Trading ETH to CHF
The characteristics of both currencies makes Ethereum to CHF one of the crypto world’s more popular trading pair. Namely, traders can profit from the volatility of cryptocurrencies, while limiting their risk with the stability of CHF. The Swiss franc is considered a safe-haven in times of economic uncertainty.
The ETH to CHF pair has a sufficient level of volatility. Moreover, the daily traded volume of the currencies ensures that trading positions can be executed swiftly.
If we compare Ethereum to Swiss Franc to other crypto/fiat currency pairs over an extended period of time, there are some noticeable differences. Firstly it does not experience such severe fluctuations as other pairs do, with major retracements and bounces relatively uncommon.
Of course, ETH/CHF still can offer high rewards over a longer period, but it happens at a more stable pace. For instance, the value of the ETH/CHF may fluctuate up to 20 per cent through the month while moving in a trendy manner or range-bound movement. While this may represent a stable increase in the value over a prolonged period, at a daily rate, this pair may fluctuate only a few per cent.
What is Ethereum?
Ethereum was introduced in 2015 by a Russian-Canadian programmer Vitaly ‘Vitalik’ Buterin. It is an open-source platform that utilises blockchain technology to create and execute distributed applications (DApps). Users can create or join so-called ‘smart contracts’ directly without third parties, limiting the possibility for fraud.
Ethereum is commonly used as a name of the associated cryptocurrency but in fact, Ethereum is the system or network while Ether or ETH is the native currency. Users need to have Ether when they want to execute a certain transaction through the system.
Some interesting facts about the ETH
- The Ethereum project was successfully crowdfunded in the middle of 2014 when it raised more than $18 million (£14 million).
- At the end of 2015 Ethereum’s price was slightly below $1 (£0.8), by mid-January 2018, it reached its current peak of $1,432 (£1,132).
- Unlike some other cryptocurrencies, there is no maximum supply cap for Ether.
- Ether can be created through ‘mining’ – users receive a reward when they complete a mathematical task and verify transactions.
- The Ethereum Alliance (EEA) is an organisation developed to enhance the future usability of Ethereum.
- Most of the ICO (Initial Coin Offerings) are hosted on the Ethereum blockchain.
What affects Ethereum’s value?
The factors can be divided into two groups – the ETH related and those affecting the general cryptocurrency market.
Ethereum specific factors are:
- The demand for ETH, which is not driven solely by trading activities.
- The Acceptance of the Ethereum system by more established financial institutions.
- The increased adoption of smart contracts hosted on the Ethereum platform and the inflow of new users will increase the demand for ETH.
- The degree of mining profitability.
- Improvements in the Ethereum system in the future.
General factors related to the crypto world:
- Changes in regulatory laws and regulations regarding the legality and usage of cryptocurrencies.
- Potential market manipulation by large participants or so-called crypto whales.
- Speculative trading – on June 22, 2017, a multi-million dollar market sell order crashed the ETH price from above $300 (£240) down to $0.10 (£0.08) in a couple of seconds. Although, the price did bounce back within minutes. One trader reportedly made over $1 million, thanks to an automatic buy order set at $0.10 through which he purchased over 3,000 ETH.
- The number of crypto channels where ETH is available for trading also affect its value.
- The number and strength of ETH competitors.
What is the Swiss Franc (CHF)?
The Swiss Franc or CHF is the national currency of Switzerland and was officially introduced in 1850. Among other things, Switzerland is known for its neutrality, the secrecy of its banking sector and the stable monetary policy implemented by the Swiss National Bank. These have provided great conditions to make CHF a global safe-haven currency. In times of economic and political disturbances, market participants rush to CHF along with the Japanese Yen and gold.
What affects CHF’s value?
CHF is among the top 10 most traded currencies in the world. Since the Swiss banking sector is viewed as a highly secure place with a high level of privacy for storing financial assets, the demand for Swiss banking services is yet another important factor related to CHF.
Like all national fiat currencies, the fundamental strength of the Swiss economy has an effect on the performance of the franc. Traders can find relevant data in government economic data releases on subjects ranging from general economic performance, industrial production, trade balances, inflation rates and interest rates.
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