If you were thinking of investing in Ethereum in 2023, you could be choosing a good time to do so since the coin is looking like it could have a great year. You cannot invest in Ethereum without knowing what it is first, however. Ethereum is very different from coins like Bitcoin, and you have to understand what makes it different from them before you start. These differences will allow you to understand what affects its price movement, and if this is the kind of project you’d like to invest in. Let’s take a look at some of the things you should know before investing in Ethereum.
The Difference Between Bitcoin and Ethereum
The first thing you have to know is that Ethereum is a utility coin, meaning that it allows users to perform certain actions on the network. In this case, the network is used to host a variety of decentralized applications, or dApps. These range from games like CryptoKitties to more serious projects like payment processors. It can also be used to launch other coins, and a lot of the most popular altcoins are hosted on Ethereum’s blockchain.
Bitcoin, on the other hand, was meant to be purely transactional. And it is not as connected with other projects as Ethereum. So you need to pay attention to projects that use the Ethereum network and how successful they are as their success is bound to affect the price of ETH.
Most NFTs, for instance, are hosted on the Ethereum blockchain, which means anything that happens with the NFT world will affect ETH in some way. So you need to stay on top of the recent developments on this side particularly.
Ethereum has a Strong and Visible Direction
Another thing you should know about Ethereum is that it has an actual board of directors that can directly influence the direction the coin will be going in, unlike Bitcoin. The board of directors can intervene at any time to restrict or expand the supply of coins, so you need to stay abreast of the most recent decisions and how they’re received by the community.
Look at the Price Action
You must study the historical price action of any coin before you invest in it, and Ethereum is no exception. If you look up the current Ethereum price USD at okx.com, for instance, you’ll notice that Ethereum is at its lowest it has been in a long time coming off a not-so-good year.
This might seem like bad news to some people, but there are signs of support right now, and if we look at the price history for the coin, everything seems to point to it rising again. There is great news for Ethereum on the way too, and that crypto could have a great year based on both price history and global market conditions.
These are all things that will help you understand Ethereum better and make better decisions when investing in it. The more you know about Ethereum, the more you’ll be able to understand what could affect its price, so keep learning about the coin and try to go beyond the surface.