The cryptocurrency market is quite young and is at the stage of development. This is bad, as it can lead to loss of capital. But this is good, since the high volatility of assets allows you to earn a large amount in a short time. To protect yourself from risks, you need to know how to invest in Ethereum.

Ways to earn money

There are several ways to profit from Ethereum. Let’s consider them below.

  1. Mining. Mining coins with the help of powerful computers. That is, you need to invest money in the purchase of a mining farm and administer its work. Profitability is difficult to calculate due to different energy costs, as well as related costs.
  2. Staking. Currently only available in ETH2. It is necessary to transfer 32 ETH to this network, as well as block them before the transition of the entire blockchain to this protocol. Profitability depends on the number of connected validators. But you can resort to joint staking if the user does not have 32 ethers on the wallet.
  3. Trading. It involves the constant buying and selling of cryptocurrencies to earn on the difference in price. Requires serious knowledge in the field of technical analysis.
  4. Long term investment. A simple and calm way to invest. The user purchases coins and keeps them for a long time on the wallet, waiting for the asset rate to increase.

Investment Tips

Cryptocurrency investing seems risky only if you invest and manage your portfolio without the necessary knowledge. But even a few simple rules make it possible to diversify and mitigate risks.

Investment algorithm

  1. Choice of strategy. You can invest in Ethereum for a short or long term. In the first case, you need to constantly monitor the portfolio, as well as rebalance it in time or get rid of assets. A hot wallet or exchange account will do. If you plan to store crypto for a long time and expect the price to rise, a cold wallet will do. It provides the most reliable storage of financial assets.
  2. Wallet creation. The user can create a wallet on one of the cryptocurrency exchanges, use the online service for storing ether and ERC-20 tokens, and also download an application to a computer or phone. Ethereum Wallet programs or the Metamask multi-currency wallet are popular for storing ether.
  3. Acquisition of an asset. When buying, you need to pay attention to the exchange rate and platform commission. The most profitable way is to buy ether from a seller on a decentralized resource. The fastest option is an exchanger or a centralized platform.

Investing is always associated with risks. In the case of cryptocurrencies, risks increase due to the volatility of assets. Therefore, before investing in Ethereum, you must independently weigh the pros and cons of such a decision.