Trading ETH to BTC
ETH to BTC, or Ethereum to Bitcoin, is a popular currency pair as it is composed of the most popular cryptocurrencies. This allows developing trading strategies based mainly on the crypto market factors.
Depending on the time frame, the ETH/BTC price can move in a trendy direction and the value may make a range-bound fluctuation. Also, the ETH to BTC exchange rate has occasional price swings along with breakouts or breakdowns.
The Ethereum to BTC pair may fluctuate by more than five per cent within a 30-day period. The Ethereum to Bitcoin daily price change can reach 10 per cent depending on what’s going on in the crypto market.
What is Bitcoin?
Since its introduction in 2009, Bitcoin has had a significant impact on financial markets and trading. Despite the scepticism related to BTC in the early years, it is now one of the most actively traded cryptocurrencies in the world. Bitcoin is a base or quoted currency in tens of currency pairs with a daily trading volume reaching tens of billions of pounds.
Here are some interesting facts about BTC:
- - At the beginning of 2010, Bitcoin price was only $0.003 and you were able to buy more than 300 Bitcoins with $1. Today, $1 can be used to cover only a portion of your trading fees because BTC has appreciated substantially since then.
- - Although the name Satoshi Nakamoto is associated with the invention of Bitcoin, in reality, the creator (or creators) of Bitcoin is unknown.
- - Losing your crypto wallet private key most likely means that you can no longer access your Bitcoins, they are lost forever. So, find a safe way to keep your private key.
- - The Bitcoin supply is limited to 21 million coins.
- - In September 2021, El Salvador became the first country to make Bitcoin legal tender.
- - The first real-world transaction in Bitcoin was made in 2010 when Laszlo Hanyecz paid 10,000 BTC for two pizzas which were worth only $30. In today’s market, these Bitcoins would be worth roughly $622 million.
Which factors affect Bitcoin value?
The supply and demand for Bitcoin have a major influence on its price. The cost of mining Bitcoins also affects the value of BTC, in a way that higher costs would imply the BTC value should increase or mining would be unprofitable. The number and strength of competitive cryptocurrencies and the number of currency exchanges that quote the BTC can positively or negatively impact BTC value. Moreover, different regulations and legal issues can naturally affect the value.
What is Ethereum?
Ethereum was introduced in 2015 by a Russian-Canadian programmer Vitaly ‘Vitalik‘ Buterin. It is an open-source platform that utilises blockchain technology to create and execute distributed applications (DApps). Users can create or join so-called ‘smart contracts‘ directly without third parties, limiting the possibility of fraud.
Ethereum is commonly used as a name of the associated cryptocurrency but in fact Ethereum is the system or network while Ether or ETH is the native currency. Users need to have Ether when they want to execute a certain transaction through the system.
Some interesting facts about ETH:
- - The Ethereum project was successfully crowdfunded in the middle of 2014 when it raised more than $18m.
- - At the end of 2015, Ethereum’s price was slightly below $1. By mid-May 2021, it reached an all-time high of $4,362.
- - Unlike some other cryptocurrencies, there is no maximum supply cap for Ether.
- - Ether can be created through ‘mining‘ – users receive a reward when they complete a mathematical task and verify transactions.
- - The Ethereum Alliance (EEA) is an organisation developed to enhance the future usability of Ethereum.
- - Most of the ICO (Initial Coin Offerings) are hosted on the Ethereum blockchain.
What affects Ethereum’s value?
The factors can be divided into two groups – the ETH related and those affecting the general cryptocurrency market.
Ethereum-specific factors are:
- - The demand for ETH, which is not driven solely by trading activities.
- - The acceptance of the Ethereum system by more established financial institutions.
- - The increased adoption of smart contracts hosted on the Ethereum platform and the inflow of new users will increase the demand for ETH.
- - The degree of mining profitability.
- - Improvements in the Ethereum system in the future.
General factors related to crypto:
- - Changes in regulatory laws and regulations regarding the legality and usage of cryptocurrencies.
- - Potential market manipulation by large participants or so-called crypto whales.
- - Speculative trading – on 22 June 2017, a multi-million-dollar market sell order crashed the ETH price from above $300 down to $0.10 in a couple of seconds, although the price did bounce back within minutes. One trader reportedly made more than $1m, thanks to an automatic buy order set at $0.10 through which he purchased over 3,000 ETH.
- - The number of crypto channels where ETH is available for trading also affect its value.
- - The number and strength of ETH competitors.
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