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The beginner’s guide to buying Ethereum

Ethereum is an important component of non-fungible tokens.

Ethereum
Photo courtesy Rawpixel
Photo courtesy Rawpixel

Opinions expressed by Digital Journal contributors are their own.

Ethereum is an important component of non-fungible tokens and may be familiar to you. It is the second-most popular cryptocurrency, so you may want to consider joining in. Moreover, it recently set several new all-time highs.

Experts suggest it is one of two cryptocurrencies, and most beginners buy Ethereum (the other is Bitcoin) since Ethereum has a higher market cap than other lesser-known cryptocurrencies. 

If you have decided to include cryptocurrencies in your portfolio and are willing to accept the risks, here is how to begin. 

What is Ethereum?

Before purchasing coins, you must know precisely what you have invested in. While Ethereum has a price history that illustrates its use as a store of value, an interesting innovation is underway that illustrates its utility.

Developers can use Ethereum’s blockchain to create decentralized applications (also known as DApps). Ethereum’s associated token, ether (ETH), is required to access the network. To interact with a decentralized application, users must also purchase Ether.

Ethereum is a long-term investment, similar to bitcoin, that investors can accumulate and hope will increase in value over time. However, ether’s price will likely fluctuate over the short term, just like any investment in cryptocurrencies. 

Therefore, investors are advised to limit their cryptocurrency investments to less than 5% of their portfolio to avoid volatility and only to invest what they can afford to lose. 

What is the value of Ethereum?

Ethereum reached its most recent record high of $4,800 in November. Over the past year, the coin’s value has varied from $1,000 to $4,800. In the year since Ethereum’s last all-time high, its price has fallen. However, it was still much higher than the $1,000 range a year ago.   

Ethereum and other cryptocurrencies fluctuate greatly in price. Crypto investments are subject to price fluctuations. Investing in cryptocurrencies may not be the best option if you are concerned about short-term price fluctuations. 

Like any cryptocurrency, Ethereum’s value comes only from people’s belief that it is valuable. Therefore, the price of this product is not affected by media attention or proposed crypto regulations, as it is not linked to commodities and currencies. 

What is the best way to buy Ethereum?

  • Select a cryptocurrency exchange

Since cryptocurrency cannot be purchased from a bank or brokerage company such as Fidelity or Vanguard, you will need to use a cryptocurrency trading platform. These platforms are available in various forms, from basic to complex.

You can buy Ethereum from nearly all cryptocurrency exchanges, but we recommend Coinbase, Gemini, or eToro as the three most popular exchanges. Ethereum is also one of the few types of cryptocurrency you can purchase using platforms such as PayPal or Venmo. 

However, the platform’s fees, security measures, and features may vary, so it is advisable to do some research before signing up. 

  • Account Funding

Crypto exchanges require you to provide some personal information and verify your identity. Following that, you may fund your account using a debit card or a bank account. Charges may vary based on the method you choose.

Although funding your account does not indicate that you have purchased Ethereum, you do not want your cash to sit in your account untouched. Therefore, at this point, you will need to purchase Ethereum. 

  • Buy Ethereum

Once you have successfully credited your account, you can convert U.S. dollars into Ethereum. Enter the amount of USD you wish to convert into Ethereum. A single Ethereum coin is likely to be purchased based on the Ethereum price and the extent of your purchase. As you purchase, the amount will be displayed as a percentage of the total ether coin.

  • Keeping Your Ethereum Safe

Leaving a small amount of crypto in your exchange account is best if you only have a small amount of crypto. However, a digital wallet can offer more security if your holdings need to be moved to a more secure location. Digital wallets are different in their security levels, and a wide variety of them exist. 

Is Ethereum a wise investment?

Cryptocurrency is a highly volatile and speculative investment. You should be aware of the risks involved before investing. When considering the cryptocurrency, experts recommend staying with Bitcoin and Ethereum.

Never invest more than 5% of your portfolio. Only invest what you can afford to lose. You should also not sacrifice anything else, such as paying off debt or saving for retirement.

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Written By

George Nellist is a public relations, marketing and strategic brand expert who has executed social media and strategic marketing campaigns for a variety of Fortune 500 companies and small businesses. For more information, visit Ascend Agency.

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