Trading ETH to USD
Both currencies are among the most popular in their markets. It means they have great trading volume, high demand and enough price fluctuations to make a profit.
During the trading day, ETH/USD value can move less than five per cent with occasional fluctuations of more than 10 per cent. Ethereum to USD value may also often move in a clearly defined trend with different degrees of strength.
During a 30-day period, the price can move even beyond 50 per cent based on the relevant news and announcements which may strengthen or weaken the currencies.
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 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).
- At the end of 2015 Ethereum’s price was slightly below $1 (£0.8), 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 over $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 USD?
USD is the official currency of the United States of America, which has the strongest economy in the world. In addition, the US dollar also represents the unofficial global currency and it is among the most desired reserve currencies. Thanks to its characteristics, the USD is the most popular and actively traded currency enjoying a high level of trading volume and volatility.
Which factors affect US dollar value?
With its characteristics and widespread usage, the US dollar value is driven by numerous factors. For instance, changes in inflation rate and interest rate in the domestic economy will definitely affect the USD exchange rate. The supply and demand for USD and USD-related transactions might also be the cause of fluctuations in the USD value and accordingly, the Ethereum to USD exchange rate.
Traders should also monitor US export and import levels as a trade deficit or surplus is of crucial importance. The sentiment of foreign investors is another important aspect which is vital when analysing the Ethereum to Dollar price.
Every trader who plans to open trades with the ETH/USD or any other currency pair related to the USD must definitely bookmark the Economic Calendar. It publishes in a pre-defined schedule the most important economic data and reports that affect the US dollar. Also, the political situation in the United States as well as the political relationship of the US with other countries can dramatically impact the value of the US dollar.
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