How to Buy Ethereum, and What You Should Know Before You Invest
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You may have heard of Ethereum because of the role it plays in the creation of NFTs (non-fungible tokens). Or perhaps you’ve noticed it’s the second-most popular cryptocurrency, and want to get in on the action.
Either way, Ethereum is one of two cryptocurrencies that investing experts recommend beginners stick to (the other being Bitcoin), because it’s more-established than other lesser-known cryptos. So if you’ve decided that cryptocurrency has a place in your portfolio, are OK with the risks, and are ready to buy some, here’s where to start.
BEFORE YOU INVEST IN CRYPTO Experts say it’s smart to keep your crypto investments under 5% of your overall portfolio. Crypto prices fluctuate wildly by the day, and experts also say you’d be smart not to invest more than you’d be OK losing if the market dropped out altogether. Crypto investments should also never get in the way of other financial priorities like saving for emergencies, paying off high-interest debt, and saving for retirement using more conventional investment strategies.
What is Ethereum?
Before you start buying coins, it’s important to understand exactly what you’re investing in. Ethereum has price history to support its potential as a store of value, but there’s also interesting innovation happening with Ethereum that highlights the coin’s utility.
[READ MORE]: What Is Ethereum
The Ethereum blockchain can be used by developers to create applications, known as decentralized applications (aka DApps). In order to access that network, developers need to buy Ethereum’s associated token, ether (ETH). Similarly, if users wish to interact with a decentralized application, they must pay in ether.
Like Bitcoin, investors can buy and hold ether as a long-term investment, with the hope that its value will continue to increase over the long-term. But as with any cryptocurrency investment, the price of ether is likely to see plenty of ups and downs, especially in the short-term. This volatility is why investing experts recommend keeping any cryptocurrency investments to less than 5% of your total portfolio and to only invest what you’re OK with losing.
What Is Ethereum Worth?
Ethereum launched in 2018, and its all-time high is over $4,000 in May of this year. In the past year its price has fluctuated between around $300 and $4,000 per coin.
Like most cryptocurrencies, Ethereum’s price fluctuates a lot. Price fluctuation should be anticipated with any crypto investment. If near-term price fluctuations bother you, you might be better off reconsidering investing in cryptocurrency at all.
It’s also important to remember that Ethereum — like any cryptocurrency — only has value because people think it does. Its price is not tied to any commodity or currency, so it’s prone to intense swings based on external factors like media attention or proposed crypto regulation.
How to Buy Ethereum
- Choose a Cryptocurrency Exchange
You can’t purchase cryptocurrency through a bank or an online brokerage like Fidelity or Vanguard, so you’ll have to use a cryptocurrency trading platform. There are a ton of cryptocurrency exchanges out there, ranging from easy-to-use systems to complex dashboards for advanced traders.
Since Ethereum is so popular, most cryptocurrency exchanges will let you buy ether, but we recommend sticking to a few of the more-popular exchanges like Coinbase, Gemini, or eToro. Ethereum is also one of the few types of crypto you can buy on platforms like Venmo or PayPal. Different platforms come with different fees, security measures, and may include other features, so it’s a good idea to do some research before you sign up.
- Fund Your Account
You’ll likely need to provide some personal information and verify your identity to sign up for an account with a crypto exchange. Then you’ll be able to connect your bank account or debit card to fund your account. There will likely be fee differences based on the method you choose.
Funding your account doesn’t mean you’ve actually purchased Ethereum yet, and like with any investment account you don’t want to leave your uninvested money sitting in your account. To actually invest, you’ll need to purchase Ethereum at this point.
- Place an Order for Ethereum
After your account is funded, you’ll be able to trade your U.S. dollars for Ethereum. Simply put in the amount of USD you’d like to trade for Ethereum. You will likely be buying shares of a single Ethereum coin, depending on Ethereum’s price and how much you want to purchase. Whatever amount you purchase will be shown as a percentage of a total ether coin.
- Store Your Ethereum
If you only have a small amount of crypto, it’s easiest to leave your investment in your exchange account. But a digital wallet can offer more security if you want to move your holding to more secure storage. There are many different types of digital wallets, and they offer different levels of security.
[READ MORE]: A Crypto Wallet Can Help Keep Your Coins Safe. Here’s How to Decide If You Need One)
Should You Invest in Ethereum?
Cryptocurrency is a highly volatile, speculative investment. It’s not for everyone, and you should make sure you have enough risk tolerance before you invest. If you decide cryptocurrency is right for you, then experts recommend sticking with two most well-known cryptos, which are Bitcoin and Ethereum.
Make sure you keep any investment to less than 5% of your total portfolio, only invest what you would ultimately be OK with losing, and never at the expense of any other financial goals like paying off debt or saving for retirement.
Even though experts recommend sticking with well-known coins like Ethereum, that doesn’t negate the risk associated with the investment. Cryptocurrency is a new asset class, and there’s no long-term data available to prove how it performs in the long-run. If this risk is too much for you, stick with a safer, long-term investment like a classic index fund through a conventional retirement account like an IRA or 401(k).
Ethereum Price Prediction for 2021 & Beyond • Benzinga
Decided you want in on the action? You can buy ETH on Coinbase, Gemini, and eToro.
Ethereum $3,309.83 Buy Ethereum MOON BUST 192 votes
Ethereum was invented in 2013 by Vitalik Buterin as an ambitious project that seeks to apply blockchain technology to more than just money. Through the use of smart contracts, developers can create and run elaborate systems on the Ethereum network that do much more than move currency from 1 wallet to another. In fact, entire applications have been built on the Ethereum network.
Ethereum’s native currency, Ether (ETH) is the second-largest cryptocurrency by market capitalization. Investors clearly recognize the potential of the network, with ETH up over 350% since the start of 2021. Most notably, the Ethereum network is not yet even in its final form, with more features and improvements still in the works, giving this cryptocurrency lots of potential.
What is ETH?
ETH is the native currency of the Ethereum network. The Ethereum network is a decentralized computing network that is built on the blockchain. Blockchains are public ledgers in which various network users verify all transactions, meaning that transactions cannot be altered or hidden. Ethereum seeks to apply this extreme verification to larger uses than just transferring money.
The Ethereum network features smart contracts, which are immutable due to the blockchain validating them. These contracts execute as designed every single time, free from interference from any third parties or governments. This process has allowed developers to create decentralized applications (dapps) that run on the network. In the same way a computer can run software, Ethereum can run dapps.
To incentivize users to contribute computing power to validate the transactions on the blockchain, Ethereum rewards miners with Ether (ETH). ETH is given to miners for successfully validating new blocks on the blockchain, keeping the ledger intact. ETH is also used to pay gas fees, which are fees for using the network to send currency or run applications.
ETH Market Position
At time of writing, ETH has a market capitalization of over $400 billion, making it the second largest cryptocurrency. Market capitalization represents the price of the token multiplied by the number of tokens in circulation. When looking at the potential for price growth, it is important to look at the market capitalization relative to other currencies to determine the true growth potential of a project.
Particularly for ETH, it is important to use market capitalization to compare the currency to Bitcoin (BTC). BTC Dominance is currently at a low level, meaning that BTC makes up only around 40% of the total value of all cryptocurrency. ETH and the many tokens built upon the Ethereum network are currently outpacing the growth rate of BTC, a bullish sign that indicates investors may see the Ethereum network as more important to the future of cryptocurrency than Bitcoin.
Standard Chartered’s Bull Case for ETH
British-based banking giant Standard Chartered set a price target of $26,000 to $35,000 for ETH. Its team of financial analysts believe that ETH is more similar to a financial market with more use cases than BTC, which they view as solely a currency. However, they note that for ETH to reach $35,000 and overtake BTC as the largest cryptocurrency, BTC would need to trade near $175,000. They add that ETH is a higher risk investment than BTC but could yield a higher reward.
Van Eck’s Bear Case for ETH
Van Eck is a global investment management firm that warns that governments could compete with ETH by creating Central Bank Digital Currencies, backed by government institutions much like fiat money. Van Eck remains bullish on ETH overall but notes that regulation can be one of the few things that can stop ETH’s momentum.
Where to Buy ETH
ETH is a top cryptocurrency and is listed on most major exchanges, such as Coinbase and Gemini. Coinbase has an ongoing program called Coinbase Learn that rewards you with select tokens for participating and answering questions correctly. If you’re investing in crypto for the long run, then Gemini is a great option, too. Gemini lets users earn interest on their cryptocurrency, allowing you to earn steady passive income from your digital assets.
Best For Sign Up Bonuses Overall Rating Read Review get started securely through crypto.com’s website More Details Best For Sign Up Bonuses N/A 1 Minute Review Crypto.com strives to make cryptocurrency a part of everyday life by offering a full suite of services for crypto users. The company offers a Crypto.com App, Exchange, Visa Card, DeFi swap, DeFi Wallet, DeFi Earn, Crypto.com Price, staking, crypto lending, and many other services. What really sets them apart, however, is the combination of super low fees and incredibly generous rewards programs for their users.
Best For Traders who want access to a secure, low-cost cryptocurrency exchange
Passive investors who want to earn interest on their balance without frequent trading
Mobile investors who prefer to handle all their crypto needs via their phone or tablet Pros Low fees
High security
One-stop shop for all your crypto needs (wallet, trading, spending, and more)
Lots of ways to earn interest, rewards, and rebates Cons Low privacy
Customer service response time could be improved Best For Crypto Trading Overall Rating Read Review get started securely through eToro’s website More Details Best For Crypto Trading N/A 1 Minute Review eToro, headquartered in Cyprus, England and Israel, has provided forex products and other CFD derivatives to retail clients since 2007. A major eToro plus is its social trading operations, including OpenBook, which allows new clients to copy trade the platform’s best performers. Its social trading features are top notch, but eToro loses points for its lack of tradable currency pairs and underwhelming research and customer service features Best For U.S. based cryptocurrency traders
Social and copy traders
Simple user interface
Community engagement and following other traders Pros 25 cryptocurrencies
Expansive network of social trading features
Large client base for new traders to imitate Cons U.S. traders can only buy cryptocurrency Best For Low Minimums Overall Rating Read Review get started securely through Webull’s website Best For New Investors Overall Rating Read Review try for free securely through Gemini Crypto’s website More Details Best For New Investors N/A 1 Minute Review Gemini is a cryptocurrency exchange and custodian that offers investors access to 26 coins and tokens. Founded in the US, Gemini is expanding globally, in particular into Europe and Asia. Offerings include both major cryptocurrency projects like Bitcoin and Ethereum, and smaller altcoins like Orchid and 0x. Gemini is 1 of the only brokers with multiple platform options based on skill level. New investors will love the streamlined interface of Gemini’s mobile and web apps, while advanced investors might appreciate all the tools that come with ActiveTrader. In addition to a host of platform choices, Gemini users also have access to insured hot wallets to store tokens without worrying about digital asset theft. Learn more about what Gemini can do for you in our review. Best For New investors looking for a simple mobile and web app
Experienced investors who need a more advanced platform with more tools
Users looking for a 1-stop-shop to buy, sell and store all of their coins Pros Easy and quick signups — can get started in as little as a few minutes
Multitude of platforms to accommodate traders of all skill levels
Hot wallets include insurance to protect your from theft and hacking attempts Cons Charges both a commission and a convenience fee for users buying and selling through the desktop or mobile app Best For Buying & selling Dogecoin Overall Rating Read Review get started securely through Robinhood’s website Best For Earning Rewards Overall Rating Read Review earn free crypto securely through Coinbase’s website More Details Best For Earning Rewards N/A 1 Minute Review Coinbase is one of the Internet’s largest cryptocurrency trading platforms. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes it exceptionally simple to buy and sell major cryptocurrency pairs. You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and enhanced functionality. Though Coinbase doesn’t offer the most affordable pricing or the lowest fees, its simple platform is easy enough for complete beginners to master in as little as a single trade. Best For New cryptocurrency traders
Cryptocurrency traders interested in major pairs
Cryptocurrency traders interested in a simple platform Pros Simple platform is easy to operate
Comprehensive mobile app mirrors desktop functionality
Coinbase Earn feature rewards you with crypto for learning about available coins Cons Higher fees than competitors Best For Mobile Traders Overall Rating Read Review claim free Bitcoin securely through Voyager’s website More Details Best For Mobile Traders N/A 1 Minute Review Voyager is a leading name in the sphere of cryptocurrency investing, giving you access to over 50 tokens and coins. Buy, sell and swap assets using Voyager Crypto’s simple mobile platform available as a free download for iOS and Android users. When you invest through Voyager, you’ll pay nothing in commissions, which is a major benefit when compared to other cryptocurrency brokers. Voyager is also one of the only brokers we’ve seen that allows users to earn interest on their crypto investments. Though the broker could do more to improve its customer service, it’s an excellent option for beginner investors and seasoned professionals alike. Best For Cryptocurrency investors looking for a wide selection of supported projects.
Investors who prefer mobile trading.
Anyone interested in earning interest on their crypto investments. Pros Simple, straightforward and intuitive mobile platform
Wealth of investment opportunities
Allows users to earn interest on select crypto investments Cons Only available for mobile users — no desktop platform
Limited routes to contact customer service team
How Long Will it Take for ETH to Reach $10,000?
A $10,000 ETH is possible within the next few years. ETH remains the dominant platform for blockchain applications, but the technology is rather new. As more and more developers learn to use the Ethereum network over the coming years, more dapps will exist on Ethereum, and more users will be drawn to the network.
Additionally, major institutions are beginning to use Ethereum. Traditionally, governments and institutions tend to be slow to adopt new blockchain technology, but the rate of adoption has ramped up over the past year. As more companies realize the potential of Ethereum, the price will be driven up.
A $10,000 ETH is likely to require a further reduction of Bitcoin Dominance. However, Bitcoin remains the best indicator for the health of the cryptocurrency market overall. In essence, ETH needs BTC and the market to climb overall but also needs to eat into BTC’s market share.
Finally, ETH 2.0 is a major set of upgrades to ETH that is set to roll out within the coming year. As ETH transitions from proof-of-work to proof-of-stake, several major changes will occur that can drive up the price of ETH.
In August 2021, EIP-1559 passed, meaning that some of the transaction fees on the Ethereum network will be burned. The more the network is used, the more ETH is burned, and the scarcer ETH becomes. If you believe that ETH will be used more in the coming years, this deflationary measure should mean the price of ETH will increase.
The current proof-of-work system hugely increases selling pressure on ETH. Miners have expenses to pay, and they do this by selling the ETH they mine. As ETH moves to proof-of-stake and miners are cut out, this huge dumping of ETH will stop. Additionally, staking rewards users for holding ETH, so the sell pressure will be cut even further.
The transition to ETH 2.0 should also cut fees dramatically, further increasing network use and increasing the amount of ETH that is burned. The rollout of these scalability upgrades looks to be set for 2022.
Where to Store ETH Safely
Check out one of these crypto wallets.
Best Hardware Wallet: Ledger
Hardware wallets store cryptocurrencies offline. The user’s private keys, which are used to authorize transactions, are stored on the Ledger device. This process keeps the keys offline and away from hackers who could access the keys from an online location.
Best Software Wallet: ZenGo
ZenGo is a mobile application that offers a non-custodial wallet to store private keys. In addition to being a wallet, ZenGo allows users to buy cryptocurrencies in the application.
Best For ERC-20 tokens Overall Rating Read Review buy now securely through Ledger Hardware Wallet’s website More Details Best For ERC-20 tokens N/A 1 Minute Review Launched in 2014, Ledger has transformed into a fast-paced, growing company developing infrastructure and security solutions for cryptocurrencies as well as blockchain applications for companies and individuals. Born in Paris, the company has since expanded to more than 130 employees in France and San Francisco. With 1,500,000 Ledger wallets already sold in 165 countries, the company aims at securing the new disruptive class of crypto assets. Ledger has developed a distinctive operating system called BOLOS, which it integrates to a secure chip for its line of wallets. So far, Ledger takes pride in being the only market player to provide this technology. Best For ERC-20 tokens
All experience levels Pros Easy to set up and use
Supports more than 1,500 different digital assets
Tamper proof
Portable
Long-lasting battery
Bluetooth connectivity features Cons Can be quite pricey Best For Quick purchases Overall Rating Read Review Secure Your Crypto securely through ZenGo’s website More Details Best For Quick purchases N/A 1 Minute Review ZenGo is an Israeli company that is out of Tel Aviv. The company provides a secure crypto wallet using next-generation cryptography. You don’t need private keys to access your wallet with their state-of-the-art biometrics to identify you. ZenGo is creating a borderless economy that allows you to effortlessly and safely trade your cryptocurrency assets. The mission is to enable crypto trading and assist in the processing of financial services by addressing the most common crypto challenges. You never have to worry about the security protocols, country, or industry-specific requirements to trade. Best For Simple cryptocurrency management
Making quick purchases
Next-generation security protocols Pros A high quality mobile crypto trading application
Free Bitcoin and bonuses
3FA security features Cons The keyless technology can be confusing for crypto beginners
ZenGo is not available in Hawaii, Connecticut, New Mexico, New York, Cuba, or Panama
Current Crypto Prices
The total cryptocurrency market capitalization sits just over $2 trillion, marking a strong recovery following an early-summer dip. ETH and altcoins continue to take market dominance away from Bitcoin. The ETH transition to proof-of-stake seems to imply a strong future for decentralized finance (DeFi) and a continued long-term timeline of growth.
So, is ETH a Good Investment?
If you believe that smart contracts, DeFi, and dapps are the future, then ETH should remain the frontrunner in those categories. With more and more institutional involvement and scalability upgrades coming, most experts and analysts see a bright future for ETH.
Ethereum might be the most diversified Layer 2 bet with 600% upside potential
Solana, a non-Ethereum virtual machine compatible chain, has witnessed an exponential rise in TVL, posing a threat to the ETH ecosystem.
On-chain activity and user adoption of Ethereum is rising, undeterred by the recent drop in price, bullish for the altcoin.
Analysts observe similarities between Ethereum’s ongoing rally and Bitcoin’s 2017 bull run, target $20,000 by the end of 2021.
Reduction in Ethereum supply and plummeting spot exchange reserves of Ether indicate a bullish outlook.
Ethereum rally to $20,000 becomes more likely with recent updates
After a successive price rise over four weeks in a row, Solana has hit a market capitalization of $51.7 billion, garnering mainstream media attention as an Ethereum rival. Among other layer one protocols, Solana is the only one that is not compatible with the Ethereum Virtual Machine, the network’s Turing-complete machine that interacts with smart contracts.
Solana’s meteoric rise has positioned it as a top contender for capturing larger DeFi market share in competition with Ethereum.
The launch of ETH2 (migration of Ethereum from Proof-of-Work to Proof-of-Stake) will see Ethereum capturing an even larger share of the DeFi and NFT market, boosting the demand and utility for Ether.
The altcoin’s open interest in perpetual futures contracts has hit a new all-time high of $7.8 billion as the overall interest in crypto derivatives hit a peak this week.
More traders are motivated to take leveraged positions since the crypto market’s recovery from the September 7 flash crash. A rise in open interest is equated with rising bullish outlook on Ether among traders.
When investors anticipate an upcoming rally in a cryptocurrency, they buy and hold perpetual futures contracts. This implies that investors are expecting a rally in Ethereum.
According to CoinMetrics, a crypto market analytics and data platform, cascading liquidations do not impact the fundamentals of an asset. Since the beginning of 2021, Ethereum has added over 6.2 million wallet addresses (holding 0.01 to 1 Ether).
The altcoin’s adoption by users is on the rise, and it is undeterred by market volatility and price crash.
Liquidation cascades have dramatic effects on price but don’t change underlying fundamentals. #Ethereum added more than 6.2M addresses holding 0.01-1 ETH year to date.
User adoption is growing rapidly and was not meaningfully impacted by the crash.https://t.co/IHZvm2D16q pic.twitter.com/qX2sPEGfDH — CoinMetrics.io (@coinmetrics) September 10, 2021
Pseudonymous analyst @IamCryptoWolf has observed that the current price trend of Ethereum is similar to that of Bitcoin in the 2017 bull run. The analyst is expecting a run to $20,000 before the end of 2021.
#Ethereum chart has been ridiculously similar to $BTC 2017.
20k $ETH isn’t that crazy as a target. — Wolf (@IamCryptoWolf) September 10, 2021
FXStreet analysts observe a consolidation in the altcoin’s price, as bulls anticipate that ETH will retest the $4000 level.