Trading ETH/EUR: What to consider
Ethereum is one of the world’s largest cryptocurrencies by market cap. It was the first major blockchain platform to enable developers to create their own blockchain applications, such as smart contracts, dApps (decentralized apps) and even develop their own cryptocurrency. So what is ETH/EUR? Ethereum’s native token, Ether, is traded against several other currencies and cryptocurrencies around the world, and the way how ETH/EUR pair trading works is by pairing it against the Euro.
Euro is the main currency used in the European Union and is considered one of the strongest currencies in the world. Often traded against other currencies, such as the USD and GBP, it is also used to buy and sell cryptocurrencies. European traders who feel more comfortable trading with their native currency, could buy and sell Ethereum using the Euro.
Who should include ETH/EUR in their portfolios?
European crypto traders: The crypto market spans the entire globe, with many traders and investors using various fiat currencies to buy and sell cryptos. European traders who wish to buy Ethereum might be more inclined to do so using their own currency.
Short term traders: Cryptocurrencies are extremely volatile financial assets, and Ethereum is no exception. The ETH/EUR chart could often show significant price movements over the course of a single day, and traders could try to take advantage of these movements to generate short-term profits.
Long term investors: Since its introduction in 2015, Ether has known its ups and downs, including the great cryptocurrency bull of late 2017 and early 2018, which launched its price to an all time high of more than $1,400. Investors who believe Ethereum will go up in value in the long run, could consider investing in ETH/EUR.
Blockchain enthusiasts: Ethereum is one of the most popular blockchain development platforms. It could be assumed that if the blockchain industry continues to grow, Ethereum will be one of the benefactors. Therefore, those who have faith in the technology could buy Ethereum.
What drives the ETH/EUR pair’s price?
When breaking up this pair, it is apparent that each of its sides is from a different asset class, and could therefore be affected by different factors. The Euro is a fiat currency, and is more susceptible to factors impacting mainstream markets. Ethereum on the other hand is a cryptocurrency, and is more affected by factors which generate volatility in the crypto market. Here are some factors which can affect the ETH/EUR price:
The cryptocurrency market: Since Ethereum is the more volatile of the pair, changes and trends which impact the cryptocurrency market can cause significant volatility for its price against the Euro.
Crypto regulations in Europe: The blockchain space is constantly evolving and the debate surrounding the inclusion of cryptocurrencies in mainstream markets is ongoing. In Europe, several EU officials have openly supported blockchain technology. Therefore, any new government regulation regarding the crypto market in Europe could generate volatility on both sides of the pair.
Mainstream market volatility: Often times, the currency market can become volatile around events of high financial significance. For example, if a rate decision by the European Central Bank causes the Euro to rise in value, traders could use this opportunity to buy Ethereum with Euro.
Ethereum and the European economy
Ethereum is prominent cryptocurrency in the global crypto space, boasting the second-largest market cap of all cryptos. However, it is also a blockchain development platform, enabling developers to create their own apps, smart contracts and even create their own cryptos. Therefore, when discussing Ethereum’s relationship with the EU, both factors should be considered.
On the blockchain front, Ethereum is quite popular, garnering much support from mainstream companies such as Intel, BP, Microsoft and other companies comprising the Enterprise Ethereum Alliance. Therefore, its legitimacy as a platform in Europe and the rest of the world is not being questioned, and if anything, is supported by prominent bodies in Europe.
The debate surrounding the Ether crypto (and cryptos in general) is not as one-sided. Since cryptos are traded on exchanges and other platforms, they generate revenue for some investors, which raise questions about taxation. In addition, the debate regarding if and how cryptos should be regulated is ongoing, and any official decision in that matter could have tremendous impact on the crypto market, including Ethereum, and its price against the Euro.
History of Ethereum
Ethereum was founded in late 2013 and programming began the following year. One of the founders, Vitalki Buterin, described the concept in a white paper released prior to the launch. Another founding member, Charles Hoskinson, later became the lead developer for another cryptocurrency, Cardano.
Ethereum was initially created as a platform for harnessing the power of blockchain technology for creating applications other than transaction and money transfer, which were both available on the Bitcoin blockchain. The blockchain’s native currency, Ether, was sold in a crowdsale prior to the platform’s launch, in which participants could buy the token using Bitcoin.
Both the platform and the token became incredibly popular among blockchain enthusiasts and crypto traders, making Ethereum the second-largest cryptocurrency in the world. Moreover, the Ethereum network was used by many other entrepreneurs to create their own cryptocurrencies, which means that the combined value of all cryptos built on the Ethereum, blockchain is actually greater than that of Bitcoin.
Conclusion: ETH and EUR can go hand in hand
Trading and investing in the crypto market is increasingly becoming a more popular practice, with new cryptos joining the market and new instruments, such as a variety of cryptocurrency/currency pairs, becoming available. By pairing leading cryptos, such as Ethereum, with currencies other than the USD, such the Euro, traders are exposed to a wider variety of instruments with which they can diversify their portfolios. The ETH/EUR pair in particular could enable traders from Europe to buy and sell Ethereum using a currency they are more familiar with and which they follow closely.
*This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation.
*Past performance is not an indication of future results. Your capital is at risk
Cryptocurrencies can fluctuate widely in prices and are therefore not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.