How to Buy and Invest in Ethereum Cryptocurrency – MUO – MakeUseOf
It’s the second-largest crypto after Bitcoin, and it has incredible functionality. So, here’s how you buy it.
With a market cap exceeding $220 billion at the time of writing, Ethereum is the second-largest cryptocurrency in the world. Millions of people own Ether, and many more are interested in purchasing it. But, how do you buy Ethereum for yourself?
Ethereum itself isn't actually a cryptocurrency. Rather, Ethereum is the name given to the open-source blockchain, with Ether serving as a native cryptocurrency on the network. While this is the case, Ether and Ethereum are synonymous and are often used interchangeably.
The Ether cryptocurrency is second only to Bitcoin, seeing great success since its release in 2014. The ICO (initial coin offering) for ETH valued a single Ether token at $0.31 US, but this has risen to more than $4,000 at its peak. Very few cryptocurrencies have generated enough public confidence to raise their value like this.
Seeing the value of Ethereum tokens skyrocket over a few short years makes this cryptocurrency look like a promising option for investors. In reality, though, putting money into cryptocurrencies like this is risky, which can be seen when you look deeper into Ether's history.
While a value of $1,800 US per token is very high, it isn't Ethereum's peak. Back in November 2021, Ether peaked at around $4,400, but its value dropped dramatically in the weeks and months that followed. This means that anyone who invested in Ether between 2020 and 2021 stood to lose a lot of money if they didn't sell at the right time.
A lot of investments come with risks like this, but cryptocurrencies are uniquely volatile. It only takes one tweet from a meme-obsessed billionaire to send the value of crypto rising or tumbling, and this is just one example of the external factors that influence currencies like Ether. You don't have to ignore the crypto space altogether to avoid risks like these; you have to spend some time learning about cryptocurrencies before you commit your money.
Like any currency, you can buy Ethereum via several options. You can organize private purchases of cryptocurrencies, but this can open the doors to many risks while also making it harder to monitor the crypto market you buy into. It usually makes more sense to buy Ethereum from a crypto marketplace. This will enable you to learn more about the currencies you buy while also providing a layer of security that isn't found in private sales.
There are a lot of excellent Ethereum exchanges available online. You just need to find one with the right features for you. Coinbase, BlockFi, and Binance are just three examples of Ethereum exchanges that have built a good reputation in recent years. Each of these platforms is beginner-friendly, making it ideal for your first venture into the world of crypto. You should explore the exchanges available in your country before picking the one that you want to use.
One of the key benefits of an Ethereum exchange platform is the ability to experience demonstrations. Many of the largest cryptocurrency exchanges offer free demo accounts that are loaded with virtual assets, providing the opportunity to learn how they work without putting your money on the line. eToro offers a $100k demonstration account to its users and this is what we will be using for the rest of the article.
At this point, you may be asking "How do I buy Ethereum?", and we have the answer for you. Following the steps below will help you to buy your Ether on eToro (though the process is similar on most sites), store it securely, and figure out how to make the most of it using the platform you have chosen.
The first step in this process is creating a purchase account on the platform you plan to use. This is nice and easy; you just need to pick a website, hit the sign-up button, and provide all the information they ask for. Some platforms ask questions specifically to gauge how experienced you are with investment. Don't worry about getting these questions wrong, as they don't impact your ability to buy Ethereum.
Once you have an account set up, it's time to add some regular currency funds to your account. All Ethereum marketplaces force you to do this before you can trade as a way to authenticate your funds and comply with anti-money laundering laws (and you cannot buy Ethereum without real money!). As long as you choose a trusted website for this, you will have no problems accessing your funds for the next steps.
Every Ethereum marketplace has its own process for buying currency, but they usually give you similar options. eToro has been designed to simplify this process: head to the ETH information page, click Trade, and choose the amount of Ether you'd like to buy. You will have the option to Trade or Order when you are making your ETH purchase.
We bought $5,000 worth of ETH with our eToro demo account, giving us the equivalent of 2.54 Ether. You can see how well your investment is doing in real-time when you buy crypto assets like this, and most platforms offer the same options to help you to assess your investments. In this example, we bought our ETH at the wrong time and started losing money straight away!
Some people will choose to sell their Ethereum very quickly, while others will want to hold onto it. Most ETH exchanges will allow you to withdraw your currency to an external wallet under your own control. This can come with many benefits, but the main reason is to keep your Ethereum safe. Using a hardware crypto wallet with very limited internet connectivity is the best way to keep a cryptocurrency secure.
Find your Ethereum address for the wallet you want to send Ether too. It'll look similar to this: 0x1e248170bc259319bd3621871830c253ef88e18d—a 64-character hexadecimal string. Copy the address for the account you want to send to, paste it into the cryptocurrency exchange, and press send.
No one wants to spend their life monitoring the value of their crypto assets to make a good return. Thankfully, modering trading platforms like Coinbase and eToro do this work for you. You can set up alerts that tell you when prices go up or down, enabling you to get the best sale price when you decide to move to another investment. Knowing the right time to buy and sell has always been the key to success with investments like this.
Setting alerts and tracking prices is a key part of developing and sticking to a crypto trading plan.
As we touched on earlier, buying crypto is risky compared to many investments. This risk can translate to tremendous rewards when you play your cards right, and Ethereum still has plenty of room to grow. Of course, though, you must understand crypto assets and the market they belong to before you decide to put your money into an investment like this.
Samuel is a UK-based technology writer with a passion for all things DIY. Having started businesses in the fields of web development and 3D printing, along with working as a writer for many years, Samuel offers a unique insight into the world of technology. Focusing mainly on DIY tech projects, he loves nothing more than sharing fun and exciting ideas that you can try at home. Outside of work, Samuel can usually be found cycling, playing PC video games, or desperately attempting to communicate with his pet crab.
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