Heard about Ethereum and want to get involved?
We can’t blame you! Ethereum is a massive part of the cryptocurrency world. As it currently stands, Ethereum is the second-largest cryptocurrency in the world by market cap.
Ethereum is absolutely pivotal in the NFT and Defi space – two of the largest divisions of crypto. Not only that but it’s been setting multiple all-time highs in recent times and is destined to be a vital part of crypto’s future.
Strong Investment
No matter what brings you here, Ethereum is one of the “safer” crypto investments. Investing experts will recommend Ethereum and Bitcoin as two of the safest crypto investments you can make. Neither Bitcoin nor Ethereum is going anywhere any time soon! While Bitcoin is likened to digital gold, Ethereum is more functional and active, because it is used to create various usable applications on a blockchain (for example, a website or application where you can stake your tokens to earn more, as you would with a traditional bank account).
So, if you are sold on the idea of acquiring some crypto and think Ethereum is a good first coin, let’s look at how to buy Ethereum!
Safety warning: although we’re pro-crypto, financial advisors will recommend that you keep a low amount of crypto in your portfolio. It’s far more volatile than other investment vehicles, which cannot be denied. We enjoy the volatility as where there can be heavy losses there can be heavy gains! But the choice is yours, and make sure to do your own research!
What Exactly is Ethereum?
Let’s have a quick look at what Ethereum actually is.
The Ethereum blockchain allows developers to build applications on it. Specifically, decentralized applications (DApps). DApps are applications that work without a third party managing them. They operate on an “if X happens then take Y action” mechanism. A smart contract, a type of code, are what allows these mechanisms to work.
For example, one could deploy an Ethereum staking application. Users can connect their wallet to the DApp, and then stake (and earn interest) on their Ether through this application.
The application will always work regardless of a third party being present. Plenty of cryptos operate around this principle of decentralization. The idea is to remove corruptible, centralized power.
If you’re scratching your head already – a DApp acts just like a website really – but you can connect your crypto wallet to it and interact with these smart contracts. It sounds more complicated than it actually is for the average investor.
What Is Ether?
In order to interact with the Ethereum network, its applications, tools, and so on – everyone must use the native token: Ether (or “Eth). Developers will pay in Eth to deploy their applications and users will pay in Eth to interact with applications.
For example, if I wanted to send one Ether to a friend, I would be charged a sending fee in Ether. That fee would be quite large ($10 – $200 depending on how busy the Ethereum network is). This is one major criticism of the Ethereum network.
The Ethereum Network Lead NFTs and DeFi
Ethereum has spearheaded the NFT and DeFi movement.
The Ethereum blockchain hosts “OpenSea”, the largest NFT marketplace available. Some Eth NFTs are selling for millions of dollars!
Similarly, DeFi has found a home on Ethereum, and Eth users have been enjoying a variety of interesting decentralized financial services. These include things like lending, borrowing, staking, yield farming, and more! The blockchain is favored by many developers and as such, there is excellent infrastructure and tools available to use.
The possibilities are endless on Ethereum.
Ether has loads of uses. But you don’t have to overcomplicate it. If you simply want to purchase Ethereum and hold it as a long-term investment, that is fine too! You should expect volatility as with just about any cryptocurrency investment out there. You can expect to see plenty of price fluctuations in the short term. Our recommendation for an Ethereum investment, even for advanced traders, would be to steadily dollar cost average (DCA).
How Much Is Ethereum Worth?
Ethereum was launched back in 2015 and the price has been soaring in recent years. The last peak was in November 2021 where Ether almost reached $5,000 per coin. Currently, in 2022, Ethereum is around $1,800 less than half of the previous all-time high! And this change happened in only a couple of months as the entire market came crashing down towards the end of 2021.
Even a top coin like Ether makes for risky crypto investment. Over the last couple of years, Ethereum has been as low as $150! So despite its strength, the volatility cannot be understated. Again, we enjoy volatility as it means there is potential for a lot of upsides. If volatility scares you, crypto investing might not be for you. It’s the name of the game!
Also, remember that Ethereum only has as much value as people think it does. The inherent value is based on how valuable people deem the blockchain and all its uses to be. Ethereum really is prone to huge price swings based on ridiculousness like the media, the stock market, public endorsements/denouncements, regulations, and more!
How To Buy Ethereum
First-time buyer of Ethereum? Well, welcome! Here’s a quick guide on how to buy Ether! Let’s keep it simple and use a cryptocurrency exchange. Just follow the instructions below:
1. Choose a Cryptocurrency Exchange
Buying cryptocurrency is different from buying stocks, shares, and other traditional investments. You have to use cryptocurrency exchanges – or “centralized exchanges” (CEX). There are plenty of cryptocurrency exchanges out there to choose from. You can find really basic exchanges, all the way through to complex trading platforms with tons of extra features.
Ether can be bought on just about any exchange because it is so popular. Alongside Bitcoin, Ether is the most likely coin to be listed on an exchange.
Choosing which exchange is right for you is a personal decision. There are multiple factors to consider when choosing an exchange. These are:
- Ease of creating an account and verifying it
- Choosing an exchange that is favored by your country
- Picking a crypto exchange that doesn’t have exorbitant trading fees
We would recommend looking at Binance, Coinbase, Gemini, eToro, or Crypto.com. These are good exchanges and all offer something a little bit different. For example, Binance has a lot of coins to choose from, Coinbase is one of the longest-standing exchanges out there, eToro has a demo trading platform etc.
You can even buy Ether from non-crypto trading platforms like Venmo or PayPal. We would recommend doing some research before choosing your platform. If you plan to be involved with crypto, it’s a good idea to pick a crypto exchange to start investing with.
You could also create a non-custodial wallet (MetaMask) and have a friend send you some Ether. This would require a trusted third-party friend with some know-how. For most, it will be easiest to find and use a reputable crypto exchange.
2. Create, Verify and Fund Your Account
After finding a suitable exchange to purchase your Ether, you will likely need to create an account, verify it, and onramp fiat currency onto the exchange. You should be able to buy eth with your preferred payment method, like debit/credit card transfer, Paypal, or wire transfer. Most exchanges will require some sort of ID to verify your identity. Some exchanges will give you private keys, AKA a password. Never lose your private key!
After you’ve completed the verification process, you will need to connect your debit card or use another funding method. Different exchanges will offer different payment methods. These differ from a bank transfer to a debit card, and more.
Some crypto exchanges allow you to purchase Ether straight from your bank account. Other crypto exchanges allow you to deposit money, then you have to go and exchange your Ether for your fiat currency. Often this means making a bid to buy Ether on the exchange’s marketplace. Some platforms allow you to state the price you wish to pay for your Ether, then you wait for that transaction to go through. Either way, your exchange of choice should have a guide for you to make it easier. Here is a guide on buying Ethereum by Binance.
4. Keeping Your Ethereum Safe
After you buy Ethereum, you will need to keep it safe. If you plan to hold for a long time and don’t want to sell ether, it could be a good idea to simply leave it on an exchange.
However, there is an inherent danger with leaving crypto on an exchange. Essentially, that exchange owns your crypto now, meaning you don’t own it. If the exchange faces a catastrophe (regulations, hacks), your crypto assets might go down with the ship. If you purchase a large amount of Eth, it could be a good idea to move the Eth away from the exchange.
We would recommend that you send your Eth to your own private wallets, like MetaMask or Trust Wallet. You create a wallet on either platform and get given a 12-word seed phrase (password). As long as you remember (or keep safe) this password, you’ll always be able to access your Eth. Those with large amounts of Eth might want to spread it around on multiple accounts so as to reduce the chance of losing their funds.
After you create your own wallet, you can buy crypto, stake it, lend it, and all sorts of options through decentralized exchanges (DEXs). We recommend all of our readers start getting familiar with DEXs and interacting with smart contracts!
Hot and Cold Wallets
To be extra safe, you can make multiple wallets and allocate some as cold wallets and some as hot wallets. A hot wallet is one that you are using to actively buy and sell crypto assets. You use it to connect to DApps, and it is at risk of being hacked, or you making a mistake and losing the funds. Generally, you would want less of your investment portfolio on your hot wallet.
Then you have a cold wallet. A cold wallet is where you store the majority of your assets that you plan to hold long-term. Most people will use a hardware wallet (like Trezor) to go with their cold wallet. Hardware wallets store your private keys on a physical device, and you can also add two-factor authentication as you need it to access your wallet.
Final Question, Should You Invest in Ethereum?
If you are interested in cryptocurrency, it’s a good idea to be buying Ether. Yes, it is already one of the biggest coins out there, but crypto is in its infancy and Eth has tons of room to grow. Sure, it’s unlikely we’ll see 1000x gains like you will on other coins, but Ether offers excellent relative safety compared to other cryptocurrencies with a high upside looking forward.
Also, it’s good to have some Ether on hand in case you need to make a quick DeFi or NFT buy. Without any Eth, you won’t be able to do anything on the Ethereum blockchain.
Its already massive market capitalization means it’s pretty safe for the future. Ethereum is established and here to stay. It is completely intertwined with the crypto world, just like Bitcoin.
Not only that but it is headed by some of the best minds in the whole of crypto, like Vitalik Buterin. Ethereum 2.0 will eventually be released and help Ethereum to be more scalable for users and developers. The future is bright with Ethereum in our opinion.
If you are scared of volatility and unsure about the future of crypto – Ethereum (or any crypto) probably isn’t for you. We would suggest reading into the entire space more and becoming familiar with the future of crypto, Eth, and why you might want to own some. Of course, none of this is financial information, simply our humble opinions… And we think Ether is going to the moon!
FAQs About Ethereum
No one can truly predict whether Ethereum’s price will go up or down in the future. Our opinion is that it will likely go up due to the widespread adoption of smart contracts that is likely to occur. Ethereum is spearheading this movement.
Every single cryptocurrency is extremely volatile and risky. New traders should be particularly careful if they want to buy cryptocurrencies. We would recommend a dollar-cost average strategy if you really want to buy Ethereum.
That’s like comparing apples to oranges. Bitcoin is leading the “digital gold” narrative, whereas Ethereum is the more active with builders and users interacting with the software each day.
No one can answer this question for you. As it stands, Ethereum would have to go on a very strong run in order to break all-time highs. The current issue we are facing is the macro-climate, like rising inflation rates, the Ukraine war, Luna collapse, and more. However, it’s possible that the cryptocurrency market flips bullish into the second half of the year.
