Ethereum is a cryptocurrency that can be used for many purposes. It is currently the second largest cryptocurrency by market capitalization. It is not backed by anything and its value is only determined by what others are willing to pay for it.
Investing in Ethereum can be a great way to build wealth. However, it is important to understand the risks involved in making such an investment.
Investing in Cryptocurrency
A cryptocurrency is a digital asset you can buy and sell. Like stocks, they’re a way to participate in new technology and can grow in value over time.
One of the biggest cryptocurrencies is Ethereum. It’s known for hosting decentralized applications, or Dapps, which are programmable apps built by developers using the network’s coding language. It’s also home to popular non-fungible tokens, or NFTs, which are one-of-a-kind digital assets you can purchase and trade.
Ethereum has a high market cap and is 1 of the most liquid coins, meaning that it’s easy to buy and sell on exchanges and online brokerage platforms. Many of these platforms offer mobile apps that make it convenient to invest on the go.
You can also buy Ethereum via managed funds, such as the Grayscale Ethereum Trust or Bitwise Ethereum ETF. These funds track the price of Ethereum and can be bought and sold on traditional platforms and in tax-advantaged accounts, such as TFSAs and RRSPs.
In Which Cryptocurrency Should I Invest?
Investing in cryptocurrency is a risky proposition, and even veteran investors lose money on some of their investments. That’s because the value of a crypto is based on what other people are willing to pay for it.
But, if you’re smart and take the time to research a coin before investing in it, you could make some good returns. Some of the top cryptocurrencies to invest in include Ethereum, Bitcoin, and Dogecoin.
Ethereum is one of the most popular cryptocurrencies and has come close to overtaking Bitcoin this year. It has a lot of momentum and is used by companies and individuals to create blockchain-based apps and services.
Besides being used as a medium of exchange, Ethereum has other uses, including tracking the ownership of non-fungible tokens (NFTs). In addition, its blockchain is also used to build apps and track inventory. But, its transaction fees are expensive, which can hold back adoption. Fortunately, there are ways to minimize the cost of transaction fees by using wallets like those offered by Wealthsimple.
How Much to Invest in Cryptocurrency
One of the most important factors to consider when assessing how much to invest in cryptocurrency is your budget and disposable income. This is because, as with all investing, it’s possible to lose more than you put in, and cryptocurrencies can be very volatile.
Unlike stocks, many cryptocurrencies are not backed by hard assets or cash flow, which means that they must rely on investor optimism and bullish sentiment for returns. As such, it’s vital to do your research and never invest more than you can afford to lose.
Fortunately, cryptocurrency investments can be very affordable, even for investors on a tight budget. For instance, eToro’s minimum investment per trade across dozens of coins is just $10, and a handful of cryptocurrencies — including Dash 2 Trade and IMPT — are currently offering their tokens at presale prices.
Is Safemoon Coin a Good Investment
If you’re looking to invest in cryptocurrency, it’s important to do your research. While popular coins like bitcoin have seen huge valuations, not all cryptocurrencies will succeed. Some are scams and others will lose value over time.
Safemoon is a newer crypto that has experienced volatility since its launch in 2021. While the coin is designed to encourage long-term investment and discourage selling, it’s also a high-risk asset that can quickly lose value.
In addition to its volatile price, Safemoon has faced accusations of fraud and multiple class-action lawsuits. The founders and celebrity endorsers allegedly used a pump-and-dump scheme to drive up the price of the token before dropping it, leaving investors with losses.
Another concern is that a large percentage of SafeMoon’s current supply is owned by the founding team. This can lead to price fluctuations, as major holders (called whales) have significant influence on the coin’s value when they sell. Additionally, SafeMoon’s developers reportedly forced existing holders to switch to a new version of the coin in December 2021 without giving them advance notice.
