Ethereum Investments: A Brief Introduction to the Best Strategies

Crypto investing has become quite popular since an increasing number of coins have been released in the market. Although Bitcoin has remained the staple regarding the best investments, other ecosystems like Ethereum, Cardano and Polygon have added special features and technologies to the world of crypto investing. You can check out Ethereum for more insight into the coin’s popularity, but what makes it even more popular include smart contracts, DAOs and DApps.

Investing in Ethereum is not that challenging, but you need to decide if it’s a good investment for your portfolio. Known for its high volatility and price spikes, Ethereum can be risky for beginners who don’t have a well-developed portfolio that can minimize the dangers of losing your financials.

Let’s see how you can invest in Ethereum and what are some essential strategies for successful transactions.

What to know before investing in Ethereum?

Ethereum’s prices are highly volatile and may be prone to losing substantial financial resources. This aspect is not something new regarding cryptocurrencies, as most of them might present a certain amount of risk to people’s portfolios. However, Ethereum is based on a solid blockchain and ecosystem that leverages plenty of other benefits, contributing to the coin leading the market. 

For certain, Ethereum runs unstoppable applications as anyone worldwide can create and use them for profit. The freedom resulting from this movement has opened many doors for the blockchain to be used in different industries. Amazon, Microsoft, Epic Games and Nasdaq are only a few corporations masking Ethereum transactions and allowing customers to pay with this cryptocurrency.

Finally, Ethereum is extendedly developing its features. The last upgrade has switched from the old PoW to PoS consensus mechanism, making Ethereum one of the most sustainable cryptocurrencies since this feature reduced its energy consumption by over 99%.

The reasons why you should invest in Ethereum are diverse, but cryptocurrency widely develops and is included in an increasing number of transactional services. Similar to Bitcoin, Ethereum paves the way toward a digital future in which customers have the liberty and reassurance to use their financials as they please, without being monitored or limited.

The one reason why it would be best to avoid Ethereum

In most cases, the Ethereum blockchain has more utility than the coin, but if you’re creating or using technologies from the Ethereum blockchain, transactions would be more profitable with Ether. However, Ethereum is not made for everyone because of its volatility. Ethereum can lose and gain back to value in a matter of days, leaving investors without considerable assets if they’re not fast enough to withdraw their investments or be wary of their actions. Most investors are tempted to sell all ETH when the price declines, which is not always the best choice. Regardless, investors should be prepared with a varied portfolio with numerous kinds of assets to face the downfall of Ethereum.

3 best strategies for investing in Ethereum

If you want to invest in Ethereum, buying ETH from official exchanges that provide safety and security to your information is best. It’s also necessary to have a digital wallet to store your coins. The best ones are cold wallets because they are less prone to cyberattacks because they’re not connected to the internet.

The dollar-cost averaging strategy

The first and most popular way to invest in Ethereum. It implies that you buy coins in smaller portions over time to minimize risk. Therefore, instead of buying a few coins in a sitting, you’d better purchase smaller quantities of ETH every month or week over a longer time. DCA is best for protecting your investments from short-term market volatility, and high-conviction investors are the most known to leverage this method.


Trading is another way of investing in ETH. Since Ethereum has one of the most versatile markets, and the exchanges where you can buy it from have a high number of trading pairs, Ethereum is best for speculative trading. This method is more complex than DCA and requires more knowledge of blockchain technology and trading, as well as higher risk tolerance.

In trading, there are two types of investors. Day traders use technical analysis to make a few trades per day, while swing traders open trading positions for a few days or weeks, depending on the asset’s status. Trading also has three crucial elements, the entry point, exit point and stop-loss, which you need to understand and use to your own advantage. Regardless, crypto trading is riskier than DCA or traditional investing, so you must be prepared for more significant losses.

The final Ethereum investing strategy is HODL (hold on for dear life)

The term comes from a simple misspelling on the internet but has become an important strategy over time. It implies that investors only need to hold their coins instead of selling them during challenging market times. What is the best time to HODL? Anytime, anywhere, and always. The strategy encourages investors that if they hold their coins despite the market crashes or surges, they’ll one day leverage more benefits when cryptocurrencies are accepted worldwide, and blockchain will be a technology included in all industries.

HODLING is also an excellent strategy for those with FOMO (fear of missing out) on certain market occurrences, like when the price of ETH goes down so dramatically that you’d want to sell everything. Of course, buyers will get the coins at a lower price, but if you have your portfolio in place after the market is back on its feet, you’ll be leveraging a few more other coins.

Bottom line

Investing in any cryptocurrency is like a double-edged sword. Despite the possible high income, the risks are also considerable, especially if you’ve just begun to invest. So, before trying Ethereum, it would be best to diversify your portfolio and be in control of your assets. Otherwise, the high volatility of Ethereum will take all your finances, and you’ll be left with nothing but a few coins. Therefore, approach Ethereum with caution.

Leave a Comment