Safe Way To Buy Ethereum
Importantly, ethereum is also escaping the bearish sentiment affecting the stock market. Risk assets like stocks are struggling in response to persistently high inflation in the US and the worrying news that price rises have become embedded in the broader economy. For example, the wage-price spiral is now in effect, and inflation slowed only slightly to 6.4% in January of 2023 from 6.5% in December, less than market forecasts of 6.2%.
safe way to buy ethereum
The macro backdrop for ethereum is bearish. We analyse various on-chain/flow metrics for ethereum, which are neutral. Overall, we are neutral to bearish on ETH in the short term. Therefore, if you have a two-to-four-week horizon, now may not be a good time to buy ethereum.
Furthermore, the correlation of ethereum to NASDAQ started to increase sharply just as US interest rates started to rise. This is a common occurrence throughout history. When the liquidity tap turns off, usually by central banks raising rates, the correlation between diverse assets shoots up. This time appears no different.
One exercise is to see how low prices could get were the NASDAQ to suffer a 2000-style crash. After all, the ethereum and NASDAQ correlation was around 80% until recently. So where the NASDAQ goes, ethereum follows.
Back in 2000, the NASDAQ suffered a 78% drawdown. Currently, the NASDAQ is in a 30% drawdown. A repeat of the 2000-style drawdown would put the NASDAQ at 3,500. So where would crypto be if NASDAQ were trading at this level? We estimate a regression between ethereum/bitcoin returns and NASDAQ returns from 2020 onwards. Based on this relationship, we find:
Should the currently restrictive environment of rising interest rates and recession risks subside, we could see ethereum return to its all-time high of $4,379 or even beyond. However, we caution that this scenario is unlikely in the short term and, like with any investment, it is impossible to say with certainty how high ethereum will go.
On the flip side, overregulation could stifle innovation by increasing censorship. The ongoing regulatory backdrop will be key to monitor. Lastly, on ethereum specifically, there is the much-anticipated merge. We previously covered its potential implications. The punchline was that it should be bullish for ethereum.
We think ethereum is a worthwhile long-term investment. However, we also note that ethereum is extremely volatile. That means it experiences large price movements over short periods. Before you invest in ETH, you must understand the risks involved: you could lose all or a large portion of your investment. Never invest money that you cannot afford to lose.
However, to invest in cryptocurrency, we must first understand it. Crypto tokens are unlike any traditional asset class. And they are all different. Just because you understand bitcoin, does not mean you know how ethereum works. Our video on bitcoin and ethereum fundamentals can help you understand how ethereum prices fluctuate and how to assess trends in important ethereum metrics. And the video below explains other cryptocurrencies that might put ethereum at risk.
Your exposure to ethereum needs to be appropriately sized so that you can survive 50% to 80% drawdowns. Drawdowns provide good entry levels for exposure, but we would not go max long in an environment of rising central bank rates and falling global growth momentum.
One way to diversify your portfolio is with stablecoins, although these have also been very high-risk following the Terra debacle. Our recent analysis has explored how safe is tether and which stablecoins could fall next. We advise only a very small allocation to crypto and prefer diversification with more traditional asset classes.
For trading ethereum over the next two to four weeks, we are neutral to bearish. That means we expect stable to falling prices. For 2022-3 in general, we think recession risks pose a risk to ETH and so now might not be the best time to buy ethereum if you have a medium-term outlook. We think ethereum is a good long-term investment for the next one to three years and are bullish overall. That means we expect prices to rise in the long term.
As with all investments, the value of ethereum can rise as well as fall. While it is unlikely that ethereum will suffer a complete loss of value, investors must be prepared to suffer drawdowns of between 50% and 80%. We recommend small allocations and diversification of your portfolio. Never invest what you cannot afford to lose.
Traditional wisdom says you should buy low and sell high. But whether you should sell ethereum depends on your investment horizon, risk appetite and financial goals. Although some website speculate that certain days of the week are better or worse then others for selling ethereum, we believe that any decision to buy or sell should be based on analysis of crypto fundamentals.
We think a small allocation to ETH makes sense in the long term. However, we caution against investing in ethereum too heavily as cryptocurrencies are extremely volatile and often subject to large downturns.
Ethereum has been running on two different blockchains since April 2022. One operates using proof-of-work, like bitcoin. The other is a test chain what uses proof-of-stake. The merge is an upcoming event where these two blockchains will combine, ending proof-of-work. It is expected to happen in Q3/Q4 2022, and it will eliminate the energy-intensive mining required in proof-of-work. Guest author Nikhil Shamapant explains more about the ethereum merge and what it could mean for ETH price in 2023 in his recent article.
eToro offers the overall best place to buy Ethereum in the UK. At this platform, you will have the safety of the FCA behind you, as eToro is a fully-licensed brokerage. Moreover, the platform is also regulated by the SEC, ASIC, and CySEC. You can buy Ethereum in the UK here on spread-only basis, which means that you only have to cover the bid/ask mark-up.
We also like Coinbase for its commitment to keeping your digital currency investments safe. Some of the security tools offered by this exchange include IP address and device whitelisting, 2FA, and cold storage. Finally, Coinbase also offers crypto debit card that allows you to spend your tokens in the real world.
Some people will choose to sell their Ethereum very quickly, while others will want to hold onto it. Most ETH exchanges will allow you to withdraw your currency to an external wallet under your own control. This can come with many benefits, but the main reason is to keep your Ethereum safe. Using a hardware crypto wallet with very limited internet connectivity is the best way to keep a cryptocurrency secure.
Everyone must of course make this decision for themselves, based on their own personal finances and investment strategy. At Kriptomat, we simply provide the tools needed to make joining the world of Ethereum Classic and cryptocurrencies as simple and safe as possible.
Furthermore, Bitcoin ATMs are arguably safer than using exchanges because a personal bank account is not required. Instead, users only need a secure wallet to buy and sell cryptocurrency at a Bitcoin ATM.
The essence of cryptocurrency is the ability to own private digital cash without having to rely on any intermediaries and send or receive them in a censorship-resistant way. At least for now, getting cryptocurrency via PayPal is a safe way to get exposure to the asset class, but it does not let you use it in ways it was made to be used - as a free and open peer-to-peer (P2P) financial system without trusted intermediaries.
First, you can forget the idea to use PayPal to buy Ethereum directly on regular crypto exchanges. Yes, this may change in the future, but, at the moment, your safest bet is to fire up your PayPal to get non-limited Ethereum via other trading platforms.
Trezor hardware wallets are the safest and most resilient way to secure Bitcoin and cryptocurrency assets offline. Trezor wallets never expose your digital asset information to an insecure environment connected to the internet.
Most beginners buy cryptocurrency through a centralized exchange, and ethereum is no different. Centralized exchanges are easy to join and simple to use, with familiar navigation tools and payment processing.
Instead of trusting an exchange company to safeguard their funds, buyers and sellers on decentralized exchanges use a type of code called smart contracts. You must have a wallet to trade on a DEX, but they have fewer geographical restrictions than centralized exchanges and some, like LocalCryptos.com, let you buy ETH and other coins with traditional payment methods.
The safest option for the purchase of Ethereum is to use a licensed Ethereum platform with high liquidity. The options I have listed in this article all enjoy an excellent reputation when it comes to safety. However, how you store your Ethereum after your Ethereum purchase is paramount to keeping it safe from hackers and security breaches.
A digital wallet acts in much the same way as a physical wallet such as you would use to store your cash. However, a digital wallet can be on a mobile device, desktop, or web-based and your digital currency is kept safe using private keys.
A private key is used to keep your cryptocurrency safe. It acts in much the same way as a password for your UK bank account would and should therefore never be shared with anyone. Private keys are usually made up of a long sequence of numbers and letters. Without your private keys, you cannot access your Ethereum investment so you should make sure you keep them safe.
When considering how to buy Ethereum UK, you will also need to consider how to store your cryptocurrency. A hot wallet is a digital place where you can store Ethereum. This wallet is always connected to the internet which makes it easy to store, send, and receive tokens with public and private keys to ensure your assets are safe. 041b061a72