Ways to invest in Ethereum
The first thing you need to know when investing in Ethereum is that you’ll need to sign up with either an exchange or an online broker. These platforms allow you to buy, sell, and trade Ethereum, with pros and cons to each approach.
There are a bunch of ways you can invest in Ethereum. Those include buying and holding coins for the long term, engaging in short-term trading, or using financial instruments such as ETFs to invest. The links below take you to individual pages which guide you through the different methods of investing in Ethereum.
What is Ethereum?
Ethereum is an open-source blockchain platform that developers use to build decentralised applications (called DApps). Ethereum’s best known product is a cryptocurrency called Ether. To keep things simple, we will use the term Ethereum to refer to the cryptocurrency (the world’s second-largest, behind Bitcoin), rather than the blockchain on which it’s built.
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How to invest in Ethereum
Get to know all the options available, so you can pick the investing method that works best for your specific needs and goals. Here is a quick summary of how to invest in Ethereum using a variety of methods; if you want to learn more, simply follow the links to our guides on each subject.
- Broker platforms. To buy Ethereum quickly, the best option is to use a broker. These platforms buy and sell Ethereum instantly at the current rates advertised on their websites. This convenience comes at a cost, however, with brokers usually being the most expensive way to invest.
- Cryptocurrency exchanges. Exchanges are peer-to-peer trading platforms that allow you to buy from, and sell to, other users in real time. These platforms are harder to master than brokers. The upside is that they enable you to buy Ethereum at cheaper prices and also allow you to trade your coins for a wide variety of other cryptocurrencies.
- ETFs. There are now a number of ETFs (Exchange Traded Funds) which follow the price of Ethereum. Through investing in one of these ETFs, you can trade in relation to the value of Ethereum without having to own any actual coins.
- Funds. A fund consists of investors pooling money together to be invested by a fund manager, in a way that hopefully generates steady profits for all. Some large funds are now getting involved in Ethereum, as well as other major cryptocurrencies. By investing in one of these funds, you can benefit from their cryptocurrency investments. Because these funds are managed, you’ll want to research how reliable the people running them are before investing.
- Trusts. Trusts are similar to funds, except they are often ‘closed’, which means the total amount of money in them is fixed and they trade on the stock market. You gain access by buying shares in the trust. This has not traditionally been an option for cryptocurrency, but as it becomes more popular some trust managers are starting to add some exposure to Bitcoin in particular, so Ethereum may soon follow suit.
- Debit cards. You can now get debit cards which allow you to spend Ethereum in regular shops. These cards hold your coins, and instantly exchange them for fiat currency whenever you make a purchase. This means you can use cryptocurrency as part of your everyday errands. The downside is that these cards come with high fees.
- Apps. If you want to invest in Ethereum on the go, there’s a variety of apps that can help you do so. Many online brokers have a mobile app you can link to your account. The same goes for some exchanges and other platforms that help you execute trades.
- Wallets. If you’re looking to buy and hold coins for the long term, it can be a good idea to invest in a secure Ethereum wallet. This isn’t necessary, but is worth looking into if you’re security conscious, especially if you own a lot of coins.
Where can I buy Ethereum now?
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