is less likely to be drastically affected by meddling and inflation.
- Global Transactions – This crypto allows for hassle-free global transactions without any third-party interference. In other words, the availability to make low-cost transactions in a fast and efficient manner as compared to banks or currency exchange systems is appealing to businesses and individuals.
- Easier mining process – The number of ETH miners is more than those of bitcoin. This means that the chances of people winning rewards as a process of participation in the mining process are increased. The more the miners, the higher the value and the rise in demand and price. The mining process used for this crypto is also less harmful to the environment, and therefore, is more sustainable.
Cons of an Ethereum investment – As important as it is to know the advantages of investment, understanding the potential risks is also equally vital. This would help you decide the amount of investment and the duration with the help of risk assessment.
- Transaction volume – Since Ethereum has ever-growing popularity, the number of transactions happening at the same time is high. This might cause the potential users to have to engage in a period of waiting before they can make their trade. Having a faster blockchain network would be beneficial for both ETH and the users.
- Transactions cost money – Any transfer you make using Ethereum would require you to pay some additional amount to the miners. Therefore, the price that you thought you would have to pay would be slightly more with the addition of this transfer fee. Therefore, often, people simply choose to invest in Ethereum rather than use it for transactions to mitigate this cost.
- Number of tokens – Anything unlimited can have a counterproductive connotation. While it may seem like a good thing that there is no upper limit to the coins, it may also take a turn differently. The volatility combined with this aspect creates cause for some risk in investment.
Looking at the pros and cons, you can create your goal regarding investment and see if Ethereum fits the mark. It is a highly desirable asset, however, you can gauge if it fits your profile by keeping in mind the above points.