Learn Where & How to Buy Ethereum (ETH) - A Beginner's Guide
If you are interested in buying and selling Ethereum (ETH), the first thing you should have is a secure place to hold your ETH tokens. While Ethereum price has seen substantial gains in the last few months, you have to ensure that your investment remains safe. One of the most popular choices is relying on a software or hardware wallet. Some of them are built into the cryptocurrency exchange or broker platform while others can be downloaded as mobile or desktop applications.
Once you have decided if it is worth it to buy Ethereum, you can choose between a wide range of online platforms depending on your investment strategy.
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3 Things to Consider Before Buying Ethereum
When we compare Ethereum with Bitcoin, Ethereum blockchain appears to be superior as it is just not an alternative digital currency but a comprehensive platform designed to facilitate decentralised app development along with smart contracts. There is a reason why Ethereum has been able to hold its second position in the market behind Bitcoin because of its enhanced future potential. With the ETH 2.0 update, Ethereum has become more valuable than ever.
In the beginning, Ethereum went through turbulent times as a platform but has now become one of the most trusted blockchain networks. So much so that Ethereum is a go-to option for every altcoin that wants to conduct an Initial Coin Offering (ICO). Moreover, many financial institutions and technology giants are getting behind the network to make it more robust. It is by far the most improved blockchain network among all.
The current supply of ETH is just a little over 113 million with investors seeing a price surge of 236% year over year. This means that Ethereum has been in high demand, and ETH 2.0 will allow it to be mined easily and in a more environment-friendly manner. The new update has made a shift from Proof of Work model of mining to Proof of Stake protocol which doesn't require exorbitant amounts of computing power.
Where to Buy Ethereum in 2021?
Before you buy Ethereum for investment, you need to understand that there are two different ways to buy and sell Ethereum. Some investors believe in the cryptocurrency seeing it as the future of currencies and want to own a large amount so they can make big gains in the distant future. While others see the volatility of Ethereum and cryptocurrency markets in general and want to capitalise on quick price changes to earn profits through the day to day trading. There are pros and cons to every approach, but it's important to know which camp you are in before you buy Ethereum stock.
In the event that you want to invest in Ethereum and hold it for a long time, you need to have a dedicated wallet to ensure your crypto funds remain secure. One of the key advantages that Ethereum has is its robust security and fast development pace. Ethereum network has been constantly improved, and in the last twelve months or so, the ETH token has seen immense growth. For a long term investment strategy, you will need to rely on a crypto exchange.
On the other hand, if your investment strategy is all about making quick gains using the volatility of the Ethereum price, you can generate a decent secondary income through that method. However, it is recommended that you only invest what you can afford to lose. You don't need to have a dedicated wallet since trading platform wallets are sufficiently secure to hold ETH tokens for a few hours or days. For this kind of investment strategy, you will need to go to crypto broker websites or trading platforms.
Our Tutorial to Buy/Trade Ethereum in 5 Steps
The following guidelines and information cover how you can get started if you are interested in buying Ethereum, both with brokers or exchange. Here are some of the most important steps you need to take.
Step 1: Find an Appropriate Platform to Buy/Trade Ethereum
As it has already been discussed that if you want to own the ETH token, you need to go for an exchange and if you just want to trade then brokers will be a much better choice. Whatever platform you choose, ensure that you research their pros and cons to identify whether they are regulated and trustworthy enough to invest your money. Look for regulatory compliance, user-friendliness, fee structure for the cheapest way to buy/trade Ethereum, online reviews and available payment methods before you decide. You can choose a platform that offers features according to your preferences.
For instance, eToro and Plus500 are two of the most renowned brokerage websites, while Coinbase and Binance are highly praised crypto exchanges. If you want to go for convenience and user-friendliness, then eToro and Coinbase are better choices. However, if you want more control and freedom over your investments, Plus500 and Binance give you exactly that.
Step 2: Registration / Create a New Account
After you have chosen which crypto platform suits your requirement, you’ll need to register with that platform and create a new account. There are a few differences in terms of what platforms require from the users who want to sign up, but usually, you will only need to fill in basic documentation such as identity proof and bank account details.
While there are platforms on the web that require fewer KYC documents and deliver enhanced anonymity, it is riskier to do business with them as they might not be adequately regulated.
Step 3: Deposit Funds
Once you have signed up, you can now move on to the step of depositing your funds that will act as your working capital. Before you do that, ensure that you are choosing the right payment method as most platforms offer a diverse variety of payment modes including bank transfers, debit card, credit card, PayPal and other e-payment solutions to buy Ether. You need to weigh the payment method expense, speed and convenience to finalise your decision.
Also, keep in mind that different platforms have different minimum deposit limits. Some like Skilling will ask for only $100 while some may not have any minimum limit at all such as Pepperstone. Transaction fees will also be different from platform to platform.
Step 4: Start Trading or Buying Ethereum
After you have set up your account and deposited your working capital, you are ready to buy Ethereum tokens. If you have selected a broker, then it will enable you to trade Ethereum in the form of Contracts for Difference or CFDs and other financial instruments. If you want a more comprehensive approach and desire to own ETH tokens, exchanges will give you that option along with a secure wallet.
Having said that, as the demand for Ethereum tokens is so high and diverse, there are other platforms as well. For instance, on eToro, you can engage in direct trading but they are also brokers. Moreover, some exchanges, including Binance and Bitmex offer crypto investors the financial trading tools such as futures contracts, crypto loans margins and leveraged tokens. Few of these features include advanced trading methods and can be quite risky if not done with prior knowledge and trading awareness.
Step 5: Optional Steps
Once you have started to trade Ethereum, it is time to decide what you will do with your ETH tokens and how you are going to keep them secure. Here are some of the leading options for Ethereum investors:
- Move funds to a wallet:
You can use the built-in wallet provided by the platform or get your own software or hardware wallet to keep your ETH secure.
- Participate in staking:
If you want to provide support to ETH miners and developer community who ensure Ethereum remains operational, you can put your ETH tokens in certain wallets that you can put your tokens into that serve to provide financial support to the operations and security of the Ethereum network.
- Sell high, rebuy low:
If your primary objective is to gain maximum profits from the crypto exchange, then you would want to keep an eye on the price surges to sell at a ceiling. Once it drops to the floor, you can buy again and keep repeating the process to make money.
Available Payment Methods for Buying Ethereum
Subject to availability and your own requirements, you will find that there are various payment modes that are better suited to your investment strategy. Some of the best ways to buy Ethereum are listed below.
- Buy Ethereum with Cash
If you want to buy Ethereum with cash, you can go to the nearest Ethereum ATM or teller service to do so. Use CoinATMRadar.com to find the nearest Ethereum ATM.
- Buy Ethereum with Credit / Debit Card
You can also use your credit or debit card to buy Ethereum as many of the leading crypto platforms have made this option available including Coinmama, eToro and Coinbase.
- Buy Ethereum with Bank Transfer
If you want to buy Ethereum through bank transfer, it will depend on your country of residence. Coinmama has the widest availability among all platforms and works with almost all countries. You can check whether your platform of choice supports bank transfers or not.
- Buy Ethereum with Cryptocurrency
- Buy Ethereum with PayPal
Currently, it is quite challenging to buy Ethereum with PayPal due to regulatory issues. That being said, crypto platforms as well as blockchain networks are working tirelessly to bring this option to the users. PayPal has recently rolled out its crypto services in the US.
What Are the Fees for Buying Ethereum?
Wondering how to buy Ethereum without fees? Unfortunately, this is quite hard to do. At the time of writing, the average transaction fee of ETH token on the network is $0.9599 per transaction, almost a 600% increase from last year when the fee was hovering around the mark of $0.1325 per transaction.
Moreover, the charges and fees levied on by different crypto platforms, including trading brokers and exchanges vary in terms of percentage and fee structure. Generally, usual buying and selling through bank transfer will cost you 0.5% to 2% while instant buying using credit or debit cards can cost you back anywhere between 3% to 7%. The pricing structures aren't that complicated, but they vary substantially based on multiple factors such as payment mode and geographical location.
Expert Tip to Buy and Sell Ethereum“ If you want to become a successful investor or trader, you need to restrain yourself emotionally. If there is a missed opportunity, don’t be too hard on yourself. In the crypto space opportunities are ample, and missing out on one isn’t the end of the world. Let the price hit the floor before you pull the trigger instead of buying at a high price in the fear of missing out. Ensure that you are managing your risk. ”
How to Find the Best Time to Buy Ethereum
If you want to actively trade by putting your capital on the line, you need to do the homework on every coin and keep up with the latest developments and news. Reading different analysis and predictions by experts can also assist you in making an informed decision on when is a good time to buy Ethereum. Most importantly keep an eye on the price movements. You will begin to notice price trends which will enable you to improve the accuracy of your trades.
What Drives the Coin’s Price?
Since cryptocurrencies like Ethereum have risen in importance in a pandemic-hit world, everything from rumours and political events to social influences and opinions of pundits can have an effect on the price. Since there is no central authority to control the price, Ethereum's price is determined solely by market factors.
How to Sell Ethereum
If you want to sell your Ethereum to make a profit, you can do so in three different yet effective ways:
Crypto Exchange - If you own ETH tokens, you can sell them on an exchange for fiat money or other cryptocurrencies.
Trading/Broker Websites - If you have invested in financial instruments like ETH CFDs, then you will have to choose a crypto broker to sell off your Ethereum.
Peer-to-Peer Network - These are marketplaces which help buyers and sellers of cryptocurrencies to buy and sell ETH tokens.
Frequently Asked Questions
No, it’s a decentralised platform with no specific individual or central authority having control or influence over the Ethereum network.
Yes. There are many websites where you can spend your ETH tokens for day to day shopping.
If you have a secure dedicated wallet and you have taken security measures to prevent breaches, your Ethereum funds will remain secure for years.
Not at all. Ethereum’s current highest price ceiling is $1,400, which means that there is more than enough headroom in the price for new investors to get in. Just make sure that you are buying at the right price and not during a surge.
It depends on the amount you invest and your strategy. Ethereum price is highly volatile, and you can either hit a jackpot or will have to wait to make decent gains.
This will depend on where you live. Check taxation laws of your country to see whether they classify Ethereum as an asset and if they charge any tax on gains you earn.
Market forces, including supply and demand dynamics. Apart from that, opinions of influencers and experts and social and political developments also affect the price.
There is no guarantee that you will make money on your investment since Ethereum is still in its development phase.