How to Invest In Ethereum In 2024

4 Ways to Invest in Ethereum

There are a variety of ways to invest in Ethereum, and all methods can be used with or without leverage.  Here are four of the most prominent ways to purchase the token.

1. Buy Ethereum Through an Exchange

The first way that you can purchase Ethereum is through an exchange. Cryptocurrency exchanges are widely available online, and are probably the most popular way to purchase digital assets in general.

While digital exchanges typically feature their own storage facilities, it is always advisable to purchase a hardware wallet when dealing with cryptocurrency. There are many of these available, and the following are examples of hardware wallets that are compatible with Ethereum.

• Exodus
• Electrum
• Mycelium
• Ledger Nano X
• Trezor Model T
• Ledger Nano S

You can also use a software wallet since hardware wallets are expensive. For regular trading, a software wallet that is always connected is a better option, but for long-term storage of assets, a cold hardware wallet is generally the best option.

To purchase Ethereum via a cryptocurrency exchange, it is first necessary to register with the exchange of your choosing. The registration process requires you to register by meeting the terms and conditions associated with that particular platform.

Generally, this will include confirming your identity, via procedures that are referred to as Know Your Customer (KYC). This involves providing suitable documentation, which usually includes government-issued identification documents, as well as proof of address.

While cryptocurrencies continue to retain the privacy of the individual, increased regulation of the space has meant that exchanges are far more professional than perhaps was the case when cryptocurrencies were first launched.

2. Buy Fractions of Ethereum Through an Exchange

It is not necessary to purchase an entire coin or token via exchanges, with fractional purchases also being possible. This doesn’t apply to every cryptocurrency, but Ethereum is one of those coins where fractional purchases can indeed be made.

Most exchanges will allow purchases in the region of 0.01 Ethereum tokens, which currently amounts to approximately $20.

3. Trade Ethereum Through a Broker

Another option for those intending to invest in Ethereum is to trade ETH via a broker. Most brokers will be available online as a digital service, and it is important to understand that the process associated with the broker is significantly different to that of an exchange.

Digital currency brokers act as intermediaries between investors and the market, offering both services and expertise. Brokers should be particularly informed when it comes to the cryptocurrency market, and able to dispense both wisdom and understanding to users, while also making trades on their behalf.

Online brokers are therefore extremely popular and are particularly well-suited to those investing in cryptocurrencies for the first time. While brokerages used to be relatively rare and were used by regular market participants, this no longer applies today. Brokers are widely available online and are an excellent option for beginners.

It is also important to note that choosing a broker diligently is particularly important. When conducting this process, you should ensure that the credentials of your broker indicate a higher level of competence, while sophisticated security systems also need to be in operation. You should also ensure that you can access your crypto broker platform 24/7 via desktop and mobile apps.

4. Invest in an Ethereum ETF

Another option for those trading Ethereum is to opt for an ETF (Exchange Traded Fund). These can be used to trade cryptocurrencies through the traditional market, and also feature the particularly useful function of collecting several tokens together into a singular tradable asset.

ETFs track these baskets of assets and enable open trading on the stock exchange. They are subject to fluctuations in price during the day, as investors buy and sell. Blockchain ETFs tend to be extremely popular and are an excellent option to trade Ethereum through as well.

What to Consider Before Investing in Ethereum

There are a variety of issues to consider before investing in Ethereum. We will go over some concepts in this section of the article.

Fees

Gas fees are paid in Ethereum’s native currency, ether (ETH). Gas prices are denoted in Gwei, which itself is a denomination of ETH—each Gwei is equal to 0.000000001 ETH. As you can probably imagine, this can be a relatively negligible amount of money. Exchanges will also charge fees in relation to Ethereum transactions, but these are usually roughly around 0.1%.

Risks

There are several risks associated with investing in cryptocurrencies. And the first of these is that the market is highly volatile compared to many other asset classes. This can be an advantage, leading to big profits from relatively small investments, but it can also, naturally, result in the opposite as well.

Another issue with cryptocurrencies is that they remain relatively unregulated. Both governments and central banks have been involved in crypto regulation in recent years, and the situation has certainly improved. But they are not as regulated as other aspects of the financial system, with debates continuing over whether they should be regarded as commodities or virtual currencies.

Cryptocurrencies can also be vulnerable to theft and hacking, while hard forks and discontinuation can also cause problems for cryptocurrency investors. CFD contracts associated with cryptocurrencies are also highly speculative, and can result in both massive gains, but also huge losses when not used diligently.

Payment methods

There are several payment methods associated with Ethereum. Considering the popularity of cryptocurrency, most fiat currencies are supported, as are such payment methods as PayPal, Neteller and Skrill. Bitcoin can also be exchanged for Ethereum.

Why Invest in Ethereum?

There are several viable reasons to invest in Ethereum. Firstly, the cryptocurrency niche is growing, and is expected to expand still further in the future. Considering that Ethereum is one of the most established tokens, this makes it a good investment option as per veteran investors and traders.

Ethereum has also expanded on the functionality delivered by Bitcoin, meaning that it is poised to match, or even exceed, this pioneering cryptocurrency.

The market position of Ethereum also seems to be extremely strong. Ethereum has outperformed a majority of cryptocurrencies in the past few years which is undoubtedly encouraging for investors.

Summary of Investing in Ethereum

Ethereum has been one of the major success stories of cryptocurrency, thanks to its technological improvements that have led to a faster blockchain than the market-leading Bitcoin. This means that institutional money has flowed into Ethereum, making it popular among the investment community.

There are many different ways to take advantage of the potential of Ethereum, with several trading strategies available. And there is no barrier to entry for beginners either, with algorithmic traders ensuring that entry to the cryptocurrency market, and Ethereum investing in particular, is possible for anyone.

The investment risk can be suitably managed by using some investment strategies such as hedging. Other strategies like day trading aim to take advantage of price movements around-the-clock. Check out our Ethereum price forecast guide for more information on future price movements.