Ethereum Risk Management

Crypto Financial Planning
2 min readNov 8, 2020

--

Is now, today, November 8, 2020 a great time to buy Ethereum? It depends.

ETH 7/20/16 to 11/8/2020

Ethereum, generally speaking, is an exciting technology. When Ethereum launched in 2014, it was an exciting innovation with respect to smart contract capability. In 2008, Bitcoin gave us, for the first time ever, truly frictionless peer-to-peer commerce on the internet. But, it was Ethereum that gave us the ability to program a smart contract, and after an if/then condition is satisfied, there is an automatic reward of a token. Since that time, there have been incredible innovations around stablecoins, DeFi, and a growing awareness that virtually any asset can be tokenized. Presently, Ethereum is about to launch Ethereum 2.0 to fix scaling issues to generally help enable a faster, cheaper Ethereum to enable ever faster scale up of DeFi and other tokenization projects. So, all in all, Ethereum probably has a very exciting future and thus represents an exciting long-term investment. However, there are competitors to Ethereum such as Dfinity, Stellar, Cardano, but for now, most development occurs on Ethereum, so we’ll focus on Ethereum (though we’ll cover others in the near future).

Buying Ethereum in June 2016 and HODLing has no doubt provided an incredible return of ~3,200% as of today. However, over the past 4.5 years, Ethereum has been very volatile. Crypto Financial Planning continuously assesses Ethereum’s long-term oversold and overbought conditions. By doing so, there were times to buy when Ethereum got oversold, and times to sell Ethereum when it got too overbought. Following this methodology has led to a 19,900% gain. The last buy signal was on 8/13/18 around $309.54. Currently, we are in a pattern to hold Ethereum. It is not a great time to buy Ethereum since Ethereum is currently moderately overbought, but it is still ok to buy Ethereum. As many do, it is certainly acceptable and prudent to dollar cost average into Ethereum on a weekly or monthly basis. Regular updates will be given to Ethereum’s price action as we will have lots more conversation about this ever-changing cryptocurrency.

--

--

Crypto Financial Planning
Crypto Financial Planning

Written by Crypto Financial Planning

Crypto Financial Planning wants to help make the most of your Ethereum, Bitcoin, and other crypto through good risk management to enable your long-term goals.

No responses yet