To start with, I would like to note that I am not a professional trader, so I am not able to make any forecasts. Also, due to my business activity, I cannot give any recommendations about which cryptocurrency to buy or sell. My focus is making the cryptocurrency ecosystem friendlier to the average users, in particular, by developing CEX.IO. Thus, please do not consider my comments as recommendations but rather as my thoughts.
While the crypto is all over the news and the price of Bitcoin had risen to the top, one of the most frequent questions I am always being asked is whether it is worth buying Ethereum if I cannot buy Bitcoin?
The first thing to consider is that any cryptocurrency is much more volatile and risky than stocks, bonds, or any typical assets investors are used to. They can go up and down for 25% in a matter of hours or even crash, which is very common now.
However, if you do not want to stand aside from this really massive mainstream trend that attracted so many people, some individuals may view EHT as an option. With all this extreme volatility of the cryptocurrency market, ETH market cap has grown almost 600 times since the ICO in August 2015.
So, Bitcoin vs Ethereum?. Bitcoin is, first and foremost, a currency that was created as an alternative to the fiat, and Bitcoin blockchain was designed to track digital cash. Ethereum mainly focuses on technology and has its own cryptocurrency called Ether. Apart from simply being a token, the major difference it provides is a smart contract, which is a digital code that you can implement online to execute certain tasks.
With Ethereum, people can build decentralized apps that are gaining more popularity within various businesses. We see a steadily growing price of Ether accompanied by the optimism about it from such giants as Citibank or J.P. Morgan.
Besides, the technology can offer speedy transactions, 15 seconds to almost 10 minutes for Bitcoin block. A month ago it even overtook Bitcoin by a number of transactions. Today, ETH reached almost 400 thousand of transactions in comparison to 300 thousand by Bitcoin.
Ethereum ecosystem is no stranger to hard forks. After the Byzantium was deployed successfully, we are awaiting the Constantinople. The team is inclined to fewer changes, so the forks run rather calmly and without the extreme price changes.
Fred Wilson, the partner at Union Square, predicted that Ether’s market cap would overcome the one of BTC by the end of 2017. Even though the statement received a fair amount of critics, we can see the coin showing stable growth.
As we see the situation with Parity that recently caused a lot of stress, there are still areas for development and lessons to be learned.
Rising competition between other tokens and weak reputation of ICOs generally can dump the price of Ethereum on digital exchanges.
While the ETH price increases, Ethereum apps grow more expensive as long as users need to pay for the ‘gas,’ which is the unit of computation power used in Ethereum. With its growing cost, the use of Ethereum platform may become more expensive. However, some expect that miners will lower gas prices eventually.
And, last but not least, is the factor of governance, which is a long-term issue for every cryptocurrency.
Today, numerous online exchanges offer the opportunities to purchase ETH. Many online platforms will require from the users to register on the website, verify the identity, and add the preferred payment method. It may be a credit or a debit card, most popular are Visa and Mastercard, or a wire bank transfer. Among such services – CEX.IO – provides the users with two ways for buying Ether.
With this whole hype and volatility, it's challenging to make any predictions even about the nearest future. However, Ethereum has actual value, which makes it an economic user-case as far as people are interested in using its ecosystem.
The speculation is a huge factor now, so we can see the parabolic increases and downturns. Despite the whole volatility, a lot of institutional money is coming from funds and investors that make the reputation of ETH stronger. Personally, I expect price correction in the nearest six months and more people coming to the market to trade ETH or hold it for a long run.