Trading ETH to CZK
This currency pair consists of Ether and the krona, the latter being the national currency of the Czech Republic. The base currency is one of the most popular digital assets on the crypto exchanges and it is highly volatile. The quote currency comes from an EU economy with a relatively stable political and economic environment.
Going through the ETH/CZK movements in the past, a few things can be noted regarding its price changes. First, the Ethereum to Czech krone pair exhibits a certain level of short sideways movements broken with a price swing throughout the day. On a higher time frame, the ETH to CZK pair has price breakouts or breakdowns. All that means that traders can make profits as long as they develop the appropriate strategy.
What is Ethereum?
Ethereum was introduced in 2015 by the 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 for 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, €16m).
- By the end of 2015, Ethereum’s price was slightly below $1; by mid-January 2018, it reached its current peak of $1,432.
- 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 Enterprise Ethereum Alliance (EEA) is an organisation developed to enhance the future usability of Ethereum.
- Most of the ICOs (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:
- 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 multimillion-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 over $1m, thanks to an automatic buy order set at $0.10 through which he purchased more than 3,000 ETH.
- The number of crypto channels where ETH is available for trading.
- The number and strength of ETH competitors.
What is the Czech krone (CZK)?
As one of the youngest currencies in Europe, the krona (also referred to as the koruna or “crown”) with the CZK code has been the legal tender and national currency of the Czech Republic since 1993 when it replaced the Czechoslovak koruna. The previous currency was the official currency from 1919 until the dissolution of Czechoslovakia. The Czech Republic was initially planning to adopt the euro as its official currency in 2010. However, the plans were put on hold for an indefinite period.
What affects CZK’s value?
The Czech Republic has a well-diversified industry composed of machine manufacturing, electronics, chemicals, iron and steel, vehicles, and so on. Any changes in these major sectors and industries may have an impact on the CZK value. Changes in export levels may affect the demand and supply for the CZK. Also, attention should be paid to the conditions surrounding the top trading partners, including potential economic disturbances associated with non-EU trading partners such as the US, Russian Federation, China, Turkey, etc.
Following the monetary policy direction and actions taken by the Central bank may provide useful information about the future direction of Ethereum to CZK price movement.
The integration with other EU countries makes the CZK vulnerable to fluctuations in the USD/EUR exchange rate. The forex markets have witnessed a depreciation on the CZK value when the USD became stronger against the euro.
The economy has been attracting a sufficient level of foreign investment. The level of foreign direct investment (FDI) may affect the CZK rate.
New developments and announcements in relation to the country’s move toward the adoption of the euro may influence the ETH to CZK exchange rate.
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