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The Best Places to Buy Ethereum

The Best Places to Buy Ethereum

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What Are the Best Places to Buy Ethereum?

Finding the right platform is vital. When buying Ethereum, you will want to choose an exchange that offers safety, security and low fees.

Here are five platforms to consider:

1. eToro

Best All-Rounder

Advantages:

  • 0.1% crypto-crypto conversion fee
  • eToro’s CopyTrader feature allows you to copy the trading decisions of experienced crypto investors
  • Account verification: you will be asked to upload copies of proof of identity document and a proof of address document
  • Clean, easy-to-use interface
  • Funds can be deposited via bank deposit or wire transfer
  • Low fees are set out clearly, with no hidden charges
  • Offers a free demo account with $100,000 virtual money to practice your trading strategy
  • Offers fractional ETH purchases (you do not have to buy a whole ether)
  • Simple account opening process
  • Trade 24/7, 365 days

Disadvantages:

  • $5 withdrawal fee; minimum allowed withdrawal is $30
  • 1.90% fee when making a purchase
  • To purchase ETH, you will first need to deposit fiat funds into your account

Visit eToro

2. Coinbase

Best for Novice Traders

Advantages:

  • Excellent security features: includes two-factor authentication, ‘cold storage,’ FDIC insurance and the Coinbase vault for large balances
  • Very easy to use with a simple account setup process

Disadvantages:

  • Complex and expensive fee structure: buy and sell orders below $200 will incur a fixed fee, starting at $0.99 for orders below $10; for orders between $50 and $200, the fixed fee is $2.99; for orders over $200, a fixed percentage fee will be charged (fee dependent on your payment method)
  • Deposit and withdrawal fees are set according to your location: for US customers, deposits and withdrawals are free if you use ACH or Paypal (if you want to make a wire transfer deposit, the fee is $10; for a wire transfer withdrawal, the fee is $25)
  • Limited selection of cryptocurrencies: presently, under 20 coins are available

Visit Coinbase

3. Kraken

Low Fees for Professional Traders

Advantages:

  • Can be used to trade around 18 cryptocurrencies and six fiat currencies
  • Clean and simple interface
  • Customer support available 24/7, 365 days a year through LiveChat or via email
  • Fast transactions
  • Highly trusted
  • Low fees: any trade of less than 50,000 of a currency incur a sender fee of 0.16% and a receiver fee of 0.26%; for transactions over 50,000 of a currency, this fee is 0.4% for the sender and 0.24% for the receiver
  • Minimum order size of 0.005 ETH
  • Secure: uses state-of-the-art technology and processes to protect investor funds; most tokens are stored within an encrypted cold wallet

Disadvantages:

  • Limited payment methods
  • Unlikely to be a good option for novice traders

Visit Kraken

4. Gemini

Highly secure

Advantages:

  • Over 20 digital currencies available: this includes its own currency, Gemini Dollars (GUSD), a stablecoin backed by US dollars
  • Allows users to trade and store cryptocurrencies
  • Convenience fee of 0.5% higher than the market rate: to work this out, multiply the amount of currency you wish to buy by 0.50% (a flat transaction fee is charged for any orders placed through the web or mobile applications, ranging from $0.99 to $1.49). To use Gemini’s cold storage facility, a 0.40% charge is made for users with assets above $1million – you will also incur an administrative withdrawal fee of £125
  • FDIC protected
  • Flexa partnership allows you to spend your cryptocurrency at selected retailers
  • Gemini Earn allows you to earn interest on your cryptocurrencies
  • Industry-leading security features
  • Limited crypto-crypto funding options
  • Straightforward and easy to use
  • Use the Nifty Marketplace to buy and sell digital art and collectibles
  • Users must supply evidence of ID to set up an account: two-factor authentication is in place

Disadvantages:

  • Limited customer service: issues must be raised using a support ticket system, and responses can be slow
  • Your account can only be funded via a bank account: you cannot use a credit or debit card to fund your account

Visit Gemini

5. Bittrex

Best for Experienced Investors With Specialist Knowledge

Advantages:

  • Limited support options make this a better option for experienced traders
  • Low, fixed fees: flat 0.25% fee for every trade
  • Offers a high level of security: at least 80% of currency stored by Bittrex is kept offline, and the platform uses a two-factor authentication process
  • Over 190 cryptocurrencies to choose from
  • Quick exchange process: Bittrex uses an elastic computing system, meaning that trades are processed immediately
  • Users only need to give their name, address and date of birth to become verified

Disadvantages:

  • Traders should be cautious about brand new coins: these can be susceptible to ‘pump and dump’ scams, an issue for any platform offering newer coins

Visit Bittrex

What Is Ethereum?

Ethereum is a decentralized blockchain network. It is powered by its own individual programming language, Solidity.

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?

1. Set Up an Account With Your Chosen Exchange

You will need to provide personal details, including your name, email address, location and a secure password.

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.

2. Select an Account Type

Most exchanges offer personal and business accounts. Some also offer paid-for account types with additional features.

3. Set Up a Payment Method

Accepted payment methods vary between exchanges, with only a few willing to accept credit card payments.

Other acceptable methods include bank transfer and debit card payments.

Whichever payment method you choose, you will usually be asked to confirm your identity.

4. Purchase Ethereum

Follow the steps on the screen to make your purchase.

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.

5. Set Up a Cryptocurrency Wallet

If you want to withdraw currency, you will need to set up a cryptocurrency wallet. This will be allocated with two keys; one public and one private.

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.

Bitcoin ATMs

A Bitcoin ATM is an internet-enabled kiosk where you can buy bitcoins and other types of cryptocurrencies. Globally, there are over 14,000 bitcoin ATMs in use.

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.

What Are the Best Places To Buy Ethereum?
What Are the Best Places To Buy Ethereum?

Whilst P2P currency exchanges enable traders to buy cryptocurrency without interference from the government, and they can also make it easy for groups to conduct illegal money laundering activities.

How Do You Use Peer to Peer Ethereum Groups?

1. Register with a P2P currency exchange to set up an account. This will also generate a cryptocurrency wallet.

2. Browse the list of offers, filtering the options to suit your needs. You might wish to filter according to location or payment method.

3. Once you have found a suitable offer, choose how much ETH you wish to purchase.

4. 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.

5. After the seller has confirmed receipt of your payment, the cryptocurrency will be released from the escrow and sent to you.

6. 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.

What Are The Best Tips for Buying Ethereum?

Watch Out for Scams

As interest in cryptocurrency investment has risen, an increasing number of scams have appeared: these range from phishing, fake giveaways and false technical support.

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.

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