Ethereum vs. EUR – Cryptocurrencies

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Cryptocurrency has grown quite popular in recent times and allowed people to fulfill a transaction by not only using a digital platform but also do it without the presence of third party such as banks. Cryptocurrency such as Bitcoin, Ethereum, Ripple, and Litecoin work on a blockchain technology that refers to a global database operated through computers called ‘nodes’ that are interconnected. The purpose of the nodes is to feed the information in the database and verify using secure code.

The biggest advantage of digital currencies is its decentralization, which means no intervention from intermediary, such as banks. A person does not need to strictly follow the rules or pay any service fee. Bitcoin was the first digital currency launched in 2009, the concept of blockchain technology became popular, and other cryptocurrencies emerged.

Ethereum (ETH) is an open-source, decentralized digital currency that is based on a blockchain platform. Ethereum was proposed as a white paper by Vitalik Buterin in 2013 and went live in July 2015 with 72 million coins. Ethereum differs from Bitcoin as it offers smart contracts and Distributed Applications (Dapps), which allows fast and secure transactions without any downtime and interference from a third party such as banks or any other financial institution.

Ethereum was the first digital currency that allowed users and developers to use the Ethereum blockchain platform to use smart contracts to develop their own decentralized applications. Ether is the native currency of the Ethereum blockchain platform and highly liquid. The transactions in the Ethereum network are faster and take seconds while it takes minutes for a transaction to complete in Bitcoin.

Ethereum has the second biggest market capitalization in the cryptocurrency market after Bitcoin (BTC). The Initial Coin Offerings (ICO) are mostly done on the Ethereum blockchain. The Enterprise Ethereum Alliance (EEA) usually monitors the performance of Ethereum and does key developments to enhance future use of Ethereum.

What is the ETH/EUR currency pair?

The Ethereum (ETH) pairing with Euro (EUR) is given by ‘ETH/EUR’ where ETH is the base currency, while EUR is the quote currency. The ETH/EUR pairing indicates a combination of ETH, which is the second most popular cryptocurrency, and Euro, which is one the second most influential fiat currency in the world. Euro is often traded with other prominent currencies such as USD and GBP. Traders and investors residing in Europe may feel more comfortable trading ETH with EUR than any other Forex currency.

The ETH/EUR pair attracts traders and investors due to its high level of volatility and liquidity. The short term traders, in particular, can speculate the sudden price movements and have the possibility to potentially profit.. In an hourly time frame, it is seen that ETH/EUR pair moves 5%, and after certain events and financial announcements, the pair may even move 10%. The daily price changes in ETH/EUR may also touch 15% and give the opportunity for traders to potentially profit if the market goes into their direction.

The ETH/EUR indicates the relationship of Ethereum with the US Dollar. The ETH/EUR pair shows how many Euros are needed to buy one Ether. The current exchange rate is 1 ETH = €326.70.

History of ETH/EUR Pair

Bitcoin rose to massive fame after its launch in 2009 and set the trend for other aspiring developers and programmers to further work on the blockchain technology. Vitalik Buterin put forward Ethereum in 2013, who was a Russian-Canadian programmer and developer. The Ethereum project required massive capital, and investment came through crowdfunding, where almost $18 million were raised.

Initially, Ethereum was valued at $2.8 and attained massive acceptance in the digital currency market. Decentralized Autonomous Organization (DAO) was formed in 2016 as a venture capital fund to further improve the functions of Ethereum. Almost $150 million were raised, but $50 million got stolen or hacked, and the community of developers decided to perform a split or ‘Hard Fork’ to retrieve the lost $50 million of investors. On July 20, 2016, a split occurred, and two divisions were formed. The older Ethereum blockchain code was renamed as ‘Ethereum Classic, (ETC)’ while, the newer version was named ‘Ethereum.’

At the end of 2015, the value of Ethereum was below £0.8 ($1), but in the middle of January 2018, Ethereum touched an all-time high value of £1.132 ($1,432). Most of the cryptocurrencies have a maximum cap but not Ethereum, and users get a reward when a computational task is completed, and a transaction is verified. The market capitalization of ETH/EUR is €34 billion, and the circulating supply is 112.65 million.

Euro has a dominant place in the Forex market, not only in Europe but worldwide. Euro is the second most traded currency globally after the US Dollar and accounts for almost 30% of all Forex transactions. Euro is the approved currency of 19 out of 28 countries that are member states of the European Union (EU). Euro was introduced in 1999, but notes and coins were made public in 2002.

How to analyze the ETH/EUR Price Chart

If we examine the price chart of the ETH/EUR pair, we see that the pair traded in the range of €175.00 to €300.00 from the second week of February 2020 to the first week of March 2020. The value of ETH/EUR fell to the lowest value of €97.45 on March 16, 2020, but started to see an uptrend. In the last few months, the value of ETH/EUR is trading from €200.00 to €400.00 from the first week of June 2020 to the third week of September 2020. The highest value of ETH/EUR was €401.39 on September 1, 2020.

Currently, ETH/EUR pair trades on €326.70. The Bid price is 326.78, while the Ask price is 328.72.

If you speculate that the price of ETH will rise against the EUR, then you will go long or Buy, and likewise, if you guess the price of ETH will fall against the EUR, then you will go short or Sell.

What causes price change in the ETH/EUR pair?

Ethereum is a cryptocurrency that means its value is not tied to micro and macroeconomic factors like the Forex currencies. The major factors that impact the value of Ethereum are its adoption, regulations, and market sentiment. The value of Ethereum is influenced by

• The value of other prominent digital currencies such as Bitcoin, Ripple, and Litecoin
• The policies and guidelines of the EU regarding the use of Ethereum for transactional and investment purposes
• The acceptance of Ethereum by financial institutions and governments
• The increase in smart contracts and a list of new users

The value of the Euro is directly influenced by the monetary policy of the European Central Bank (ECB), where decisions are taken regarding interest rates. Other macroeconomic factors that affect Euro are Import and Export data, inflation, employment rate, budget deficit, the national debt of some Eurozone countries, and even domestic and international political events.

As ETH is more volatile as compared to the EUR, the traders always look to accurately speculate the price movements of the ETH/EUR based on the volatility of ETH. The ETH/EUR pair can be used to diversify an investment portfolio and hedge against inflation.

The information above is for education purposes only and cannot be considered as investment advice. Past performance is not reliable indicator of future results.