Invezz is an independent platform with the goal of helping users achieve financial freedom. In order to fund our work, we partner with advertisers who compensate us for users that Invezz refers to their services. While our reviews and assessments of each product on the site are independent and unbiased, brands may pay to appear higher up our table rankings or place ads in specific areas of the site. The order in which products and services appear on Invezz does not represent an endorsement from us, and please be aware that there may be other platforms available to you than the products and services that appear on our website. Read more about how we make money >
How to buy Ethereum online
If you want to invest in Ethereum, it is important to know all of the facts. This article explains everything you need to know about what makes Ethereum unique, introduces you to the Ether token, and shows you how it all works.
Compare where to buy Ethereum, and open an account
If you are already knowledgeable and just want to find a trading platform, we’re here to help. Our experts have reviewed all the leading options to try to find the best broker, and we recommend any of the platforms below. If you want to learn more first, scroll down.
What is Ethereum?
Ethereum is a blockchain platform that can be used by developers to build and run applications, and Ether (ETH) is the native currency. The platform is decentralised, meaning it is not controlled by a central governing authority like the Federal Reserve. Instead, it uses blockchain technology to democratically verify account balances and transactions, and holders of Ether can vote on governance issues.
At its core, Ethereum wants to change how apps on the internet function today. No longer do financial services require a middleman; smart contracts and miners plug the gap. A huge number of cryptocurrency platforms now run on the Ethereum blockchain and because of this, their native tokens, such as Zilliqa’s token ZIL and Tron’s token TRX, are known as ERC20 tokens.
The platform went live in 2015 after several years of development lead by founder, Vitalik Buterin. It has become increasingly popular in the last few years and the price of Ether has risen exponentially as a consequence. This growth shows no signs of slowing down with its second-generation platform, Ethereum 2.0, edging towards a release and seeking validators.
How does Ethereum work?
The internet has a long-established client-server model, and Ethereum works by replacing this with a decentralised blockchain. The platform is used by many developers to provide services that we might otherwise have never seen. From banking to betting, Ethereum functions to improve services and security through smart contracts. Its aims are more extensive than most cryptocurrencies, such as Bitcoin’s aim to singularly act as an electronic payment solution.
Ethereum advances the blockchain concept, aiming to entirely remove third parties from the data control equation. It achieves this with a network of ‘nodes’ that are run by volunteers around the world, including mining nodes. Those who mine Ethereum are rewarded by the system with proportionate quantities of ETH.
How to buy ETH online, a step-by-step guide
Step 1. Find an exchange
The best place to find cryptocurrency is on an exchange. As Ethereum is one of the most popular cryptocurrencies, you are spoilt for choice. We have outlined some of the best exchanges at the top of this page. Some will allow you use a credit card, and others will accept PayPal. For now, here are two of the best places to buy Ethereum in the UK.
- Binance: If you want to invest, choosing a reputable exchange that you can rely on is key. Binance’s reputation has been established by years of reliability and it has a beginner-friendly interface. You can start now by opening a Binance account today >
- Bittrex: Bittrex has one of the widest ranges of cryptocurrency tokens available anywhere. Its an easy to use platform, with an intuitive feel that’s ideal for beginners. Sign up with Bittrex now >
Step 2. Sign up and fund your account
Exchanges will usually require you to verify your identity before making any transactions. Prepare a copy of your photo ID because most verification checks on exchange platforms will require one to be submitted, though this can vary from platform to platform. Many exchanges accept funds in the form of both fiat and cryptocurrency.
Step 3. Purchase
Now your identity has been verified and your funds of choice have been added, your account is ready. If you have fiat currency in your account, such as GBP, go onto the exchange and look for the ETH/GBP pair. If you’re using a cryptocurrency like Bitcoin, look for the ETH/BTC pair. Choose the amount you want to exchange and execute your transaction. Easy.
Step 4. (Optional) Get a suitable wallet
If you want to hold onto your Ether coins to speculate on long-term price increases, an Ethereum wallet (much like a Bitcoin wallet) is highly recommended. Wallets can be online or a physical storage facility, and they add a layer of security to your tokens. As one of the most popular cryptos, nearly every wallet supports ETH. Below, we have outlined two of the top wallets.
- Trezor: Hardware wallets such as the Tezor wallet offer maximum security. Developed in 2014 as a Czech start-up, Trezor has established a reputation as one of the best hardware wallets around. Get your own Trezor today and store ETH >
- Freewallet: This is an accessible and easy-to-use online wallet that can securely store your investment safely. Freewallet also supports in excess of 100 other cryptos, making it a wallet with flexible applications. If you want to store ETH in an online wallet, consider opening a Freewallet account now >
How to trade Ethereum, a step-by-step guide
Step 1. Find a broker
If you want to make short term moves rather than speculate on long-term price changes, you need a broker. Ideally, you want to choose one that charges low fees. Top online brokers, such as eToro and Plus500, are usually the best places to trade Ethereum.
Step 2. Deposit money
Crypto brokers allow users to fund their accounts using fiat currency like, GBP, USD and EUR. One important thing to note is the trading fees; make sure you keep an eye on them because they can quickly accumulate.
Step 3. Decide how you’d like to trade
Developing a great technical strategy is something that takes time and commitment, but the reward can be dramatic. Such a strategy will reference key indicators and different trading methods like spread bettings, CFDs, using leverage, and shorting. Start developing your trading strategy today with our beginner’s guide to technical analysis.
Step 4. Start trading
Your trading account is now ready to go, but are you? If you are new to the market, we recommend starting out with a demo account so you can get the hang of things before putting your money on the line. Once you feel familiar with how the market works and are comfortable with the risks, you can move onto the real thing.
When you make a move, you can take a long position or a short position. Choosing a long position would mean that you have invested in ETH in the belief that it will rise in value, whereas opting for a short position means that you have an expectation that it will fall in value. Both of these are potentially profitable trading methods, and you should choose one based on your own due diligence.
You can also choose to use something called leverage. This is a service provided by a broker that allows you to loan money to make bigger trades. However, whilst this can maximise your profits, it enhances your vulnerability to the market moving against you. If you’re a beginner, we would advise you to steer clear of leverage until you have some more experience.
It’s a good idea to take some time to think about whether you want to put your money on the line, and that’s especially true for cryptocurrency. Here are some of Ethereum’s pros and cons, followed by a few final questions to help you decide.
- Prevalently used across a multitude of industries
- Impending ETH 2.0 launch promises significant improvements including a much-heralded shift from Proof of Work (PoW) to Proof of Stake (PoS)
- Ethereum is a well-planned project developed over a number of years unlike some other cryptocurrencies
If you still aren’t ready to invest in Ethereum, here are 3 key considerations.
1. Is now a good time to buy Ethereum?
The answer to this question depends on whether you are a long-term investor or a short-term investor. Investing with an eye on long-term value could prove to be profitable as decentralised finance (DeFi) continues to increase in popularity. Ethereum is currently the leading enterprise blockchain, and if version 2.0 can help cement its position at the front of the pack, the price should increase in the long term.
Shot-term investors do not need to pay as close attention to the fundamentals. Instead, you should focus on price charts, trends and indicators to inform your decisions as the market fluctuates. Regardless of your approach, Invezz can help your investment decisions by providing regular analysis. Check out the latest articles below:
Ethereum could advance even more in the ongoing bull market. Here are the next targets for buyers
Ethereum (ETH) price analysis after printing a fresh record high
What are the best cryptocurrencies to buy in April?
2. What problem does Ethereum solve, and what are its investment prospects?
Ethereum removes the middleman from online financial services. No longer does a central governing body preside over transactions; the system works independently and democratically. This is seen as a big win for those who oppose the monopoly that banks have historically held, and also for those who want to hold and exchange assets outside the current financial system.
If its growth is anything to go off, Ethereum’s long-term investment prospects look promising. Crypto is becoming an increasingly popular space, and as Ethereum is at the forefront of it, the price of its token stands to benefit. If 2.0 can further accelerate the growth of the platform, it could increase in value at an even greater rate.
To achieve long term success, Ethereum must fend off its competitors, mitigate the impacts of potential regulation and continue to innovate. Check out the most recent news below to keep informed:
Report: DeFi adoption turned Europe into the biggest crypto economy
Ethereum price prediction: Is ETH a buy or sell this week?
Golem Network rolls out an app to let users mine ETH on laptops
3. Do you want to hold ETH for the long term?
You can either hold your coins for the long term or trade them in the short term, and both strategies have different positives and negatives. When choosing one of these strategies, the main considerations that you should make are outlined below.
Considerations for a long term investment strategy
If you expect Ethereum’s growth to continue, get some from an exchange and store your coins in a wallet. When trying to discern if Ethereum is a good long-term investment or not, make sure to conduct some kind of fundamental analysis, similar to how you would analyse a stock.
Considerations for a short term trading strategy
If trading for short-term gains is your priority, sign up to a broker with low trading fees and conduct technical analysis. This will be key to unlocking value. If you spot a pattern, you should be able to make an educated decision about which way the price is likely to move.
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >