If you’ve got minimal experience with cryptocurrencies, learning how to buy Ethereum might feel daunting. Don’t worry, though, because the process is pretty simple. Ethereum is one of the biggest cryptocurrencies out today. On this page, you’ll learn how to buy and trade, along with what you need to consider when investing.
Best brokers to buy Ethereum in 2021
Part of knowing how to buy Ethereum is choosing the right broker. Several options exist already, and the market continues to grow daily. Some brokers are safer than others, and the broker you choose can also determine the deal you get. To save you time searching, we’ve put together a list of the best providers below.
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.48% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
What is the difference between buying and trading Ethereum?
When investing in Ethereum, you can either buy or trade the coin. Understanding their differences is an excellent place to start before we look at how you can do either of these.
Buying: When you buy Ethereum, you own the coin outright. As such, you pay the total market value. Buying Ethereum means that you often look at the long-term game.
Trading: When trading Ethereum, you don’t need to pay capital gains tax. Trading is better for short-term investors, though you can also use it as a long-term strategy.
How to buy Ethereum online
Okay, so now you know the difference between buying and trading Ethereum. If you’ve decided that buying is a better option, you’ll find a step-by-step guide to doing so below:
Step 1: Find a cryptocurrency exchange
Step 2: Sign up for your exchange of choice
Step 3: Make a purchase
How to trade Ethereum
Of course, buying Ethereum is not for everyone. In some cases, you might decide that trading fits your goals better. Below are the steps you need to take to trade Ethereum:
Step 1: Find a broker
Step 2: Deposit money into your account
Step 3: Decide how you want to trade
Step 4: Start trading Ethereum
What are the different ways to pay for Ethereum?
When you’re ready to buy Ethereum, you’ve got plenty of options for doing so. Below are four ways you can make a purchase:
Credit and Debit Cards
You can use credit and debit cards to buy most things online, and Ethereum is no different. The only real difference between which one you use is that debit cards use money directly from your linked bank account, whereas you can pay credit card purchases back later.
Easy to use
No additional sign-ups required
Heavy fees often involved
Could affect your credit rating
Hard to keep apart from your other finances if you use your primary bank account
PayPal is one of the best-known names in financial services, with over 300 million active users across the globe. In recent years, the payment provider has become open to cryptocurrencies, making it an ideal option for depositing money with exchanges and brokers.
Venmo, owned by PayPal, also allows you to pay for Ethereum.
Signing up for an account is free and easy
Buy and sell within your PayPal account (selected markets only)
You can only use PayPal’s cryptocurrency solution within PayPal
You can’t use PayPal on some crypto exchanges
PayPal could freeze or suspend your account if they deem necessary
Cash and ATMs
You can also use cash to pay for Ethereum. ATMs in several countries, including the UK, Germany, the US and Canada, allow you to do so. You’ll typically need a QR code, but the process isn’t complicated.
Widely available, especially if you live in a large city
Convenient when you’re out and about
Not available in every country
Less convenient than paying for Ethereum online as you need to visit a land-based location
You might need to pay significant fees
Skrill is a digital wallet solution owned and operated by UK-headquartered Paysafe Group. Like PayPal, the service has been pretty welcoming when it comes to cryptocurrencies. You can use Skrill in more than 120 countries.
Fiat-to-crypto withdrawals (in selected markets)
Accepted at several crypto exchanges and brokers
Exchange fees may apply
Not accepted at every crypto exchange
What to consider when buying Ethereum
When buying Ethereum, you’ll need to make several considerations. To help you make better decisions when investing, you’ll find some of the primary aspects to keep in mind below:
Fees: Fees will vary depending on how and where you buy Ethereum. Before purchasing, consider all of the possible payment solutions, exchanges and brokers.
Volatility: Ethereum is known for its volatility, and prices can fluctuate dramatically in little time. If you’re making short-term investments, you must keep an eye on the market.
Prices: Because Ethereum is one of the most popular cryptocurrencies, you’ll need to pay more if you want to buy coins. Like with anything else, don’t buy what you can’t afford.
Profitability: Ethereum has grown significantly since the beginning of 2020. Again, though, profitability in the future will depend on market trends, so make sure you keep updated with the latest news.
Regulations: While Ethereum itself runs on a deregulated system, some governments have not taken a kind approach to cryptocurrencies. It’s legal in the UK and US, but not in Indonesia or Turkey. Make sure you’re legally allowed to use cryptocurrencies where you live before investing.
Long-term Holding (HODL): Hold on for dear life, also known as HODL, means holding onto your Ethereum during market crashes. It’s often used as an investment strategy to maximize profits.
Short-term Holding: Short-term holding refers to buying and selling coins based on short-term market speculation.
Is it safe to buy Ethereum online?
Buying Ethereum is normally safe if you pay for the coin using a reputable broker or exchange. However, cryptocurrency scams are commonplace – so you need to exercise caution.
You can improve your online safety by doing the following:
Storing your coins in an offline wallet
Using two-factor authentication (2FA)
Only asking for help on an official website
Creating a hard-to-guess password for your accounts and using different codes
Passing only relevant information for know-your-customer (KYC) checks. Your name is okay to share, but your bank card’s PIN is not.
How to store Ethereum
Once you’ve bought an Ethereum coin, we recommend that you store it in a wallet. Doing so will both help protect yourself better and keep everything organized. You can store Ethereum in any of the different wallet types:
Cold Wallet: Offline wallets that can either be on hardware or in the form of paper with a code written on it. This safest version of a wallet that you can use.
Online Wallet: Several online Ethereum wallets exist. You can use these to access your coins from anywhere and will need to verify your identity when you sign in.
How to sell Ethereum
You can sell your Ethereum coins using various methods. The most popular and secure ways to do this include:
Cryptocurrency exchanges are a convenient way to sell Ethereum coins. All you need to do is set up a selling order on your account, and the platform will do the rest.
Easy for beginners to use
Not immune from security threats
Fees are often involved, meaning you won’t get the full sale value
Exchange rates may vary
ATMs are helpful for buying cryptocurrencies and you can also use them to sell your Ethereum coins. As long as you live in a covered area, you shouldn’t have too many issues finding one that can facilitate this type of transaction.
Easy to use
Available in several countries
Not as widespread as standard cash ATMs
Brokers are popular for investors looking to trade cryptocurrencies rather than buying them outright. Some of the best-known platforms include eToro and Binance.
Trade both Ethereum and Ethereum Classic
Some platforms let you follow others, helping you gain tips and build a sense of community
High sell-on fees
You might not get access to trading on weekends
You can also sell Ethereum on peer-to-peer (P2P) platforms. On these, you can talk to others about pricing and the like before making transactions. Unlike brokers and exchanges, P2P Ethereum selling doesn’t have a middleman.
Speedy transactions (once executed)
Potentially better pricing than market rates
The risk of scams
Negotiating might delay the speed of transactions
Increasingly, digital wallets are allowing users to buy and sell the major cryptocurrencies. While this isn’t ideal if you choose a smaller currency, it shouldn’t be much of an issue for Ethereum. Skrill allows this, and so does PayPal.
Manage everything from within the same app
Easy to understand if you’re new to cryptocurrencies
No need to sign up with a broker or exchange
You could run into significant transaction charges, depending on the service you use
Centralized (though some might consider this a pro)
Is it worth buying Ethereum right now?
Even with a couple of significant crashes, Ethereum has grown significantly in the past 18 months or so. With its price rising along the way, buying the coin has become more expensive.
At the time of writing in October 2021, Ethereum’s price is doing well, but it’s probably not worth investing in the short-term. If you’re looking for something to invest in for the long-term, however, you might want to consider making a purchase.
Having read this guide, you should have a good idea about where you can buy Ethereum and the payment methods you can use. You’ll also understand the associated risks and how you can mitigate these.
If you’ve decided to buy Ethereum and can’t use cash, your debit card is currently the best option. While fees are high, it’s more convenient and widely accepted than other providers.
Can I buy Ethereum in any country? While Ethereum itself is borderless, local restrictions will determine whether you can buy this coin. Make sure you’ve checked regulations where you live before purchasing.
Is there a limit to how many Ethereum coins I can buy? At the moment, Ethereum doesn’t have a supply limit, and, theoretically, you’re not limited in how many you can buy. However, exchanges and brokers will often pose their own limits so research these before investing.
Can I buy Ethereum without an ID? If you buy Ethereum via cash in person or using decentralised exchange, you wouldn’t need an ID. But to sign up on exchanges and other payment methods, you’ll often need to complete a KYC check.
Can I buy Ethereum instantly? Yes, you can buy Ethereum instantly on several platforms. All you need to do is make the original purchase.
What is Ethereum?
Ethereum is a blockchain that launched in 2015 with its on token Ether (ETH). Since then, it’s become the main competitor to Bitcoin.
How does Ethereum work? Ethereum works the same way as any fiat currency would: you can use it to pay for goods and services.
What are the most trending tokens built on Ethereum blockchain?
Some of the biggest cryptocurrencies built on Ethereum blockchain in 2021 are BAT and Shiba Inu. If you want to buy some SHIB, read our guide on where to buy Shiba Inu.