Learn how to buy Ether, where to do it and what you need to know before investing. Let’s get started!
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What is Ethereum?
Ethereum is a decentralized blockchain network powered by the Ether (its own currency) token that allows users to make transactions, earn interest on their holdings, use and store non-fungible tokens (NFTs), exchange cryptocurrencies and much more.
Where to buy Ethereum?
One option to buy Ethereum is to use cryptocurrency exchanges or brokers. The most recommended are usually eToro, Bitstamp or Crypto.com, and particularly in Argentina, SatoshiTango and Ripio.
You must first open an account and transfer funds, then you can get the cryptocurrency and use it for online purchases, as an investment or to transfer to another user.
You can also make transactions with your Ether (buy, sell, transfer) through digital wallets.
How to buy Ethereum?
The step by step to buy Ethereum is:
- Define your acceptable level of risk
- Choose a marketplace and create an account
- Send funds to your account
- Buy Ethereum
- Save your Ethereum in a wallet
Let’s look at each item in detail:
Define your acceptable level of risk
Just like with any cryptocurrency, buying Ether is a speculative and highly volatile investment. According to eToro, as of November 2022 its price is at $1,550, drastically reducing its value compared to 2021, where it reached the record figure of $4,864. Optimists estimate that by the end of this year its value will be at $2,500 and that with its new update it will exceed $3,000 in 2023. However, the truth is that no one can predict its value in the future.
That is why, if you are willing to assume greater risk for the possibility of obtaining substantial rewards, Ethereum may be the right investment for you.
We suggest researching before investing, and then not risking more than you are willing to lose.
Choose a marketplace and create an account
If you are interested in buying Ethereum, you must first choose a Marketplace and open a cryptocurrency exchange account. In the virtual market there are around 500 examples to choose from and most are usually very easy to use.
It is important that the Marketplace chosen offers a cryptographic wallet to store, send and receive different coins and tokens.
For inexperienced investors, there are also platforms like Robinhood or Cash App, which simplify the purchase of cryptocurrencies. Their great disadvantage is that they only allow transactions within the platform, they do not allow the investment to be withdrawn.
Send funds to your account
In order to start buying Ethereum you will first need to verify your identity and then deposit money into your account. This can be done from your bank account (checking or savings account), through a transfer, or through platforms like PayPal.
Keep in mind that each method has a different fee, check the conditions of the platform where you have your exchange account.
Buy Ethereum
Once your account has funds, you can exchange them for Ethereum. You will simply need to select its quotation symbol (ETH) in the “buy” field of your exchange account and enter the amount you wish to buy.
You can buy the entire currency or only a fraction. Just like when buying stocks, any amount of Ether you buy will be displayed as a percentage of the total Ether currency. For example, if a currency is worth $3,000 and you buy $1,500, you will buy 50% of Ether.
Save your Ethereum in a wallet
Now it’s time to store your cryptocurrencies, and for that we recommend using a digital wallet. There are those who leave their investment in their exchange account, but it is likely that a wallet is a safer storage.
There are many types of wallets that can be grouped into physical wallets (hardware) or cold wallets, which are storage devices that work offline; or digital wallets (software) or hot wallets, whose storage is performed on devices connected to the Internet.
Your choice will depend on the level of security you need and the type of investment you make.
For more information on digital wallets, you can visit our Ethereum Wallets for Beginners Guide.
How to sell Ethereum?
To sell Ethereum, simply go back to your cryptocurrency exchange account and enter the amount of ETH you want to sell.
Keep in mind that the sale of your Ether is taxed, that is, they perceive taxes. Did you know? Although cryptocurrencies were designed to be decentralized and free from government supervision, they have been taxed since 2014.
If you sell your cryptocurrencies and make a profit from it, the Internal Revenue Service will charge you taxes on that capital gain.
The good news is that, as the tax applies to the gain, if you sell your currency for less value (that is, you are at a loss), you will not have to pay any tax.
Is it safe to invest in Ethereum?
Ethereum has long been the focus of attention of cryptocurrency investors. It is the second most popular currency after Bitcoin and, according to Criptonoticias, there are currently no less than 120 million Ethers in circulation.
It is logical that you wonder should I invest in Ethereum? And the answer is that … it depends.
What does it depend on? How much capital you invest and when.
As we said, there is no investment that guarantees a profit, but in particular digital assets are very sensitive to price fluctuations and their future value is likely to have many ups and downs.
Considering this volatility, you can initially bet a small percentage of your funds to diversify your investment strategy. Experts recommend no more than 5%.
When to invest in Ethereum will depend on the context, as its price can be affected by its own conditions, those of its competition and the market in general. For example, with The Merge – its new update – it is expected to increase its value towards the end of 2022 but the truth is that nobody knows what will happen.
Many investors prefer to make a long-term investment (holding) in the hope that its value will continue to increase over time and others take risks by trading, buying and selling frequently.
We recommend that before you buy, you investigate your own finances and observe market trends. Consulting with experts could also be a solution to make the most appropriate decision for you.