How to Buy Ethereum (ETH or ETC)
Understand how you can buy Ethereum, the crypto currency, online in minutes through a regulated Bitcoin exchange or a CFD broker using your credit card, debit card or PayPal.
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To buy Ethereum online, you can either turn to a crypto-currency exchange or a CFD broker. This article discusses the pros and cons of each approach in more detail.
Buy Ethereum through a CFD broker
You can invest in Ethereum through a CFD broker such as AvaTrade.com, FxPro.com, HYCM.com as well as eToro.com. When you "buy" Ethereum through a CFD broker, you won't actually the underlying asset. This may come as a surprise to you. Instead, you are speculating on the price of Ethereum against either the US Dollar or, in some cases, the Euro.
- Go long or short: with an Ethereum CFD, you may either go long or short. This enables you to profit in a rising market if you are "long", or profit in a falling market, if you are "short"
- Fractional ownership: enables you to buy a fraction of Ethereum, rather than a set number of units outright. This could be of interest if your budget is constrained.
- Leverage: allows you to borrow money from your broker to finance your purchase, usually with the click of a button.
If you leverage your trades, you should expect to pay your broker interest on your borrowings. This form of interest is known as "swap fees" in the industry's jargon. They may be either positive or negative, depending on the direction of interest rates. You should enquire about these fees with your broker.
Leverage will increase both your potential gains and losses. This is true of all investments. However, this is accute in the case of crypto-currencies, whose prices are volatile.
Buy Ethereum through an exchange
If owning Ethereum is important to you, you should buy the crypto-currency through an exchange or directly from someone else. When you invest in Ethereum through a crypto-currency exchange, you'll swap your account's base currency (typically US Dollars, Euros or Pounds) for Ethereum. Once the exchange is done, you'll own Ethereum. You can either store your crypto with the exchange, or make transfer to a digital wallet.
You will find an updated list of the largest crypto-currency exchanges on Wikipedia. You may also buy Ethereum directly from eToro.com, the world's largest social trading platform (except if you are an Australian resident, in which case you may only buy a CFD).
- Go long: when you own Ethereum, you can only profit from increases in the price of the crypto-currency. However, you stand to lose if Ethereum's price falls, unless of course you are willing to hold on to your investment until you have turned a profit.
- Theft: crypto-currency exchanges have often fallen prey to attacks. Mt. Gox, which was at one time the world's largest Bitcoin exchange, filed for bankruptcy after a large theft which resulted in the loss of 6% of Bitcoins in circulation at the time. Security practices remain lax across many crypto-currency exchanges and wallets.
- Slow: it can take many days to open and fund an account with an exchange, unless you live in the USA. This can be a genuine problem if you are looking to make a quick trade to advantage of sudden price changes.
What is Ethereum?
Like Bitcoin, Ethereum is an open-source platform underpinned by a blockchain in which every transaction is recorded publicly. Ethereum comes with an internal cryptocurrency known as Ether. Ether can be transferred between accounts and used to compensate participants for computations performed on the network.
Although the price of Ether has lost around 70% in the year to date to trade around $200 today in October 2018, it remains popular with enthusiasts who continue to believe in its technological potential.
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