How to Buy and Sell Ethereum: A Guide For Starting Out
If you’re looking for a starter guide on how to buy and sell Ethereum then we have the information to help you get started. We’ll cover the basics from choosing a trading platform to different ways of buying and selling Ethereum. So without further ado, let’s get started.
Choose A Trading Platform
Cryptocurrency trading platforms are the only way you can buy cryptocurrency from a bank or an online brokerage like Fidelity or Vanguard. Traders can choose from simple interfaces for beginners to more complex ones for more experienced users.
Since Ethereum is so popular, you can buy it on nearly all cryptocurrency exchanges. However, we recommend using Coinbase, Gemini, or eToro because of their popularity. On platforms like Venmo and PayPal, Ethereum is one of the few types of cryptocurrency that can be purchased. It’s a good idea to do some research before signing up with a platform because each one has its own set of fees, security measures, and additional features.
Before making any trades, it’s critical to figure out which trading platform is best for your specific situation. Cryptocurrency exchanges like Coinbase, Kraken, Bitstamp, Gemini, Binance, and Bitfinex are just a few of the top choices. Ethereum is available on each of these marketplaces.
Choosing a cryptocurrency trading platform is one of the most important decisions you can make. Cryptocurrency-to-cryptocurrency (C2C) exchanges and fiat exchanges are two types of cryptocurrency trading platforms. Investors can easily trade Ethereum on fiat exchanges because it is one of the world’s most popular cryptocurrencies.
C2C exchanges may be of interest to investors who want to trade multiple currencies or have the ability to easily convert other currencies into Ethereum. It is not uncommon for an investor to hold multiple crypto-to-currency accounts.
Keep in mind that cryptocurrencies are unregulated and constantly evolving. If you’re going to take advantage of this opportunity, you’ll need to be sure that the trading platform exchange you choose is trustworthy.
How to Choose a Platform
Do Your Research
Reputation is important when it comes to digital currencies and exchanges. Consider thoroughly researching the exchange before creating an account (which should reflect a high level of trust, as it requires the transmission of private information). What are the opinions of other users?
What can we infer about the parties involved from their interactions? Is there a history of problems with the site’s security? Is that correct, and if so, what impact did that exchange have on solving those issues? In your search, look for stories that the exchange’s development team would prefer not to be public.
Take Things Slowly and Carefully
Investing in cryptocurrencies is fraught with risk, and it is important to remember that there are people out there trying to take advantage of unsuspecting investors by running scams and defrauding them. One of the first and most popular digital currency exchanges, Mt. Gox, has collapsed. Others have been compromised in some way, whether through hacking or otherwise.
How can you tell if a cryptocurrency exchange is providing a trustworthy service?
The first step is to locate the exchange’s physical location. You should not use the exchange if you do not have an address readily available. Because of this, there are numerous reasons. First and foremost, openness is a sign of trustworthiness.
It’s also important to know where an exchange is based to understand the legal ramifications of your investments, which can be thorny. Third, if your account is compromised, contacting the exchange and any relevant regulators is much simpler if you have the exchange’s physical address.
Check Out The Fees and Hidden Costs
When it comes to finding trustworthy cryptocurrency exchanges, you’ve narrowed the field and found some that appear to be safe and secure. As a first step, think about how each exchange will affect your daily investing.
Fees and currency pairs are two of the most important distinguishing characteristics of different exchanges. Most exchanges charge some sort of transaction fee, which can be based on the size of the transaction, the amount of activity you’ve had, or a combination of these factors.
Examine how your investing style, such as whether or not you plan to be very active and make some transactions every day, will be impacted by the fees. If this is the case, you might want to look into an exchange with a lower transaction fee. The hidden fees associated with various transaction types should be taken into consideration if you plan to use ether.
Another factor to consider is the number of cryptocurrency pairs available on your exchange. Despite its enormous popularity and success, Coinbase only offers a small number of digital currencies to its customers. Even though Coinbase is regarded as excellent in terms of security, user experience, and so on, you may want to look elsewhere if you’re looking for obscure altcoins to trade. Take into account your investment practices and their compatibility with any exchanges you may use.
Take Note of Their Security
The more difficult it is to open an account at a given exchange, the better. An exchange may not be trustworthy if it’s too simple to create an account. So, what happens if you lose all of your digital assets overnight? Finding and getting your money can be a lot more difficult in those situations.
You should always keep the majority of your digital assets in an offline storage service like a cold wallet, even if you use an exchange that allows you to stake your coins. With assets that aren’t needed for liquidity, exchanges should do the same.
Trading Platforms We Recommend
Binance, a cryptocurrency exchange that was established in 2017, specializes in trading altcoins. However, Binance was delisted in the United States in 2019. As of November 2021, Binance is the world’s largest cryptocurrency exchange, accounting for a sizable portion of the daily trading volume.
However, you can use a credit or debit card to purchase a limited number of cryptocurrencies directly through the exchange, which only accepts deposits in US dollars made through SWIFT (the Society for Worldwide Interbank Financial Telecommunications). To make deposits, you can use the Euro as well as 12 other fiat currencies.
Trade or investment in less-known altcoins can be done on Binance. If you’re looking for an exchange that offers more advanced charting than most others, Binance is a good choice. When you take into account the low monthly fees, the tools, charts, and data that come with your account are truly impressive.
Apps like Cash App allow people to send money to each other. Pay rent, buy groceries, or shop online at retailers that accept Cash App with this service. It’s possible to use Cash App like a bank account, and users can even get their debit cards for it.
App users can invest in stocks, exchange-traded funds (ETFs), and virtual currency Bitcoin. This exchange’s mobile-first interface is simple to learn and use, making it ideal for first-time investors.
There is a basic cryptocurrency investment feature, as well as money transfer functionality. The main reason we chose Square’s Cash App over Robinhood as the best option for beginners looking to buy Bitcoin is that Cash App allows users to withdraw cryptocurrency investments to their wallets.
The ability to withdraw cryptocurrency from an exchange is critical in the cryptocurrency community. There are no withdrawals or spending options available with Robinhood when it comes to cryptocurrency.
Another drawback is that you no longer have access to the private keys. When it comes to cryptocurrency, many people refer to this idea as “keys, not coins.” As a result, any coins you hold in a wallet that you do not have the private keys to are effectively not yours.
Coinbase has remained largely unscathed by the shady exchanges and fraudulent coins that have plagued the cryptocurrency industry. To make cryptocurrency investment more accessible, Coinbase has created an extremely user-friendly exchange platform.
Investors and traders can also store their assets in Coinbase’s custodial wallets, which are protected by insurance. The Federal Deposit Insurance Corporation (FDIC)-insured bank accounts where your money is held are important because users have reported their accounts being hacked and their funds being drained. Coinbase’s custodial accounts are a great way for new users to get their feet wet, but the private keys to the investor’s coins belong to Coinbase, not the custodian.
The Coinbase Pro version, which has the same fee structure but significantly more charting and indicator options, is also available through the Coinbase website. If you’ve used Coinbase before, Coinbase Pro is a logical next step because it adds features that more experienced users will appreciate.
Create An Account
The next step is to open an account on the trading platform you’ve chosen to meet your needs. Creating an account on a brokerage platform is a lot like this process. To apply, you will need to provide personal information such as your name, address, social security number, and more. Account opening is usually a breeze once you’ve established trust in a site.
The final step in the account opening process is to verify the account. You’ll be required to verify your account in some way or another by the majority of exchanges. Typically, this is where you’ll need to upload documents to verify your identity and ensure that your account passes regulatory muster. Depending on the exchange, verification can take anywhere from a few minutes to a few days.
It is possible to link your bank account or debit card so that you can deposit funds. The methods you choose may result in different fees. As with any investment account, you don’t want to leave your uninvested money in your account, and this is especially true for Ethereum. If you want to invest, you’ll need to buy Ethereum.
Buy and Sell Ethereum
The next step is to make a currency deposit into your account. Following the verification of your payment details on a fiat currency platform, this process can be a simple one. Using your bank account or debit card on file, you can easily add funds to your account.
You can invest as little as $5 or as much as $1,000 or more on cryptocurrency exchanges, which don’t typically have high minimums. Because of the fees associated with individual trades on most exchanges, trading large sums is preferable.
In C2C exchanges, depositing currency can be a little more difficult. Sending cryptocurrency via code is required on these exchanges. Many C2C platforms accept Ethereum as a form of deposit, so holding a large amount of the currency can be advantageous. Typically, code transfers take up to an hour to complete.
You’ll be able to buy and sell Ethereum with your US dollars once your account has been funded. Enter the amount of US dollars that you wish to exchange for Ethereum. Depending on the price of Ethereum and how much you want to buy, you may be purchasing shares in a single Ethereum coin. The amount you pay will be displayed as a percentage of the total amount of ether coins available for purchase.
Selling Peer to Peer
Peer-to-peer (P2P) transactions are also available if you prefer to sell your ETH directly to a third party rather than through an exchange. P2P crypto platforms are essentially marketplaces where users can place and respond to offers. Typically, these platforms allow sellers to list their desired price and payment method for specific crypto assets.
In general, the escrow features on these platforms help to ensure a smoother transaction with minimal risk. During a multi-party transaction, an escrow locks up funds in a neutral location, typically via a smart contract, to protect the interests of all parties. The funds can then be accessed once all of the parties involved have fulfilled their obligations and the assets have been distributed accordingly. ETH can be sold to a friend or family member in person if the owner wishes to do so.
Always check and adhere to local rules and regulations when using any method. In addition, you should use caution when transacting money with others, whether it’s over the internet or in person. The ability to conduct in-person and online crypto transactions requires familiarity with crypto wallets and platforms as well as an understanding of how crypto transactions work.
Store your Ethereum in a Wallet
It’s easiest to leave your investment in your exchange account if you only have a small amount of crypto. However, if you want to store your money in a more secure location, a digital wallet may be a better option.
ETH can be transferred from your exchange account to a bank account or a wallet under your control once purchased. Fiat exchanges make it simple to withdraw ETH by selling and depositing the money in your bank account. C2C platforms require more time to set up.
To cash out on a C2C platform, you would need to code transfer your ETH to fiat exchange and then sell it on an exchange to do so. Sending ETH to a wallet is a common feature across all platforms so it shouldn’t be a big issue.
To conclude, the steps in buying and selling Ethereum are simple and made easy thanks to crypto exchange platforms. But if you want to know how to buy and sell Ethereum efficiently, then the best teacher for that would be experiencing. We advise that you buy and sell carefully and make calculated risks since trading is all about minimizing risks and maximizing profit after all.
* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.