Global interest in cryptocurrency has increased significantly over the past couple of years, sparking heated debates among regulators, central banks, and institutional investors. Although Mexico has developed its own legislation, it’s still open to influences from other jurisdictions that have enacted cryptocurrency rules. The progress of regulation has been notable but insufficient to cover all aspects of the growing industry. Despite the hesitations, the population has embraced cryptocurrencies like Ethereum (ETH), and there are many reputable exchanges to choose from. Ethereum can support individuals and businesses alike by ensuring enhanced interconnectivity.
If you’ve just started paying attention to the ETH price and wondering whether to invest in 2023, here’s what to know before buying.
- Don’t Give in To the Fear of Missing Out
The fear of missing out (FOMO) is quite common today; it involves a deep sense of envy and affects self-esteem. There’s the perception of missing out, followed by compulsive behavior, such as investing in cryptocurrency, which triggers anxiety. You become unsatisfied with your life simply because you see what others are doing – in other words, you’re disconnected from what truly matters in life. FOMO in the crypto world happens when you make an irrational decision to invest in or trade Ethereum based on some piece of information without verifying the source. Research can help you stay away from any random decisions.
There’s no denying the fact that ETH has excellent merit as a long-term investment. As the crypto market continues to expand, more applications will be built on the Ethereum blockchain, so there will be more demand for the ETH token. Arguably the most widely used feature of the Ethereum network is its smart contract capability. Smart contracts are self-executing agreements based on an if-then logic that eliminates intermediaries in transactions, with use cases in digital advertising, healthcare communications, and supply chain management, to name a few. Information is a crucial driver, especially for profiting from cryptocurrency, so free yourself from the grip of FOMO.
- You Can Buy a Fraction Of ETH
There’s no minimum investment amount, but many experts agree it’s best to invest somewhere between 5% and 30% of your capital. It’s crucial to determine your risk tolerance before buying Ethereum because while gains can be significant, so can the losses. As a rule, the longer your timeline, the more risk you can take since you have more time to recover if there’s a major drop in the crypto market. In case you didn’t already know, you can just acquire a small piece of ETH – a Wei. One Ethereum equals 1,000,000,000,000,000,000 Wei. If you transact on the Ethereum network in any way, you’ll need to pay for gas fees, which requires Wei. Anyway, build up your confidence by purchasing a small amount of crypto to get used to the process.
- Not All Wallets Can Hold ETH
An advanced wallet allows you to store Ethereum, ERC-20 tokens, and other digital assets to explore decentralized applications. A wallet is basically a computer program that lets you interact with your Ethereum account; it doesn’t have custody of your funds because ETH isn’t tangible. The public and private keys enable you to perform transactions and demonstrate ownership of your holdings. Select a type of Ethereum wallet that works for you from the following options:
- Software wallet. It’s accessed via a website or installed as a mobile app. The wallet stores the public and private keys in data files, where you can easily access them.
- Hardware wallet. The public and private keys are stored in an external, physical device – USB/Bluetooth device. You connect the wallet to a computer or smartphone.
- Paper wallet. As the name suggests, it’s a piece of paper with your public and private keys. Use a brand-new computer to create your keys.
If you don’t know what to do, the best course of action would be to look at a crypto exchange. Most crypto exchanges store the funds in cold hardware wallets, meaning they’re held securely offline. You can make transactions for free within the ecosystem.
- Opt For a Balanced Portfolio
Any person can purchase Ethereum from popular crypto exchanges. If you’re just getting started, start small and invest only the money you can afford to lose because cryptocurrency prices fluctuate widely. Instead of putting all your money in ETH, you should better spread your investments across different types of digital assets to put yourself in a better position to succeed. You don’t have the support of an insurance company in case something goes wrong. Allocate some of your portfolio to stablecoins, the value of which is pegged to 1:1 with real-world assets. DAI, for instance, offers opportunities that aren’t available via traditional financial institutions and is a good fit for those seeking fast growth of their assets.
- The Blockchain Future Is Around the Corner
Finally, yet importantly, do everything within your means to prepare for the future of blockchain. Web 3.0 platforms will only continue to grow, transitioning projects away from speculation and more towards utility; cryptocurrencies like Ethereum are the building blocks of web 3.0. Tokens like ETH will be used to send money directly in the browser, and no third parties are needed. As far as decentralized autonomous organizations (DAOs) are concerned, each month will produce new ones, so there will most likely be an explosion of infrastructure growth. Deployment on the Ethereum network activates a DAO – by removing network or infrastructure owners, it’s impossible to control how the organization is run.
In conclusion, chances are that other cryptocurrencies will be issued in 2023 and beyond, so be prepared by registering for accounts on different crypto exchanges. Maybe the digital asset you’d like to buy won’t be listed on the exchange of your choice. Regardless of what happens, blockchain technology will be a key player in the future of the digital economy, so make it part of your strategy (it’s incredibly secure). Knowledge is power, so the more you learn, the better you’ll be prepared for a future graced with its presence.