To explore the risk of Ethereum (ETH) in the trading context
The cryptocurrency world has experienced great growth and popularity over the years. Among them, Ethereum (ETH) has become the most important player of space due to their innovative intellectual contract platform, decentralized financial (Defi) functions and strong demand for developers and consumers. However, like any other investment or financial activity, cryptocurrencies are trading with the risk of careful consideration.
** What is Ethereum?
Ethereum is an open source decentralized Blockchain platform that allows intellectual contracts and decentralized programs (DAPPS). It was first started by Vitalik Butinin 2015. And has since become one of the largest and most successful cryptocurrency market capitalization. ETH is a native Ethereum network cryptocurrency used to pay for operation fees, create new operations and achieve various intellectual contracts.
Risk associated with Ethereum (ETH)
While trade in ETH can be profitable, it also arises with several risks that investors need to know:
- volatility : ETH price is very volatile and significant fluctuations in about short periods. This volatility makes it difficult to predict the future result of the ETH and can cause significant loss if not properly controlled.
- Investors must be very careful when interfering with their ETH and using online exchanges.
- Regulatory uncertainty : The cryptocurrency regulatory environment is still developing, government and institutions impose various ETH restrictions. This uncertainty can affect the price of ETH and influence investors’ solutions.
- Manipulation of the market : The Ethereum network is not protected from manipulation in the market, which can be caused by malicious characters trying to influence the price or creative artificial bubbles.
- Risk of Limiting
: Ethereum market capitalization is relatively low compared to other basic cryptocurrencies such as Bitcoin (BTC). This limited liquidity can lead to differences in buying and selling ETH at favorable prices.
Additional risks associated with Ethereum
In addition to this risk, there are several other trading ETH:
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- Network congestion : Ethereum network is a decentralized platform with a limited capacity causing congestion and possible delay in operation.
To soften the risk
While trade in ETH is at high risk, there are several steps that investors can take to relieve the risk of dissertation:
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- Be informed : Constantly monitor market trends, regulatory changes and news related to ETH trade to make reasonable decisions.
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