Trading ETH to CAD
The Ethereum to CAD pair includes Ether or ETH, the cryptocurrency of the Ethereum network and the Canadian Dollar (CAD), the national currency of Canada.
Technical analysis of the pair shows a good level of volatility which could bring notable gains. Also, both currencies are very popular and there are a number of fundamental factors affecting the exchange rate.
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 the ETH
- The Ethereum project was successfully crowdfunded in the middle of 2014 when it raised more than $18m (£14m).
- At the end of 2015 Ethereum’s price was slightly below $1 (£0.80), by mid-January 2018, it reached its current peak of $1,432 (£1,132).
- 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 the crypto world:
- 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 June 22, 2017, a multi-million dollar market sell order crashed the ETH price from above $300 (£240) down to $0.10 (£0.08) 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.
What is the Canadian Dollar (CAD)?
First introduced in 1858, the Canadian Dollar (CAD) is the national currency of Canada. The Canadian dollar is also called "Loonie” coming from the nickname for the 1 Canadian dollar currency with the aquatic bird placed on the reverse. Since its introduction, the CAD has gone through different exchange rate regimes. It was part of the golden standard and it switched between the fixed and floating regime, since 1971 until the present day the CAD is a floating currency. The CAD is also labelled as a commodity currency because its value may move along with the movements in commodity prices.
Which factors affect CAD value?
The Canadian economy is often quoted among the 10 largest economies in the world according to the GDP and it is among the largest exporters of crude oil, precious metals and other commodities. Also, the Canadian dollar is among the top 10 traded currencies in the world.
Being labelled as a commodity currency is self-explanatory by itself. CAD value may be under significant influence from changes in commodity prices. Keep track of factors which may impact the prices of commodities such as crude oil, gold, minerals, etc., with special attention to the fluctuations in oil prices.
Close trading relationships with the US means that the CAD may be under significant influence from changes in the USD. Also, monitor the developments and announcements related to other significant trading partners such as China, the United Kingdom, Mexico, etc. Changes in export and import levels may cause an appreciation or a depreciation in CAD value relative to other currencies.
When the trading ETH/CAD pair consider the effects coming from changes in the value of other export and import goods as well as developments in different sectors related to the Canadian economy.
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