Ethereum: Understanding the increase in prices and its consequences
The price of Ethereum (ETH) has recently risen sharply, and some investors say they have gained a significant amount of cryptocurrencies simply by holding half a bitcoin. But is it really that way? In this article, we dive into how the increase in the prices of Ethereum works and what it means for investors.
What leads to an increase in the price of Ethereum?
Ethereum prices increase can be attributed to various factors including:
1.
- Intelligent growth of contracts : Increasing the popularity of intelligent contracts, which separately adopt contracts with the terms of the agreement written directly to the code lines, has led to an increase in demand for Ethereum.
3.
Purchase half of bitcoin: How does it work?
If you buy half a bitcoin for $ 500 and the price of Ethereum will increase to $ 1,000, how do you earn a new amount of cryptocurrency?
The answer lies in the concept of “trading” on the stock exchange. When you buy or sell Ethereum, you really buy or sell a specific number of units (eg ETH-1). The value of these units is determined by market forces.
Screenplay 1: Purchase of half a bitcoin for $ 500 and then sold it
In this scenario:
- Buy 50 units of Ethereum (half bitcoin) for $ 500.
- You sell them for $ 1,000 and earn another $ 500 (1000-500).
- Your net profit is $ 500 ($ 500 – $ 50 $ starting), which translates to 1 ETH.
Screenplay 2: Buying the whole bitcoin and then selling it
In this scenario:
- Buy one bitcoin for $ 10,000.
- You sell it for $ 20,000 (current price).
- Your net profit is $ 10,000 ($ 20,000 – $ 10,000), which translates to $ 1,000.
Key differences between the following two scenarios:
1.
- Trading volume
: The more units you buy and sell, the more trading volume you will have on your stock exchange. This can lead to greater profits (or losses) due to market fluctuations.
Conclusion:
When buying half of bitcoin, it may seem as a simple way to earn a cryptocurrency, it’s not always that simple. The increase in the price of Ethereum is powered by various factors and entry costs can be considerable.
If you want to better understand, consider the following:
* Volume trading : You will need to have sufficient trading on your stock exchange to find out from the purchase or sale of units (eg 50 ETH-1).
* Market fluctuations : The value of Ethereum may fluctuate rapidly due to market conditions. A small increase in prices does not necessarily translate into a significant increase in earnings.
In conclusion:
Ethereum prices are due to various factors and buying half a bitcoin for $ 500 may not result in the same level of profit as the purchase of full bitcoin and sales for $ 10,000. To get a cryptocurrency on Ethereum, you must have a sufficient volume of trading, market knowledge and a solid understanding of the basic mechanics.
Final thoughts:
As with any investment, it is necessary to approach the investment of Ethereum with caution and thorough research. While some investors may claim that they have received significant profits by buying half a bitcoin for $ 500, it is important to verify these claims through reputable sources before making such an investment.
I hope that this article has given you a deeper understanding of how the increase in the prices of Ethereum works and its consequences for investors. Do you have any questions or concerns about investing in ethereum?