Over the past few years, Ethereum has emerged as one of the most prominent players in the cryptocurrency environment. Some know it for being the second-largest digital token after Bitcoin, and the only crypto with real chances of overtaking the current leader by market cap. With every price spike that the crypto experienced, a new wave of supporters and followers came to swell the ranks of Ethereum devotees. Others have heard about it in the context of NFTs, as the platform that was at the forefront of the boom and that remains to this day the biggest market for non-fungible tokens.
If you plan to purchase Ethereum for the very first time, it’s less important how you came to know about it. What truly matters is if you’re ready to invest in it. According to experts, Ethereum is one of the best investment options you can choose from the entire list of active cryptos, being an already established digital currency that has proved its reliability and value in time.
Those who were smart or simply lucky to invest in Ethereum when the crypto was still in its infancy and held to it long enough managed to earn substantial profits, so they’re probably quite rich today. However, just because you haven’t been there from the very beginning, doesn’t mean it’s too late to start investing in Ethereum now. The ship has not sailed and you can still make it on board. But enough with the metaphors – let’s see what you actually need to do if you want to invest in Ethereum for the very first time.
What is Ethereum?
There are many different types of investments, each of them with unique characteristics, level of risk, and potential for return. If you want to be a responsible investor, before you make any decision, you have to know what exactly you’re investing in. So, it makes sense to learn as much as you can about the asset you’re interested in – in this particular case, Ethereum.
Ethereum is a decentralized platform powered by blockchain technology, mostly known for its native token Ether (ETH). As a peer-to-peer network, Ethereum acts as a distributed ledger that enables users to make transactions without the intervention of a third party. But Ethereum was designed to be much more than a medium of exchange. The platform stands out from its peers through its smart contract capabilities that support the development of a whole range of decentralized applications (dApps), providing limitless use cases. In order to build applications on the platform, developers have to purchase Ether tokens. The same thing applies to those who want to use these applications. Therefore, it’s not just the history and popularity of the platform but also its utility that make Ethereum such a promising investment option.
It also needs to be clarified that technically you’re not investing in Ethereum, but in Ether, since that’s the coin you’re going to purchase. The confusion stems from the fact that the two terms are normally used as synonyms, even though they designate different things.
Another important aspect that needs to be mentioned is that Ethereum, like any other crypto, is subject to constant price swings. So, you have to be aware of the risks you expose yourself to by entering a highly volatile market and investing in a digital asset whose value is influenced by so many hard-to-predict factors. That’s why experts recommend limiting cryptocurrency investments to around 5% of your overall portfolio and never putting more resources into it than you can afford to lose.
Investing in Ethereum – the process
After you’ve done your homework and got familiarized with the ins and outs of Ethereum, it’s time to actually learn how to buy ETH so you can start your crypto investment journey. Fortunately, the process is far less complicated than you may think, encompassing a few simple steps, as follows.
Choose a Crypto Trading Platform
Ethereum investments follow a different route than traditional assets where banks or brokerages facilitate the purchase. When it comes to digital currencies, transactions take place on a crypto exchange or trading platform.
Therefore, you have to open an account on one of these platforms where people buy and sell all types of cryptocurrencies. Fortunately, you have plenty of options to choose from, and since Ethereum enjoys great popularity in the crypto world, you can purchase Ether on most of them. However, it’s recommended to stick to reputable trading platforms and check their features and fees before you sign up.
Deposit Money into your Account
Once you’ve set up your account, you can move on to the next step, which is depositing money into your account. In order to do so, you’ll have to provide some personal information and transfer funds from a bank account, debit card, or some other method that’s accepted by the trading platform. The fees for funding your account will vary based on the method you choose.
After you’ve wired money into your account, you’re all set up to make your first Ethereum purchase. The process is easy and straightforward. All you have to do is select the ETH symbol on the exchange platform and then decide how much you want to invest. If you can’t or don’t want to buy an entire coin, you can purchase fractions of it, calculated as a percentage. Given that the crypto market is open 24/7, unlike the stock market, you can buy Ethereum anytime you want.
Store your Assets
The last step in the process is to store the assets you’ve purchased. You can keep your cryptos in the account you’ve opened on the exchange platform if you don’t want to trouble yourself with additional procedures, or you can store them in a digital wallet, for extra peace of mind. Both options are safe, but digital wallets usually provide a higher level of security, depending on their features.
Now that you know the basics, you can start investing in Ethereum responsibly and further explore the crypto sphere.