How to Invest Ethereum? An Easy-to-Follow Guide

Are you curious about how to invest in Ethereum? The process is very simple but it can get very tricky. This article has everything that you will ever need to know about investing in Ethereum as well as the associated risks that come with it. 

What is Ethereum?

Because of its role in the creation of NFTs, you may have heard of Ethereum There are several reasons why you might want to get involved with the second-most popular cryptocurrency. Or perhaps you’ve taken note of the numerous new record highs it’s recently achieved.

For beginners, Ethereum is one of two cryptocurrencies (the other being Bitcoin) that experts recommend sticking to because it’s more established than lesser-known cryptocurrencies. When it comes to cryptocurrency, there are a few things to keep in mind before deciding whether or not it’s right for you to invest in it.

Is it Worth Investing In?

It’s critical to know exactly what you’re investing in before you start buying coins. As a store of value, Ethereum’s price history supports its potential, but there is also a lot of interesting innovation taking place with Ethereum that highlights the coin’s usefulness.

Decentralized applications (DApps) can be built on top of the Ethereum blockchain ). Ethereum’s token, ether, must be purchased by developers to use the network (ETH). Ethereum is the currency of choice for those who want to interact with a decentralized application.

It’s possible to invest in ether, like Bitcoin, and hold it for the long term, hoping that its value will continue to rise over time. Ether’s value is likely to fluctuate a lot in the short term, as with any other cryptocurrency investment. 

Investors are advised to keep cryptocurrency investments to less than 5% of their overall portfolio and only invest what they’re willing to lose because of this volatility.

In 2021, Ethereum had multiple new all-time highs, the most recent of which was $4,800 in November. Prices have ranged from around $1,000 to $4,800 per coin in the last year. 

Since its most recent all-time high last year, Ethereum’s price has dipped slightly, but it is still significantly higher than the $1,000 range at this time last year.

Ethereum’s value fluctuates a lot like other cryptocurrencies. Cryptocurrency investments should be prepared for price volatility. If short-term price fluctuations bother you, you may want to rethink your cryptocurrency investment strategy.

Ethereum, like any other cryptocurrency, only has value because people believe it does. Because it’s not linked to any commodity or currency, the price of bitcoin is subject to wild fluctuations due to things like media attention or proposed regulatory changes for the cryptocurrency industry.

How To Invest in Ethereum

Find a Trading Platform

It is critical to select the best trading platform for your needs before making any trades. 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.

The type of exchange is an important factor to consider when selecting a cryptocurrency trading platform. Trading platforms for cryptocurrencies can either be fiat exchanges or cryptocurrency to cryptocurrency exchanges (C2C). 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. In addition, many investors have multiple accounts with both a fiat exchange and a C2C exchange, as well. 

Keep in mind that cryptocurrencies are constantly evolving and that they are unregulated. 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.

If you’re a complete novice, you can always turn to a service like Robinhood or Cash App. You’ll save a lot of time if you use this service, but it comes at a price which is that you can’t withdraw your Ethereum investment to pay for online transactions or move it to a third-party wallet.

If you buy your cryptocurrency on one of these streamlined platforms, it will only be able to be traded on that platform’s exchange. In order to keep the cryptocurrency in a different wallet, you’d have to sell it on that platform and then repurchase it on a cryptocurrency exchange.

Create an Account and Deposit Your Money

Cryptocurrency exchanges may require you to provide personal information and verify your identity before you can open an account. It is possible to link your bank account or debit card so that you can deposit funds. Depending on which method you select, you can expect to pay slightly 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.

Trade for Ethereum

The first step in purchasing Ethereum on a cryptocurrency exchange is to fund your account first. Most of the time, you’ll use a bank account like your own checking or savings to make a deposit. Wire transfers, debit card payments, and PayPal deposits are all options.

Make sure to check the crypto exchange’s fees before deciding on a method of payment; they can vary depending on the method. Gemini charges a 3.49 percent fee for debit card transfers, whereas wire transfers are free on the platform.

You’ll be able to buy Ethereum with your US dollars once your account has been funded. To exchange USD for ETH, simply enter the desired amount into the appropriate field. Depending on the price of Ethereum and how much you want to buy, you will most likely be purchasing a single Ethereum coin. 

You’ll be able to see how much you’ve spent as a percentage of the total ether coin you’ve purchased.

Buying cryptocurrency with a credit card is possible on some platforms. Credit card companies typically classify cryptocurrency purchases as cash advances, even if they appear to be enticing. In addition to the crypto exchange fees, you may have to pay a higher interest rate and cash advance fee depending on your credit card.

Store it in a Wallet

ETH can be transferred to your bank account or a wallet of your choice once you’ve purchased it on the exchange. With fiat exchanges, it’s simple to withdraw ETH by simply selling and sending the money to your bank account. 

C2C platforms take more time to implement than other platforms. In order to cash out on a C2C platform, you would need to code transfer your ETH to a fiat exchange and then sell it on an exchange to do so. Sending ETH to a wallet is a common feature across all platforms and it’s recommended that you do so if you want to keep your money ETH safe.

Conclusion

Investing in Ethereum is simple and easy. All you need is an exchange platform and you can get Ethereum from there. The complicated part is choosing the platforms as well as choosing methods that help minimize your overall fees. We recommend starting out with beginner-friendly platforms first like Robinhood before you start experimenting. 

* 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.