ETH Beginner Guide: Pros and Cons of buying ETH

The market cap of ETH comes second in the world, and it is the second-largest cryptocurrency by volume, which is just behind Bitcoin. Even if you don’t follow the financial world closely, you are likely to be aware that cryptocurrencies have become one of its biggest stories recently.


However, the price of crypto can fluctuate a lot, which can be concerning to many investors. This article will detail what ETH is and compare it with Bitcoin. Moreover, it will also cover the trend of ETH, its key features and its risks.

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Getting to know ETH (Ethereum)

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What is Ethereum (ETH)?

Ethereum, which is the specific blockchain technology, was invented by programmer Vitalik Buterin and it was first released in 2015. Ethereum’s native cryptocurrency is called Ether (ETH). 


Like other cryptos, Ethereum was built on the principles of decentralized finance. Ethereum embraces an open-source software platform which allows developers to create cryptocurrencies and other secured digital applications, which can be anything from lending apps to payment platforms and with the potential to do far more. This is the reason why some believe that it could one day shunt Bitcoin from the top cryptocurrency spot.


Over the past year, Ethereum has gained in popularity and it is adopted by both retail and institutional investors alike.

Best Crypto Exchange

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First licensed virtual asset exchanges in HK
MoneySmart Exclusive
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HashKey Exchange

Transaction fees
Up to 0.29%
Custody Fee
HK$0
Account Opening Min. Funding
HK$10,000

【MoneySmart x HashKey】
During the promotion period, successfully open an account through MoneySmart and complete identity verification (KYC). Within 7 days, deposit at least HK$60,000, and maintain a daily average asset balance of HK$60,000 for 30 consecutive days starting from the next day. You will then be eligible to receive additional rewards of HK$500 Apple Store Gift Card / HK$500 PARKnSHOP supermarket vouchers / HK$500 HKTVmall e-Vouchers!
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From now until January 31, successfully open an account with MoneySmart and deposit ≥HK$10,000. Click here to share your stock trading plans and financial freedom insights to receive HK$188 (automatically converted to 1,880 SmartPoints) Submit your redemption form by February 28, 2025. Offer is subject to terms and conditions.

HashKey Welcome Offer [Provided by HashKey]
Task 1: Open an account online at HashKey Exchange using the exclusive referral link or invitation code and deposit HK$10,000 to receive 10 HSK; or
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Valid until 31 Jan 2025
HashKey Exchange is a licensed virtual asset trading platform in Hong Kong. It allows users to purchase various virtual assets, such as Bitcoin and Ethereum, using bank cards in Hong Kong dollars or US dollars.

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Webull Securities Account

Commission Fee US Stocks
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Account Opening Min. Funding
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Upon successfully opening an account through MoneySmart and making first deposit ≤HK$79,999 and maintain the funds for 60 days, can get up to HK$1,226:
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Year of the Snake Big Gift: Opening an account rewards you with a red packet 🧧
From now until January 31, successfully open an account with MoneySmart and deposit ≥HK$10,000. Click here to share your stock trading plans and financial freedom insights to receive HK$188 (automatically converted to 1,880 SmartPoints) Submit your redemption form by February 28, 2025. Offer is subject to terms and conditions.

Valid until 31 Jan 2025
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Futu Securities Account

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US$0.99
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Reward 1️⃣: Successfully open account and first deposit HK$80,000 or above and retain for 60 days to get the exclusive rewards:

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Year of the Snake Big Gift: Opening an account rewards you with a red packet 🧧
From now until January 31, successfully open an account with MoneySmart and deposit ≥HK$10,000. Click here to share your stock trading plans and financial freedom insights to receive HK$188 (automatically converted to 1,880 SmartPoints) Submit your redemption form by February 28, 2025. Offer is subject to terms and conditions.

Account opening tutorial: Download and start using Futubull app > Click "ME" and enter "Promotion" Click "Redemptions"> Enter the MoneySmart redemptions code - "MS24", and deposit funds within 7 days

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Min. Commission Fee US Stocks
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Extra Treats! - From 9 January 2025 to 31 January 2025, Successfully open account and submit Redemption Form within 14 days after the promotion ends, can earn an additional 12 months of Deliveroo Plus Silver membership and a cash voucher redemption code (valued at HK$726) (Limited offer, first come first served, while stocks last) !
⠀⠀
Year of the Snake Big Gift: Opening an account rewards you with a red packet 🧧
From now until January 31, successfully open an account with MoneySmart and deposit ≥HK$10,000. Click here to share your stock trading plans and financial freedom insights to receive HK$188 (automatically converted to 1,880 SmartPoints) Submit your redemption form by February 28, 2025. Offer is subject to terms and conditions.

See below for more rewards.

Valid until 31 Jan 2025
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Min. Commission Fee US Stocks
US$0
Commission Fee HK Stocks
HK$0
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HK$10,000
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Valid until 31 Jan 2025

ETH vs BTC: What’s the difference between Ethereum and Bitcoin?

ETH vs BTCETHBitcoin (BTC)
PriceUS$2,736.62 (As of 5 May 2022)US$2,736.62 (As of 5 May 2022)
Supply Unlimited 21M
Units1ETH=10^18 Wei1BTC=10^8 Satoshi

Key Features of ETH

ETH has an Infinite Supply

Unlike Bitcoin, ETH offers an unlimited supply. Bitcoin's supply cap is limited, standing at 21 million, meaning that once this limit is reached, there won’t be any additional Bitcoins available to mine, making it a precious but finite resource.
However, ETH doesn’t work in this way. It can never run out and its prices are not supported by the cap but its digital applications and its market value.

Ethereum Can be Used Widely

Ethereum can be used to create digital apps e.g. NFT. Think of Ether as the crypto token derived from the Ethereum blockchain, which allows encrypted data to be transferred securely, which makes it next to impossible to counterfeit. Moreover, Ethereum-based apps are built using its key innovation: “smart contracts”, which is just like regular paper contracts, which can establish the terms of an arrangement between parties.

ETH Price Has Been in a General Upward Trend

The market cap of ETH comes second and it is also the second-largest cryptocurrency by volume, which is just behind Bitcoin. Moreover, in the last 3 years, its price has increased by more than 1500%, and is purchased by both retail and institutional investors. But it also comes with risks.

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Risks of Investing in ETH

The Price of ETH Can be Volatile

Although the price of ETH has been rising by more than 1500% from 2019 to 2022, it actually experienced quite a significant drop, from US$100 to US$1300 in 2018. Like other crypto currencies, its price can fluctuate a lot, which can be very concerning for risk-averse investors. You may have concerns about the rapid changes in the market.

Ethereum May Not be Widely Used Anymore

Ethereum can be used widely and ETH has been rising because of the popularity Ethereum has gained. However, if Ethereum is not widely used anymore, the price of ETH will dip.

Security Issue

Different from traditional currencies, ETH exists in digital form and stored in a digital wallet. If you lose your private access key, you may end up losing your ETH forever.

Virtual Commodity - Not Considered as Legal Tender

ETH is not considered a legal tender, which is outside the regulatory ambit of the Hong Kong Monetary Authority. Therefore, if the crypto exchange goes bankrupt or shut, your access is not protected by the Hong Kong government.

FAQ on investing in ETH

Is commission charged when purchasing ETH?

No, you are not charged commissions in most cases.

Does ETH have a supply limit?

No, it doesn’t have a cap.

What is the difference between ETH and BTC?

ETH doesn’t have a cap in supply but the cap of BTC stands at 21M. Also, the key feature of ETH is that it can be used in Ethereum - which can be seen as a platform for any digital applications.

What is Ethereum? Are Ethereum and ETH the same?

No, they are not the same. Ethereum is the specific blockchain technology, which allows developers to create any apps and Ethereum’s native cryptocurrency is called Ether (ETH).