Ethereum is one of the largest cryptocurrencies in the market in terms of market capitalization. By investing in successful cryptocurrencies like these, you increase the opportunity of realizing significant gains in the future.
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In this article, we will show you how to buy Ethereum. Before we begin, we must stress the importance of practicing prudence in buying cryptocurrencies. Because of cryptos’ high volatility, there would be times when you would experience significant dips in prices.
Before buying Ethereum or any other cryptocurrency asset, make sure to perform your research and analysis to determine if Ethereum is the best crypto for you.
Before buying Ethereum, you need to register with a cryptocurrency brokerage. A brokerage platform is where you can buy and sell assets.
There are many brokerages out there where you can register for an account for free. Here are some of the most trusted and highest-rated brokerages out there.
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Cryptocurrencies are very volatile and overall a risky investment. 69% of investor accounts lose money when trading CFDs
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Founded in 2007, eToro is a good brokerage primarily for copy and cryptocurrency trading. For cryptocurrencies, eToro offers various digital assets to selected countries.
The biggest praise about this trading platform is the smooth transactions experienced by its users. eToro also offers numerous programs designed for different types of investors. The most popular account is a VIP club membership for traders and investors with balances between $5,000 to $250,000.
Aside from the VIP accounts, eToro also offers an investor program that allows its users to pick between four levels: cadet to elite. The higher the investor climbs in the investor program, the higher the potential awards.
EToro’s pricing maintains the industry average of 0.75% for cryptocurrency trading. Unfortunately, you might experience trouble with the platform’s high conversion fee.
Crypto assets are unregulated investment products. Your capital may be at risk
Founded in 2016, this online broker has offices in the UK, Cyprus, Belarus, Gibraltar, and the like. Currently, this trading platform serves numerous clients from 183 countries worldwide. Aside from cryptocurrencies, this platform offers more than 27 indices, 37 commodities, and 3,293 shares.
Capital.com primarily serves investors and traders looking for a more premium user experience. This platform focuses more on artificial intelligence to improve the user’s experience.
The best feature of this application is its Learning Mode, specifically for newer traders. This feature allows investors to take free webinars and courses to familiarize themselves with the trading industry.
Capital.com offers numerous deposit methods to make it more convenient for traders and investors to transfer cash to their accounts. The company collects very little commission fees to allow traders and investors to maximize their earnings with every trade.
Binance offers one of the lowest trading fees for crypto investors. As one of the leading cryptocurrency exchanges, Binance offers more than 50 cryptocurrencies on its platform.
Binance’s fees are the lowest in many US brokerage platforms, charging only 0.1% for every trade. Aside from its low prices, investors and traders also know this platform to be more efficient than the others in the industry.
Developed in China in 2017, company founder Changpeng Zhao innovated a new software system that would match orders for day traders.
Binance’s cryptocurrency selection also includes Ethereum and other popular digital assets. Accompanied by its low prices, you could get a great bargain in your trades to help you maximize profit.
Coinbase is another crypto exchange that offers over 100 cryptocurrencies like Ethereum, Bitcoin, and Dogecoin. Currently, Coinbase houses over 73 million users while holding at least $255 billion in assets.
The best part about Coinbase is its accessibility, especially for newer cryptocurrency investors and traders. If traders and investors pay for Coinbase Pro, they can benefit from more features and lower fees.
Crypto.com is a relatively new cryptocurrency exchange that offers over 150 cryptocurrencies, providing reasonable fees and discounts for its users. Crypto.com also offers its cryptocurrency that allows you to benefit from lower trading fees and high-interest rates.
The platform is straightforward for both Android and IOS. Crypto.com prides itself in providing increased security for its users, requiring two-factor authentication to begin trading.
Gemini offers 52 cryptocurrencies on its trading platform. The best part about this trading platform is its accessibility for different countries. Gemini is also available in all 50 US states.
Aside from its numerous features, the platform is perfect for the newer and advanced trader. The platform’s interface would provide up-to-date cryptocurrency prices for day traders.
Now that you have all the information for the best trading platforms to buy your first cryptocurrency asset, we will show you a step-by-step guide to buying Ethereum.
Before we begin, we would like to state once more the importance of deep research before investing in cryptocurrencies.
The biggest hindrance in cryptocurrencies is their extreme volatility. In other words, the prices of cryptocurrencies could fluctuate up and down, potentially giving you large returns or very deep losses. We recommend researching the industry before buying Ethereum or other cryptocurrency assets to avoid losing too much.
For our step-by-step example, we will use eToro as our trading platform when buying Ethereum. Nevertheless, our step-by-step procedure would apply to almost all trading platforms.
Before this section, we showed you six great brokerage platforms that you can start trading in. Regardless of the platform you choose, the process should remain the same.
In the mobile app, provide all the necessary information required from you. Some trading platforms require you to provide proof of identification like your driver’s license, birth certificate, and the like.
Some trading platforms would also require you to make your first deposit by linking your bank account to the platform. Some platforms would provide you incentives for making your first deposit in the platform.
In the next section, we will show some standards you can consider when finding the right platform for you.
After completing the registration process, the platform would bring you to the trading area, where you can choose between many cryptocurrencies.
Find Ethereum’s code “ETH” among the selections and tap on it. After tapping on the coin code, you will see various information to help you make your trading decision.
The biggest mistake you can make right now is clicking the “buy” button right away. While viewing the information on Ethereum, you would see the coin’s chart to show the price movements during a period.
If you want to do your own analysis on Ethereum, you could use eToro’s trading tools to help you make your trading decision.
The best part about eToro is that it allows you to copy the trading strategy of another person. If you trust the person enough, you could follow their trading strategy, hoping that their investment decision would bring you more gains.
Before deciding, you would also want to define what kind of investor you would be. We recommend holding your asset to prevent price fluctuations from influencing your buying decision if you are a beginner.
After doing your analysis, you should finally decide if Ethereum is the best crypto asset to invest in.
If you are a beginner, your biggest enemy would be your emotions. As we stated numerous times throughout this article, cryptocurrency is a highly volatile market. Without emotional control, you increase the opportunity of making rash decisions when the prices fluctuate.
If you analyze the price chart of Ethereum, there were those moments when ETH hit all-time highs, and there were moments when ETH dipped to irrecoverable amounts.
As a beginner investor, we recommend holding your coins to make a play on the digital asset’s long-term success. This strategy would prevent you from making impulse decisions that might bring you more damage than benefits.
Diversification can be a tremendous asset in a highly volatile market like cryptocurrencies. If you are still scared of ETH fluctuations, you can consider spreading out your funds to different successful coins.
In this way, you would mitigate your risks if ETH suddenly dips down. In case of a market correction, your other assets would help prevent your losses from being too much to recover from.
Choosing the right platform is vitally important in maximizing your returns on your digital assets. Some companies value their clients by maximizing their returns, hoping that they would continue to trade with the platform. On the other hand, some clients would transfer from insane hidden charges that would eat too much of their earnings.
To prevent falling victim to weak platforms, we provided you with some principles to consider in finding the best cryptocurrency trading platforms for you.
Find a trading platform with various digital assets to choose from. A trading platform with many cryptocurrencies would help you diversify your cash to other digital assets.
Nevertheless, since Ethereum is one of the largest cryptocurrencies on the market, almost all trading platforms would offer Ethereum in their platforms.
Despite how good a cryptocurrency trading platform might be, it would be no use if their services do not cover your country.
Take time to scout through the selections to find the proper jurisdictions to become a broker in your country.
Transaction costs are charges given to you by the trading platform to “pay” them for using their platform. Despite most platforms providing you free registration, selling your crypto assets on the market would require you to pay hidden charges for using the platform.
These transaction costs can significantly decrease your earnings from your crypto assets.
To prevent hidden costs from eating too much of your earnings, you would want to find a trading platform that would charge the least among its competitors. Stay away from trading platforms with at least a 5% transaction fee as a rule of thumb.
Since this platform would also hold your money for quite some time, it is extremely important to look at the company’s security procedures. A trading platform with weak security would convince hackers to steal information from you to steal the coins you recently bought.
To prevent hackers from retrieving your account, reliable trading platforms would provide numerous security barriers. Try looking at the company’s security procedure to find out if it would be sufficient to hold off hackers.
When transferring money to these trading platforms, they would require you to deposit a minimum amount to your account. Some platforms require larger deposits, making them less attractive for beginning investors.
As a beginner investor or trader, you would want to find a trading platform requiring the smallest investment. This minimum deposit would minimize the risk while ensuring that you do not invest the money you could not afford to lose.
When dealing with money, it is vitally important to have a platform that would not only serve as an intermediary but as a partner in maximizing growth. Some trading platforms offer 24/7 customer service to address the needs of their clients.
However, some trading platforms only address their users through email, making it difficult to respond.
If you plan to get into cryptocurrency trading, you will need a trading platform that provides effective tools to help you with your technical analysis.
We also recommend taking courses that teach you proper technical analysis to estimate where the prices would go in the future.
Depending on the cash you initially deposited into your trading account, some trading platforms would only provide you with the most basic analysis tools.
In the words of Warren Buffet, probably the most successful investor in the world, the market “is designed to transfer money from the active to the patient.” The key to succeeding in every market is holding your asset for as long as possible while allowing capital appreciation to increase your holdings.
However, there would be times when you would need to sell your cryptocurrency holdings. If, after careful analysis, you make this decision, here is a step-by-step guide to selling your Ethereum assets.
For this demonstration, let’s use the eToro trading platform to close the trade.
In avoidable circumstances, you would need to sell your assets to cut down on losses or to make a play on something else. Here are a few indicators to look for when deciding whether to sell your assets.
A potential downward correction might prevent prices from rising above your entrance price when buying ETH at its peak. To prevent further downward movements from the market, you could close your position and stop any further losses.
Experienced traders and investors would cut down on a position to use the proceeds of their holdings for other investment opportunities. For example, if you find better gains in another crypto asset, you will want to sell your ETH holdings and invest in the other crypto.
Here are some other reasons for selling your cryptocurrency assets:
Regardless of your reason to sell, make sure that this reason has nothing to do with emotion but more of logic and strategy. If you happen to sell on emotion, you could miss out on future gains when cutting down your position at the beginning of bearish movements.
A crypto wallet is software or hardware that allows you to interact with the Ethereum blockchain. More precisely, an Ethereum account would allow you to send and receive Ethereum transactions while incurring interest in the process.
Finding the right crypto wallet would provide further protection for your newly purchased digital assets while preventing any hackers from stealing them.
Here are two kinds of wallets that you can consider storing your Ethereum coins in.
Online wallets, otherwise known as hot wallets, are those wallets that function online or through a company platform. In other words, hot wallets would not require hardware to carry around to store your digital assets.
Here are some of the online wallets you could start using to store ETH:
Cold wallets are wallets that store your ETH holdings offline. Cold wallets are like bank accounts and safety deposit boxes. Like safety deposit boxes, cold wallets would provide additional security to prevent people from stealing these digital assets.
Cold wallets usually come in pieces of hardware that you would need to attach to a computer to use your Ether.
Here are some cold wallets you could start looking at:
The perfect wallet is the one that can hold your assets securely until you choose to spend or sell them. If you choose a hot wallet, find the wallet that would protect your assets online, usually requiring extra authentication to access these digital assets.
On the other hand, a cold wallet would usually be more expensive than a hot wallet. However, a cold wallet would technically be safer than a cold wallet since it would require less time online to store your digital assets.
A good rule of thumb to consider is to only start looking for a cold wallet if you are storing more digital assets.
The saying goes, “invest in the things you already know.” To help you understand Ethereum more, here are some additional facts you can use in helping your investing decision.
Ethereum was a crowd-sourced project that aimed to liberate transactions from financial organizations and governments. Vitalik Buterin had the idea of creating something that was too expensive to fund.
As Buterin’s motives attracted more people, Buterin resulted in crowdfunding, which eventually became successful in 2015.
Buterin came up with Ethereum in 2013 as a teenager, which convinced Dr. Gavin Wood to partner with Buterin to improve Ethereum in the next year.
The biggest misconception is that the government is out to get cryptocurrencies because of its attempt to decentralize monetary transactions. Although a part of this fact is true, numerous financial institutions supported this digital asset.
One of the greatest instances of this support was with R3, a startup company in the Ethereum network. R3 managed to use the Ethereum network to fix a blockchain problem.
This reliance on the Ethereum network got the attention of different financial institutions that almost 84 financial institutions support the initiative.
Ethereum focuses on decentralized applications. Ethereum is a network of developers and users that provide feedback to improve the network.
Ethereum allows other people to build off the network through its programming language, unlike other cryptocurrencies. Ethereum is also working on implementing open-source reference standards.
Through the open-source nature of Ethereum, this network could benefit institutions and organizations in the automotive, healthcare, entertainment, technological, and consultancy industries.
Ethereum focuses on decentralizing contracts by using them as collaterals. Financial institutions could increase efficiency by removing intermediaries in contract-making by advocating for smart contracts.
This initiative most especially benefits healthcare systems in the renewal and closure of work certificates.
Ethereum and Bitcoin continue to be in a back-and-forth battle for the largest cryptocurrency in terms of market capitalization. Although Bitcoin is still 1st in size, Ethereum shows its competitive advantage through other features.
Currently, Ethereum has a faster mine rate than Bitcoin. Since its inception, Ethereum’s mining process involved Proof of Work to attract miners to maintain the Ethereum network.
However, Ethereum intends to shift from Proof of Work to Proof of Stake through Casper. Since this algorithm could make mining less profitable, this change could significantly affect Ethereum’s efficiency and attractiveness.
Ethereum shows significant potential to surpass Bitcoin in market capitalization. With the coin’s support from financial institutions, Ethereum could be a standard-setter in the industry.
Ethereum has low scalability because of its Proof of Work model. This model can only process 13 transactions per second (TPS) when the actual demand is 1.355 million TPS daily.
Ethereum primarily focuses on verifying and recording transactions in a decentralized public ledger. Ethereum users would use the network to monetize certain applications by paying Ether to different parties.
Mining one ETC would normally take you 7.5 days, depending on the difficulty rate of the system.