Ethereum Trading Guide: Getting Started

Ethereum Trading Guide

Ethereum is a digital asset that builds on the blockchain technology that underpins Bitcoin and extends its use to various applications.  Ethereum permits smart contracts and decentralized apps (dApps) to be written and run without the risk of downtime, fraud, control, or third-party interference.

Ether, its native cryptographic token for Ethereum, serves as a fuel for performing commands on the Ethereum network, and developers utilize it to create and run applications.

The two primary purposes of Ether are for trading on digital currency and operating apps on the Ethereum platform.

This guide will discuss Ethereum, ways to invest in Ethereum, and the best cryptocurrency brokers in the Ethereum marketplace.

What Is Ether’s Working Principle?

Ether, like other cryptocurrencies, relies on a shared digital ledger to keep track of all transactions. It is open to the public, transparent, and extremely difficult to change.

Miners’ role is to authenticate ether transactions and build “blocks” in a cluster.  They must also protect these blocks using sophisticated cryptographic techniques.  The new blocks connect to the previous blocks, and the miner who creates them gains a “block reward,” a fixed number of ether tokens—the miner gets a block reward, which they can reinvest in the market.

What About Ethereum?

Although the Ethereum blockchain is identical to the Bitcoin blockchain, its programming language permits developers to design software that automates specified outcomes and controls blockchain transactions.  A “smart contract” is the name for this type of software.

A smart contract is an agreement that lays down the terms of a partnership.

The software implements the deal automatically when pre-defined conditions are satisfied and eliminates the manual process for a contract requirement.

A user of Ethereum might design an Ethereum smart contract to transfer a certain amount of Ether to a person on a fixed date.  The user can write a code into the blockchain, and the Ether would be released to the other party once the agreed date arrives.

Ethereum Trading Strategies

  1. Trades should have a specific goal.

When it comes to bitcoin trading, you must have a specific goal in mind.  It makes no difference whether you trade during the day or at night; it is essential to have a reason to do so.  Cryptocurrency is a game of chess in which one player wins, and the other loses.  The bitcoin market is full of intelligent traders, and it is highly volatile.  If you make a mistake in the process, you risk losing your entire portfolio.  It’s sometimes preferable not to profit from specific trades than to lose money.

Any investor should know when to exit a trade, whether lucrative or not.  The same set of regulations governs profits.  Set a profit target to keep things from getting out of hand.

The most common reason cryptocurrency traders fail is a fear of missing out.  Many people think of bitcoin trading as something for outsiders and believe they can profit with such a mindset.  It is not how cryptocurrency trading works.  Others may see the fear of losing out as an opportunity to benefit from digital currency.

Don’t be in a hurry to make huge profits.  Instead, invest little and collect small profits while trading cryptocurrency regularly.  Investing less is a wise decision as the market is unpredictable.

The current price of Bitcoin has an impact on the cryptocurrency market.  It’s wise to note that Bitcoin is a highly volatile fiat cryptocurrency.  You need to understand that as Bitcoin prices rise, altcoins tend to plummet, but it is better not to have close targets or trade during this period.

What Is The Best Procedure To Invest In Ethereum?  Select A Broker

You’ll need to find a reputable cryptocurrency broker if you want to invest in Ethereum in the United States on a safe and low-cost basis.  The following is a list of the leading Ethereum brokers currently serving US clients.

Continue reading for a detailed review of the above Ethereum brokers.

A Quick Guide To Investing In Ethereum In 2022

Here’s a quick guide on how to invest in Ethereum in less than five minutes.  We will use eToro as an example to show you how to trade.

Step 1: Create an eToro account.

You can register an eToro account in less than two minutes.  You will provide your personal information, social security number, and phone number.

Step 2: Upload a copy of your government-issued ID to avoid account restrictions. 

Step 3: Make a Deposit — eToro allows users to deposit funds using a debit or credit card, PayPal, or a bank wire.  US clients have no deposit fees, and the minimum deposit is only $50.

Step 4: Invest in Ethereum —Search for ‘Ethereum’ and select the ‘Trade’ option.  After inputting your investment amount ($25 minimum), click the’ Open’ button.  Ethereum investment will be executed at the next best available price by eToro.  You won’t need to bother purchasing a wallet to store your funds because eToro provides one.  With the eToro in-house wallet, you can keep your ETH tokens until you’re ready to sell. 

Full Broker Reviews – Where To Buy Ethereum

There are hundreds of cryptocurrency exchanges available online.  Almost all of them support Ethereum buy and sell markets, making it challenging to know the best broker to invest in Ethereum; that is why we put together extensive reviews of the top providers. 

Make sure to read our full broker reviews to discover the ideal Ethereum broker for you!

1.    eToro

Look no further than eToro if you’re searching for the right place to invest in Ethereum in the United States.  This brokerage site, which first opened its doors in 2007, now has a user base of over 20 million people.  Even if you’re a beginner in digital currencies, you should be able to complete the procedure in about five minutes at eToro.

To begin, create an account and upload a copy of your id.  Then, to meet the $50 minimum deposit requirement, you can choose from various payment methods.  You can deposit through Visa, MasterCard, Paypal, Neteller, WebMoney, and local bank transfers.  There are no commission charges with the above payment method.

After you fund your eToro account, you can search for Ethereum and set your investment stake.  You can trade with $25 if you want to start small.  eToro will purchase Ethereum at the best available rate when you confirm your deposit.  eToro helps you safely store your ETH tokens in your eToro portfolio.

eToro also wins when it comes to trading fees.  Because the broker charges a spread, which is a markup between the buy and sell prices, it starts at just 0.75 percent on digital currencies, which is one of the finest spreads we’ve seen.  Suppose you’re a risk-averse investor who likes to diversify.  In that case, you’ll be happy to learn that eToro has over 30 cryptocurrencies available on its platforms like XRP, Litecoin, Bitcoin, Ethereum Classic, EOS, and Cardano.

Also, with the eToro CopyPortfolio, you can passively invest in a diversified basket of crypto assets.  The eToro staff will rebalance the portfolio regularly, so you won’t have to do anything until you’re ready to cash out.  The eToro Copy Trading tool, another passive investment type.

It allows you to ‘clone’ a skilled eToro trader, proportionate to your deposit amount.  If your chosen trader decides to put 25% of their portfolio into Ethereum, for example, you will do the same.  Finally, and probably most crucially, eToro is one of the industry’s most well-regulated and trustworthy cryptocurrency brokers.  The SEC and FINRA have approved the platform in the United States, while financial bodies in the United Kingdom, Australia, and Cyprus have authorized and regulated it.

Pros

Cons

 

2.    Coinbase: Beginner-Friendly Ethereum Broker

You’ve probably heard of Coinbase, one of the most well-known cryptocurrency exchanges in the United States.  The platform serves 56 million+ clients and has its parent company on the NASDAQ exchange list.  Coin-base is a beginner-friendly Ethereum broker that supports instant investment via debit card payments.

To gain access to its fiat currency, you first register and upload your ID on its platform.  A 3.99% commission will be charged from your account if you choose to use the Instant Buy feature.  For manual transfers, no fee-charges with a US bank account.  You can invest in Ethereum for 1.49% once your funds reflect on Coinbase.

Even though Coinbase is among the most costly brokers in the industry, it is also the safest.  It is due to the platform’s extensive security features, which ensure that you can invest without worrying about being ripped off or hacked.  For example, all account holders must enable two-factor authentication.

Furthermore, Coinbase stores 98 percent of digital client funds in cold storage, with the remaining 2% housed in hot wallets for liquidity and withdrawal. 

Coinbase is a superb way to diversify your portfolio in addition to providing high levels of security and convenience.  It is due to the platform’s wide range of blockchain assets, with new ones introduced regularly.  The Coinbase mobile app, which serves as a cryptocurrency wallet, is also available.

Pros

Cons

3.    Binance – An excellent place for Asset Diversity

Binance is the world’s largest cryptocurrency exchange for trading volume and client base by a wide margin.  Binance, for example, boasts of having over 100 million account users.  Amidst being a global cryptocurrency exchange, Binance creates a domestic platform that complies with all necessary US regulations and legislation.

As a result, as a US client, you may invest in Ethereum with confidence, knowing that you are dealing with a reputable company.  When it comes to investing in Ethereum on Binance, the most straightforward method is to use your debit or credit card.  Binance will have to verify your identity first before you can start investing. 

Binance charges a 0.5 percent debit/credit card fee to invest in Ethereums significantly less than Coinbase.  Likewise, this is true of the 50+ other digital currencies offered on Binance’s main website.  If you want to trade digital assets on the Binance exchange, you will only pay 0.1 percent per slide.  For example, if you wanted to exchange $1,000 worth of Ethereum for Bitcoin, you’d have to pay a $1 charge.  This charge is further lowered by 25% if you own a minimum quantity of Binance Coin (BNB) tokens.

If you’ve done some short-term trading before, you might enjoy the complex Binance exchange.  It provides you access to various tools that can assist you in predicting the future direction of your chosen cryptocurrency pair—detailed charts with numerous timeframes, technical indicators, and integration of Trading View integration.  You can select from the Binance list of orders such as limit, stop-loss, and take-profit orders, helpful in entering and exiting the market with minimal risk.

Pros

facilitates a daily trade volume of billions of dollars.

Hundreds of digital asset pairs are supported.

Debit/credit card deposits are almost instantaneous.

The initial trading commission is only 0.1 percent per slide.

It supports cryptocurrency savings accounts.

It’s ideal for both new and seasoned traders.

Cons

You can’t buy all supported cryptocurrencies with a debit or credit card.

There are no e-wallet deposits or withdrawals available.

4.    Robinhood

Robinhood is one of the leading stockbrokers in the United States, with millions of customers utilizing the platform to buy and sell stocks quickly and cost-effectively.  On the other hand, Robinhood has since expanded into additional asset classes.  It includes not only options and investment funds but also a few cryptocurrencies.  Ethereum, Bitcoin, Litecoin, and Dogecoin are examples of this.  Robinhood permits you to invest in Ethereum on a fractional basis, similar to how it does with stocks.

It implies that you can buy any amount you want rather than spend almost $3,000 on a single ETH token.  If you invested $35 and Ethereum was trading at $3,500, you would own 1% of the currency.  Robinhood is popular for its 0% commission offering for expenses.  Although it appears that you are receiving a good deal, it is critical to keep an eye on the spread at first sight.  It is the difference between the buy and sells price of Ethereum, as previously stated.

We’ve noticed that the spread of Robinhood might creep up at times, particularly outside of regular market hours.  However, after you’ve made an Ethereum investment with Robinhood, you won’t be able to withdraw your tokens to a third-party wallet.  Instead, your money will stay on the platform until you decide to cash out, which you can do at any moment.  Robinhood does not accept debit/credit cards or e-wallets like Paypal as payment methods for Ethereum investments.

Instead, you have two options: ACH and a bank wire.  Both options are free.  However, you may wait for Robinhood to credit your account for five days.  For example, if you have an account, only the first $1,000 you deposit will be credited immediately.  You’ll have much higher limits if you have a gold account, which costs $5 per month.  Finally, we should mention that Robinhood has a highly-rated mobile app that lets you buy, sell, and trade assets while on the go.

Pros

Cons

5.    Webull – Start Investing In Ethereum For $1

Webull is the last broker we’ll look at today, and it’s an attractive option if you’re looking to invest in Ethereum in the United States with tiny sums.  Simply put, you can invest in cryptocurrencies with as little as $1 using our user-friendly trading platform.  It means you may buy a minimal amount of Ethereum, ideal for anyone looking to enter the market cautiously.  Webull offers a 0% commission service, similar to Robinhood.

The platform specifies a spread of 100 basis points charges.  It indicates that the spread is set at a minimum of 1% in layman’s words, considering that the 0% commission offer isn’t as appealing as it appears.  eToro, for example, uses a similar pricing approach, although the spread begins at just 0.75 percent.  Webull also offers a variety of other popular digital assets in addition to Ethereum.

Pros

Cons

 

A Detailed Guide on how to invest in Ethereum

You might be puzzled about how things work if you’ve never utilized an online cryptocurrency to invest in digital assets.  Simply put, the investment process is nearly identical to that of purchasing stock from a typical stockbroker.  In other words, you only register a cryptocurrency broker account, deposit some dollars, and then finish your Ethereum investment.

However, if you need some help, we will walk you through the detailed process of investing in Ethereum.  You’ll see that we’re utilizing eToro, a FINRA-approved broker that’s not only the ideal platform for investing in Ethereum in terms of ease and cost-effectiveness but also security.

Step 1- create an Ethereum investment account.

When you choose eToro as your Ethereum broker, the first step is to create an account.  You will provide the broker with personal details such as first and last name, home address and nationality, date of birth, contact details, and social security number.  Then you will verify your phone number and email address.

Step 2: Add your ID.

The broker will request that you upload two verification documents to finalize the eToro registration process.  Regardless of which asset classes they host, this is the industry standard for regulated brokers.

The two documents you need to submit are Proof of Residency and Proof of Identity.  eToro will electronically check your identity and residency status after uploading the above papers.  It does so using automated technology, so expect your eToro account to be confirmed in under 24 hours in most circumstances.

Step 3: Make a deposit.

After you’ve completed the account verification process, the following step is to fill your freshly created eToro account with funds.  Using a debit/credit card is the simplest and fastest method.  E-wallets such as Paypal and Neteller are also worth considering because they are instantaneous.

A local bank wire is another option.  However, this can cause a delay of 0-3 working days, so keep that in mind.  Clients from the United States can fund their accounts without incurring any transaction fees.  The minimum deposit amount is $50 for all supported payment methods.

Stage 4: Search for Ethereum

eToro offers a vast number of financial instruments across various asset classes.  In that capacity, it’s ideal for entering ‘Ethereum’ in the search box and clicking the ‘Trade’ button.

It will lead you straight to the website to invest in Ethereum.

Step 5: Invest in Ethereum

The last step is to enter your stake and confirm the order.  First, put your investment amount in US dollars into the appropriate area.  The initial investment in Ethereum is only $25.  When you enter your stake, the units will update in real-time.

Selling Your Ethereum

The only reason why you are investing in ethereum is to make profits.  The best way is to sell your ETH token at a higher market price than what you paid.  For example, if you traded ethereum when it was $300 per token, you have to sell when the digital asset is at $4000

Three Ways To Invest In Ethereum In The US

Here are the three best ways to invest in Ethereum in the US.

  1. Ethereum ATM

In the US, there are thousands of cryptocurrency ATMs available.  Many of these will accept both Bitcoin and Ethereum as payment methods.  It means you can just put cash into an ATM and receive Ethereum tokens in your wallet.  Please keep in mind that commission fees for Ethereum ATMs are incredibly high.

As previously stated, Ethereum brokers operate similarly to traditional stock trading platforms.  It is because the Ethereum broker will most likely be regulated and, more importantly, authorized to work in the United States.  It is valid for all Ethereum brokers we’ve described on this page.

You will not need to deal with other market participants since Ethereum brokers will sell you digital tokens directly.  You can also pay for your Ethereum investment in US dollars, with certain brokers accepting debit/credit cards and e-wallets.

If you want minimal commissions and an extensive library of markets, you can consider using a cryptocurrency exchange.  You will be trading with other investors as a result of this.  There are hundreds of deals in this arena, offering an Ethereum market.

The main issue is that cryptocurrency exchanges frequently fall short of regulatory requirements because they are offshore and have no answerable regulatory authority.  As a result, we recommend avoiding unregulated exchanges.

Reasons Why You Should Invest In Ethereum

De-Factor Smart Contract Platform

The Ethereum blockchain’s key selling point allows users to create smart contracts.  Although you don’t need to know how smart contracts function in detail, understanding the essentials is beneficial as an investor.  In a word, smart contracts enable two or more parties to deal in a decentralized and trustless manner.

The system does this using pre-defined code that a single person or entity cannot alter.  For example, a smart contract-backed travel insurance policy may payout if you cancel your trip.

The Ethereum blockchain’s smart contract technology works in almost any sector or industry, from baking to employment to gaming and voting.

Ethereum 2.0.

The Ethereum project is also approaching its much-anticipated network update, a highly promising technological component called ‘Ethereum 2.0,’ which will propel the underlying network to new heights.

Overall, Ethereum 2.0 will allow the project to manage many transactions at a minimal cost, paving the road for widespread adoption.

Ethereum Has Produced Massive Gains

Since its inception some years ago, Ethereum has not failed its supporters regarding investment returns.  Indeed, if you were one of the fortunate investors in Ethereum in 2015, you would have paid roughly $0.75 per token.  Ethereum is currently selling at slightly over $3,200 as of August 2021.

What Are Risks Involved In Investing In Ethereum?

All types of investments involve some level of risks, whether stocks, cryptocurrency, or gold, have some level of risk.  However, the dangers associated with digital assets such as Ethereum are far larger.

Volatility

For example, we said previously that Ethereum’s value surged by about 500% in the first five months of 2021.  On the other hand, Ethereum has had instances where it has lost a significant amount of value in a short time.

The digital asset, for example, fell from highs of $1,400 in January 2018 to just $370 in April of the same year.  It translates to a 73 percent price drop in four months of trading.

Competition

Even though Ethereum is the second-largest cryptocurrency by market capitalization and remains the industry’s de-facto smart contract platform, it faces intense competition from rival initiatives.  For example, NEO allows for secure smart contracts on its network and provides faster and more scalable transactions than Ethereum.

What Is The Cost Of Investing In Ethereum?

To invest in Ethereum, you will have to pay some fees.  Deposit fees and trading commissions are the two most common costs.

When depositing your funds with a debit or credit card, you may find that bitcoin brokers impose a fee of 3-5 percent.  Binance, on the other hand, is far more competitive, charging only 0.5 percent on debit and credit card transactions.

To invest in Ethereum, you will almost certainly have to pay a commission.  On both buy and sell orders, Coinbase, for example, charges 1.49 percent.

When looking for Ethereum brokers who advertise 0% commissions, be cautious.  For example, while Webull charges no commission on Ethereum investments, the spread begins at 1%.

Overall, we discovered that eToro is one of the most cost-effective Ethereum brokers.  US clients can deposit funds for free via a debit/credit card, e-wallet, or bank transfer, and the only trading fee is the spread (from 0.75 percent on crypto).

Conclusion On How To Buy And Invest In Ethereum

You can complete the process in under five minutes after reading our beginner’s guide on how to invest in Ethereum. Before you open an account, you should research the broker you want to use.  As previously said, the platform you choose must be regulated, have reasonable costs, and accept your preferred deposit method.

Finally, we discovered that eToro is the finest broker in this market, as you can invest in Ethereum for as little as $25.  Multiple financial agencies regulate the broker, and it is permitted to operate in the United States.  Not only may you make a free deposit with a debit/credit card or an e-wallet, but you can also make a free withdrawal.

FAQs

What is the best way to invest in Ethereum?

In less than five minutes, you can invest in Ethereum on eToro.  Go to the eToro website, sign up for an account, deposit some money, and then input the amount you want to invest.  The minimum Ethereum deposit at eToro is $25, and all you have to do is cover the spread.

Where can you get Ethereum?

When investing in Ethereum, you might want to think about Binance or Coinbase, as both have a good reputation in the sector.  eToro, on the other hand, stands out for us because the regulated broker offers extremely low fees and a user-friendly platform that is suitable for investors of all skill levels.

Should I invest in Ethereum?

Some market analysts believe Ethereum has a bright future, particularly with the much-anticipated network upgrade to Proof-of-Stake planned later this year.  However, Ethereum, like all other crypto assets, is volatile and speculative, so there’s no assurance you’ll benefit.  Don’t invest more funds than you can afford to lose.

How can you invest in Ethereum safely?

Using an online broker that services US consumers is the safest approach to invest in Ethereum.  The SEC and FINRA have approved eToro in the United States, ensuring that you deal with a legal brokerage firm.

What is the procedure for withdrawing Ethereum?

When your Ethereum tokens are stored online with your preferred broker, go ahead and place a sell order.  After that, the broker will convert the tokens into cash, and then you’ll be able to withdraw.

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