Here are five platforms to consider: Cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply. 80.2% of retail investor accounts lose money when trading CFDs with this provider. After you make a crypto purchase, BTC will be added to your portfolio. Limited time offer. Offer available to new users only. Offer not available to new users who were referred to Coinbase through the Referral Program or who have previously opened an account using different contact information. Coinbase may update the conditions for eligibility at any time.
The cryptocurrency associated with Ethereum is Ether (ETH), although the terms Ethereum and Ether can be used interchangeably. First launched in 2015, Ethereum has exceeded the market cap of every other cryptocurrency, apart from bitcoin. By the beginning of 2017, the value of 1 ETH was less than $10. Since then, Ethereum’s value has increased steadily. At one stage, the value of 1 ETH rose higher than $400. Ethereum is the second most popular cryptocurrency on the market. If you want to invest in cryptocurrency, there are many advantages to choosing Ethereum.
What Are the Advantages of Choosing Ethereum?
Volatility
In the past, volatility was viewed negatively. However, smart investors have learned how to track the market and capitalize on exponential increases brought on by bubbles in the market.
Liquidity
Thanks to global trading platforms, online brokerages and exchanges, Ethereum is considered to be one of the most liquid investment assets. It is easy to exchange for cash or other assets, such as gold. Fees are very low; therefore, the high level of liquidity makes this an excellent investment option if you want to gain short-term profits.
Market Demand
Although ETH is considered a good short-term investment option, the high level of market demand means it could also be an effective long-term option too.
Reduced Risk of Inflation
World currencies are subject to regulation by their governments. ETH offers a transparent plan for inflation that is less likely to be interfered with.
Age
ETH is considered to be a ‘young’ cryptocurrency. This could result in unexpected changes in its price and volatility, meaning it has the potential for significant gains. In summary, ETH can easily be traded or exchanged for other cryptocurrencies. It is becoming increasingly popular with retailers and allows users access to many different decentralized applications (known as dApps) and other smart contract platforms.
What Are the Methods of Buying Ethereum?
If you want to invest in ETH, you will need to use one of the following methods:
Cryptocurrency Exchange
The simplest way to invest in Ethereum is through the use of an online cryptocurrency exchange. This method is accessible and easy to use while offering a high level of security. Cryptocurrencies have become increasingly popular in recent years, so there are many cryptocurrency exchanges to choose from. Although they all allow you to buy and sell cryptocurrencies, each exchange is slightly different. Choosing the right exchange for your circumstances is important. As a novice trader, you will need to find an exchange with good support and educational resources. You will also need to consider fees, payment options and which cryptocurrencies are available to buy.
How Do You Set Up Cryptocurrency Exchange?
Following sign-up, you will need to verify your email address. You may also be asked to verify your phone number. Before setting up an account, consider the financial risks involved in trading cryptocurrency. Other acceptable methods include bank transfer and debit card payments. Whichever payment method you choose, you will usually be asked to confirm your identity. You will need to input the amount of Ethereum you wish to buy, checking that you are happy with the associated fees before finalizing your purchase. You can share your public key with anyone, but your private key must be kept confidential. After you have set up your cryptocurrency wallet, you will be able to access it via your computer, tablet or mobile phone. It is also possible to set up a web-based cryptocurrency wallet, which means you will not need to download anything. You can withdraw ETH into your cryptocurrency wallet using a QR code. Remember that the exchange you purchased the ETH from could be hacked at any time; therefore, it is safer to move your currency into your cryptocurrency wallet. Although it is referred to as an ‘ATM’, a Bitcoin ATM is different from a standard ATM (automated teller machine), which enables you to deposit, withdraw and transfer funds from your bank account. Instead, a Bitcoin ATM sends cryptocurrencies to your digital wallet using blockchain technology. This is often achieved through the use of QR codes. The process involves scanning a QR code that is linked to your bitcoin wallet. If you do not have a wallet, you can set one up using the Bitcoin ATM. A few minutes after depositing cash and completing the transaction, the bitcoin funds will show in your digital wallet. Each Bitcoin ATM has an upper and lower limit for cash deposits. In the US, every bitcoin ATM operator is required to register with FinCEN (the Financial Crimes Enforcement Network) and must agree to comply with the anti-money laundering provisions set out by the Bank Secrecy Act (BSA). In some cases, you will need to verify your purchase using a code sent to your mobile phone. Alternatively, you may need to provide a scanned copy of an accepted identification document. Fees are incurred for using a bitcoin ATM. These are usually worked out as a percentage of the transaction. Bitcoin ATM fees are often high, and the exchange rates tend to be less competitive than you could find elsewhere.
Peer to Peer Ethereum Groups
Peer to Peer (P2P) Ethereum Groups facilitate the direct exchange of Ethereum. They are sometimes referred to as decentralized exchanges (DEX). Buying Ethereum in this way means there is no requirement for a central authority. Using this type of exchange can provide better privacy levels than other online transactions. It relies on encryption and blockchain technology and enables two people to complete a transaction without having to involve a trusted third party. In general, people choosing to buy Ethereum through a P2P transaction should not need to provide evidence of identification. This helps to protect the privacy of both parties. Many P2P exchanges support cash purchases and other exchange methods that help to promote privacy. Some exchanges accept payment via Paypal and digital gift cards. That said, not every P2P cryptocurrency exchange is entirely P2P. Many are restricted by the regulations laid out by the countries that the participants reside in, meaning that the associated governments expect exchanges to gather information on user identities and transactions.
How Do You Use Peer to Peer Ethereum Groups?
- Register with a P2P currency exchange to set up an account. This will also generate a cryptocurrency wallet.
- Browse the list of offers, filtering the options to suit your needs. You might wish to filter according to location or payment method.
- Once you have found a suitable offer, choose how much ETH you wish to purchase.
- Make the offer. Once the seller has moved the cryptocurrency into an escrow account, you will need to transfer money to them using the payment method previously agreed. When the seller moves the cryptocurrency, it goes into a smart contract on the blockchain. This is set up to only be released after the seller confirms receipt of your payment.
- After the seller has confirmed receipt of your payment, the cryptocurrency will be released from the escrow and sent to you.
- P2P exchanges have dispute resolution procedures in place to resolve any disagreements.
Things to Consider When Buying Ethereum
With so many options available, it is important to find the right trading platform for your needs. When choosing a platform, consider how easy it is to use and whether a demo account is available. You should also look at whether it is possible to use the account to access other trading options. Find out the fee structure and ensure you are happy with any fees charged by your chosen platform before signing up. To protect your investment, you should avoid taking information at face value and always carry out thorough research before agreeing to a financial transaction. If something seems too good to be true, it probably is.
Avoid Over-Investing
As with any type of financial investment, you should only ever invest money that you can afford to lose. Set appropriate limits to ensure you do not end up losing more money than you intended.
Make Use of Demo Accounts
If your chosen trading platform offers a free demo account, you should take full advantage. A demo account can be used to become familiar with the platform, practice your trading strategy and learn more about your investment style.
Final Thoughts
You can buy Ethereum through a cryptocurrency exchange, Bitcoin ATM or P2P group. As with any financial investment, buying ETH requires caution. As cryptocurrency continues to gain popularity, more ways to buy ETH will be introduced. When choosing an exchange, consider whether it is available in your country of residence and whether it supports your preferred payment method. Before deciding on a purchase method, consider how you wish to operate within the market. Think about whether you intend to speculate, gamble or invest. If you are new to cryptocurrency trading, it may be best to register with a brokerage service. Experienced traders may prefer to save money on fees by using a trading platform. WikiJob does not provide tax, investment or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.
