How to buy into ethereum

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Online stock brokers: Buying cryptocurrency from an online brokerage that offers it is one of the easiest ways, but it can come with serious drawbacks. While online brokers have made it easy and cheap to turn your cash into crypto and vice versa, check the fine print to see if the brokerage lets you move cryptocurrency in and out of the account — some brokers don't. In the eyes of crypto purists, this essentially nullifies the entire point of owning a digital currency.

Centralized crypto exchanges: These are a common way for people to buy cryptocurrency. Centralized exchanges such as Coinbase act as middlemen in the buying and selling of cryptocurrencies, and tend to have larger selections than platforms that primarily deal in conventional assets such as stock.

These can be a good choice if you're somewhat familiar with cryptocurrency, but are looking for a user-friendly experience. Some people, on the other hand, might feel that a centralized broker is contrary to the spirit of blockchain technology, which is supposed to be decentralized. Decentralized exchanges: In a sense, a decentralized exchange, or DEX is the truest way to trade cryptocurrencies in that there is no third party whatsoever. Centralized exchanges require you to deposit the coins or dollars you want to trade on the market into a trading account.

But with DEXs, you retain full control over your funds and trade directly with a buyer or seller. However, DEXs can be confusing to navigate and are mostly used for trading one cryptocurrency for another, rather than buying ETH with cash. Best cryptocurrency exchanges Decide how to pay Depending on whether you already own cryptocurrency and are willing to part with it, you can decide to either pay with U.

Fiat currency: Like most things in the world, you can buy cryptocurrency with traditional fiat currency such as U. On some exchanges, this is your only option. And if you don't already own cryptocurrency, you're going to have to use cash at some point. If you're using a centralized exchange, you will likely have to fund your account using a bank transfer, a credit card or a debit card, and these transactions can incur fees on some platforms.

Cryptocurrency: Some marketplaces allow crypto-to-crypto trading, which can be an advantage if you want to buy Ethereum without sinking more of your savings into the crypto space in general. This can also be a helpful strategy if you own another cryptocurrency, such as Bitcoin, that has increased in value and you want to diversify your holdings. Be aware, however, that the relative values of cryptocurrencies are constantly changing.

It can be a good idea to look at historic price trends as you decide when to buy. One more thing to keep in mind: Trading crypto is subject to certain tax rules. Store your Ethereum Even though Ethereum is a digital asset, you still need a way to securely store it. This is generally done through digital wallets, which store the private keys that you to access or spend your digital currencies. Some online marketplaces that sell Ethereum also will hold them for you. One thing to consider when choosing an exchange is how it handles storage.

Some allow you to use your own digital wallet to move currency to and from their platforms, while others are more limited. Rather, the host stores this information for you. One of the best places to start is the Find a Wallet feature on Ethereum. For beginners, it may be best to start with a crypto brokerage or stockbroker.

Then you could consider working your way up to the more advanced, decentralized platforms. Your decisions may also be informed by whether you view Ethereum as a long-term investment, a short-term buy, or a speculative bet on a volatile asset.

So what can you do on the Ethereum blockchain? Examples of dapps include: Direct peer lending that earns interest. Insurance without the insurance company. Payments without the payment processing company. Cryptocurrency trading — this is a popular way of investing in Ethereum. The premise is to buy low and sell high to make a profit. Risks of investing in Ethereum Despite all the upsides to investing in Ethereum mentioned above, there are serious risks to be factored in when making the leap into the ecosystem.

Some of the main ones include: Volatile prices — cryptocurrency prices are notorious for experiencing wild swings. Remember never to invest more than you can afford to lose. Theft — billions of dollars in cryptocurrency have been stolen over the years both from individuals and institutions.

To protect yourself from these prevalent hacks, you need to observe strict security measures and avoid storing your Ethereum in exchanges. A bulk of these projects were created on the Ethereum blockchain. Unfortunately, a majority of the investors lost their money when the scammers made away with their investments.

These are not the only risks worth noting when investing in Ethereum, and depending on your chosen investment method, there are other unique risks that you will face. Do your own research DYOR and invest wisely. How to buy Ethereum in 6 steps There are several ways to buy Ethereum , depending on your preferences and geographical location.

Here are the six quick steps to getting your hands on some ETH: Step 1. Choose a payment method This is an important step that will affect how you proceed going forward. Your payment method will dictate which platform to use. The five popular payment methods available are: Paying with cash; Paying with either a debit or credit card; Paying with PayPal or other online payment processors ; Paying using a bank account through wire transfer or cheque; Paying with another cryptocurrency such as bitcoin i.

Once you have chosen a payment method, you can then move on to the next step. Step 2. Depending on your chosen payment method, you may avoid using an exchange altogether. However, the higher fees will apply compared to other more popular buying options. If you have to use a trading platform or just a crypto brokerage service to buy Ethereum, here are the two types of platforms you will deal with: Centralized exchanges — These are trading platforms controlled or run by a single entity.

We will review some of the best-centralized cryptocurrency exchange platforms in the market later in this article. Decentralized exchanges — These platforms are not run by a single entity but instead employ smart contracts to facilitate trades between users. Several of them are hosted on the Ethereum network, making it even easier and faster to buy or exchange your coins for some Ethereum.

Step 3. Create an account Opening an account in a centralized exchange is pretty standard and similar across all platforms. It entails the following steps: Sign up for an exchange account by submitting your name and email address; Verify email and phone number; Provide personal information; Identity verification or KYC know your customer procedures; Set up a payment method such as linking a bank account or debit card.

The process is a lot simpler when using a decentralized exchange DEX. Step 4. Deposit funds to your account Once you have your account up and running, the next step is to fund the account. If your chosen payment method is a debit card or bank account, you will be required to transfer some funds to your exchange account to buy ether. Step 5. Buy Ethereum Once the funds have been deposited in your trading platform account, go ahead and buy ETH. It is that simple.

Step 6. Store your Ethereum This is the last step in the process, but it is probably the most important. Keeping your coins secure is often neglected by most investors at their peril. After buying your ETH coins, move them to a wallet whose keys you control. Your coins are not safe on an exchange. Even with self custody, you will need to exercise extreme security measures to ensure that your coins remain yours. In an upcoming section, we will look at some of the best Ethereum wallets to store your coins.

However, it is safe to avoid most market platforms as they lack the liquidity to support large purchases. Other platforms have lackluster security measures. In this section, we will highlight three of the best-centralized cryptocurrency exchanges. These are some of the most trusted and reliable platforms you can use to purchase ether. Binance Binance is the largest cryptocurrency exchange in terms of trade volume. It launched in , quickly becoming the fastest-growing crypto platform.

Binance got so popular that it suspended new registrations at one time in due to an influx in new signups. It was initially based in China, but due to regulatory limitations, the exchange moved to Japan briefly then ended up in Malta. It was hosted on the Ethereum blockchain as an ERC token at the time, but it has since been migrated to the Binance blockchain. The exchange boasts one of the broadest asset support of any crypto exchange currently, with over assets and more than trading pairs.

Expectedly, ETH is a significant trading asset on the platform. Initially, Binance launched as a purely crypto-to-crypto trading platform. However, it has introduced various payment methods with its expansion, allowing users to purchase crypto directly using debit and credit cards, among other gateways. Fees Binance trading fees are among the cheapest in the cryptocurrency market. These are 0. Buy Ethereum on Binance Coinbase Coinbase is one of the oldest cryptocurrency exchanges in the market today.

It was established in in the United States. It is fully regulated to operate in over 40 US states and supports users from over countries. Coinbase exists in two versions: a standard user interface called Coinbase and a professional-focused interface called Coinbase Pro formerly GDAX. The latter is more advanced, offering more features and better transaction fee rates.

Coinbase now offers more services, including brokerage, staking, and crypto custody for institutional customers. You can also access the exchange through a mobile app that also doubles as a mobile wallet. Supported payment methods Depending on where you live, Coinbase has the following available payment methods: US Residents — in the US, customers have the option to fund their Coinbase account through bank transfer ACH , wire transfer debit card, and PayPal.

For large investments, customers can only use bank and wire transfers. Debit cards support only small purchases. Of these payment options, only the 3D Secure Cards method allows for crypto purchases. Their options vary between using 3D Secure cards for direct purchases and using PayPal for withdrawals.

They can only exchange or convert their current assets. The exchange was founded in by crypto enthusiast Jesse Powell and launched in , following two years of active development. The exchange initially launched as a brokerage and trading platform but over the years has morphed to offer more products, including a cryptocurrency staking pool and automated trading software.

The latter is called Cryptowatch and is used to automate trades on up to 25 other crypto exchanges through APIs. Spot trading is the immediate settlement of trades at the prevailing market prices. On the other hand, margin trading is the use of leverage to amplify trading positions, thereby amplifying potential profits or losses.

Futures trading is the deferred settlement of trades through agreements or contracts between buyers and sellers of assets. Finally, OTC trades are direct trades between buyers and sellers. Usually, OTC trades are large order sizes with the potential to affect prices if they are posted to the exchange order book.

Supported payment methods There are two main ways to fund your Kraken account — crypto or fiat currencies. Kraken Fees Kraken offers low and competitive fees across its products. Trading fees range between 0. Makers create liquidity by posting trades to the order book, while takers take away liquidity by fulfilling the orders within the order book.

Fees for stablecoin and FX pair trades range between 0.