Please note that Crypto Trading is only available to Professional Traders
Ethereum Trading for Pros
Ethereum is a groundbreaking, open-source platform to data friendly services, and digital money. It doesn’t matter where you are based, or what your background is. This community-driven technology allows for smart contracts, and decentralised apps (dapps) for use 24/7.
With Ethereum’s blockchain, users can enjoy private Internet access, on a P2P platform where you can send and receive money, and create agreements directly with each party – no intermediaries necessary. Given that Ethereum is decentralised, it is not beholden to governments, central banks, or other regulatory authorities. Anyone, anywhere can seamlessly transact on the Ethereum blockchain without let or hindrance.
The commercial guarantee provided by the Ethereum blockchain ensures that everyone acts on a level playing field. Funds only change hands when contractual obligations have been satisfied. Owing to the widespread compatibility of Ethereum’s blockchain-based protocols with SMEs across-the-board, it is easier for companies to build on their collective successes.
Among the many benefits of Ethereum are transparency, low costs, and widespread applications. This innovative blockchain technology expands on what Bitcoin created, with major upgrades. No banks are needed in both cases, but with Ethereum the blockchain is programmable, allowing for multi-asset functionality, financial services, gaming, et al.
What is Ethereum (ETH) & How Does it Work?
The Ethereum ecosystem was created by Vitalik Buterin in 2013, and was crowdfunded a year later. By 2015 it was fully operational for public use. By November 2020, the top 10 Ethereum dapps hit 1 million users – a significant milestone. At its core, Ethereum is a platform for decentralised apps. By applying blockchain technology on a mass scale, the self-styled ‘World Computer’ serves as its own app store for developers.
The difference is, it is fully decentralised. The built-in tokens used for the smart contracts are known as Ether, a.k.a the Ethereum (ETH) cryptocurrency. Miners engage in complex computations, solving problems to secure the blockchain. All purchases of Ethereum (ETH) via wallets or through the platform are effectively investments in the ecosystem. Funds move through the open source platform, which is expected to yield the greatest applications yet.
Many experts in the crypto-sphere believe that Ethereum is accelerating the decentralisation of the global economy. It has wide-ranging usage across multiple industries, and it is already backed by Fortune 500 companies. In 2016, several of these companies had a powwow to further develop Ethereum’s networking technology. With the Ethereum blockchain, none of the coding is controlled by a central system, or an individual – it is fully decentralised.
The original version of the Ethereum blockchain, Ethereum Classic ultimately gave rise to the newer version. While the newer version adopted the name Ethereum, the blockchains are incompatible and updates on one blockchain have no impact on the other. All of these changes allow for the creation of a brand-new cryptocurrency with a unique name, ledger, price, and market capitalisation. Think of Ethereum as an enhancement of Bitcoin’s blockchain technology, featuring a novel approach, and a powerful new platform.
The price of Ethereum (ETH) is extremely volatile, allowing for trading opportunities to the upside, or the downside. At the time of writing [January 2021], the price of ETH was $1,283.38 per coin, with an all-time high of $1,476.12. Whatever the spot price of ETH, that’s precisely the real-time trade value of this cryptocurrency with Ethereum CFD trades against the USD at AvaTrade UK.
What are the advantages of Trading Ethereum with AvaTrade UK?
When you trade ETH with AvaTrade UK you can find advantages that you wouldn’t necessarily find when working with an exchange. These include:
- Short selling – With most investment types like stocks you would BUY low and Sell high for a profit. With short selling you are shorting the asset, which means SELL high and BUY low. This allows a trader to trade in bearish markets (falling) too. In other words, short selling is driven by the belief that a price index will decline, allowing it to be bought back at the lower price to profit.
- Lower capital requirement – Rather than buying the ETH itself, you are speculating on its price movement. This means that you do not need such a large sum to gain exposure to the asset. In fact, with AvaTrade UK you can trade ETH and other cryptocurrencies with just $100 to start.
- Leveraged trading – This is a major advantage commonly used by professional traders. It allows you to open a much larger position than your capital would dictate. Leverage can magnify your potential profits, and at the same time, can magnify your losses.
- Auto trading – This refers to using software called Expert Advisors that creates automatic orders and submits them to a market exchange. These systems can perform repetitive tasks at high speed. It can also come in forms of social trading via AvaSocial and copying the positions of experienced traders with a proven success record, like Zulutrade does.
- Regulation – Most exchanges are not regulated, which means no protection for you as a user. AvaTrade UK gives you the knowledge that you are working with a transparent, secure brokerage firm when you trade Cryptos and other CFDs.
Trading Ethereum with AvaTrade UK doesn’t require a wallet, since the trades are performed though our SSL secured online trading platform, this is a big advantage in avoiding potential hackers and theft. From the same platform you can trade Forex pairs and other assets as well.
Why Trade Crypto CFDs With AvaTrade UK?
- Uncompromised Safety – With seven regulatory authorities and segregated accounts, your money is protected at all times.
- Many Cryptos to Choose From – Trade on the wide variety of cryptos available on our trading platforms.
- No Hidden Fees – We offer zero commissions and no bank fees on transactions!
- Crypto Never Goes to Sleep – AvaTrade UK is one of the few brokers offering around-the-clock service and support in 15 languages.
- Generous Leverage – Increase your initial capital with generous leverage and get far more exposure to trade using your account balance. Up to 2:1 (for EU residents) 25:1 (for non-EU residents).
- Limit Your Risk – You can preset profit and loss levels by using stop losses or take profit limits when you trade. Determine the maximum amount you are prepared to risk when speculating on the price, or set a price at which you want to take profits. Future orders like Buy Stops and Buy Limits are also available.
- Trade Cryptos Against Fiat Currencies – Unlike many exchanges out there, who are restricting their clients to trade only Crypto to Crypto, our clients can trade Cryptos against Fiat currencies (USD, EUR, JPY etc.), as well.
What are the Advantages of Ethereum Technology?
- The app can never be turned off
- Applications are protected against fraud and hackers due to the secured cryptography
- It cannot be censored, since the apps are based on the principle of a group decision- making process
- A third party cannot make changes to any of the data
- Ethereum has more applications than Bitcoin does
Mist browser is the interface and digital wallet for Ethereum users. With it people can store, trade, and manage their contracts. Mist and MetaMask (another browser) help make blockchain-based applications easily accessible.
Ethereum is moving forward with its user-friendly platform, which enables people to make use of the blockchain technology.
Ethereum Price and Market Factors
Ethereum and ETH is considered much more than just a digital asset. Its value lies in the powerful blockchain programming language called Solidity. Its goal is to become something totally different from all other coins. With its increased application, there is a rise in demand by developers for “Ether”.
The price of Ethereum has soared and has been reaching all-time highs. Bitcoin has also been surging, and when that happens it does boost investors desire for other cryptocurrencies where gains can be acquired. Since Ethereum and Bitcoin are not competing, both can benefit when one rises.
Random events can happen to affect Ether’s price rise or fall, such as the flash crash of Ethereum’s value overall, which took place in June 2017. The Ethereum news and crash happened within a very short span of time, literally seconds after a major sell off prompted other traders to liquidate their digital currency. However, in that situation within seconds computer algorithms were buying again and the price was recovering.
As you can see the volatility of the digital currencies alters prices within second. The general public and investors all had the same questions when this happened as to how the rebound could have taken place so quickly. Any strong value increase can eventually lead to a price correction. As with the cryptocurrency trading market or any market in general, the momentum can slow down at any point. A more recently introduced altcoin named EOS was named as the biggest potential competitor for Ethereum.
Thirty big banks, tech giants, and other organizations including J.P. Morgan Chase, Microsoft, and Intel are uniting to build business-ready versions of the software behind Ethereum. Its ability to record and execute transactions without the need of a middleman is making this blockchain technology more popular amongst businesses.
There has always been talk about ‘flippening’ in crypto circles. This is a hypothetical moment when the market capitalisation of Ethereum edges past that of Bitcoin. But it is not just talk when ‘flippening’ was suggested by Goldman Sachs. In a note to its clients in July 2021, the investment bank touted Ethereum as the coin that will eventually win the cryptocurrency race. Goldman Sachs highlighted the several advantages Ethereum has over Bitcoin, such as speed and security, as well as the blockchain network that enables decentralised finance (DeFi) and smart contracts.
At the time Goldman sent the note, the market capitalisation of Bitcoin was about $600 billion, while that of Ethereum was around $250 billion (less than half that of Bitcoin). Ethereum has been a solid number two for many years, but it is easy to see why Goldman Sachs backs it for the crown. Most dApps (decentralised applications) run on the Ethereum blockchain platform, but the last few months have seen its potential soar even further. DeFi has offered an alternative to the current centralised financial system, creating a global, open, and transparent solution that will allow anyone to borrow, save, invest, trade, or perform any financial activity within the blockchain. DeFi is already a multi-billion industry, and most projects are hosted on the Ethereum network. While DeFi is gathering pace, NFTs have literally exploded. NFTs are tokens that digitise all manner of assets on the blockchain. There is already an NFT that has been sold for $69 million, and the industry is just getting started. Ethereum has all the credentials to make ‘flippening’ a self-fulfilling prophecy. And the Goldman Sachs thumbs-up can only affirm the belief of investors and encourage Ethereum trading.
Ethereum Trading Conditions at AvaTrade UK
- Competitive Spreads
- Minimum Trade Size 1
- Up to 2:1 (for EU residents) 25:1 (for non-EU residents).
- Trading Hours 24/7
- MT4 Symbol ETHUSD
When trading with AvaTrade UK you are trading on the price changes of the digital coin, and not physically purchasing it.
The maximum accumulated position size for Ethereum is $400,000 notional value, details in our Conditions and Charges page.
Please note that Crypto Trading is only available to Professional Traders
Ethereum Trading FAQ
- What are some of the challenges faced by the Ethereum network?
Ethereum is second only to Bitcoin as the most capitalised, and in-demand digital currency. However, challenges remain. Between 2% – 5% of Ethereum transactions on decentralised exchanges fail, due to insufficient gas prices, or slippage. Other issues include the network’s inability to scale effectively to meet demand. The scalability challenge is largely due to the innate properties of ETH mining. With 7-15 TPS (transactions per second) compared to Visa at 45,000 TPS, it’s clear that much work needs to be done. Possible solutions include state channel, sharpening, and plasma, but in-depth study of these solutions is needed.
- How will EIP-1559 impact demand for Ethereum?
Ethereum’s upgrade to Ethereum 2.0, a.k.a. EIP-1559 represents an overhaul of the transaction-fee system for the digital currency. The fee is no longer paid to Ethereum miners, but to the network itself. The new system may result in a decreased supply of Ethereum. Vitalik Buterin co-founder of Ethereum joked that if there is decreasing supply, does that make Ethereum ultrasound money? The new network upgrade recently approved by developers could decrease Ethereum supply and prop up its price. With demand at high levels, and supply at lower levels, prices may rise. EIP-1559 (Ethereum Improvement Proposal 1559) was packaged with the London hard fork.
- Should I use leverage with Ethereum trading?
At current price levels, Ethereum is largely out of reach for many retail traders. As a South African trader of Ethereum CFDs, costs can quickly spiral. Fortunately, leveraged trades of up to 20:1 are possible for certain classifications of traders. Provided you conduct the requisite research, stick to a trading strategy, and carefully manage your investment funds, you can benefit from leverage. The volatility of crypto markets should always be borne in mind when trading derivatives. Since the CFD price is derived from the price of Ethereum, leverage can amplify your gains, but it can also multiply your losses.