Investing in Ethereum is your best bet, if you are just starting out in the crypto world. You might think of it as something only experienced traders can do but trust us that is not the case here. Trading Ethereum is much simpler than you can think of. Here are the first four steps to getting started:
1. Determine Your Risk Level
Every investment has some risk, but cryptocurrencies are particularly prone to fluctuations in value. Just think about how a few hundred characters could affect a cryptocurrency’s price: For instance, once Elon Musk declared that Tesla will no longer accept Bitcoin as payment, Bitcoin’s value fell by 15%.
Ethereum has historically had both remarkable returns and catastrophic falls, sometimes in quite brief periods of time according to the bitcoin loophole. Notably, the price dropped from a peak of about $4,000 per coin in May 2021 to under $1,800 in June 2021. If you had invested at the peak, a month later you would only have half the value. That’s a really high level of volatility. Therefore, it’s important to consider diversification as well as your risk tolerance and stability of the rest of your financial portfolio before investing in ethereum.
2. A Cryptocurrency Exchange
It’s a little trickier to buy ether than it is to buy stocks or mutual funds using your current brokerage account. Major exchanges like the New York Stock Exchange (NYSE) do not now allow cryptocurrency trading, and many brokerages do not currently provide cryptocurrency investing like the bitcoin loophole.
Create an account on a cryptocurrency exchange before you may purchase cryptocurrency. Practically, it is identical to the brokerage systems you may be more accustomed to: Buyers and sellers can trade dollars or other fiat currencies for cryptocurrencies like Ethereum, Bitcoin, or Dogecoin on cryptocurrency exchanges. Most exchanges have a straightforward purchasing interface for new users, even if it could have greater costs than their trading platform. However, other exchanges have more complicated trading platforms.
3. Fund Your Account
You must fund your account before you can purchase Ethereum through a cryptocurrency exchange like the Bitcoin loophole. You can link your own bank account with your crypto account where you can easily make a bank transfer or use debit cards or paypal, etc to make deposits. Review the fees associated with the crypto exchange before picking a funding method; they can differ depending on the method. For instance, Gemini offers free wire transfers, while debit card transfers are subject to a 3.49 percent tax.
One word of caution: A credit card may be used to purchase cryptocurrencies on some platforms. Although it could seem alluring, credit card providers typically view bitcoin purchases as cash advances. You can also be subject to a higher interest rate and a cash advance fee from your card in addition to the fees levied by the bitcoin exchange.
4. Purchase ETH
The market hours restrict your ability to purchase stocks, mutual funds, or exchange-traded funds (ETFs). Ethereum and other decentralized cryptocurrencies operate substantially differently in that you can purchase and sell them whenever you want.
Enter the desired purchase amount together with Ethereum’s ticker symbol, ETH, in the exchange’s buy area to purchase Ethereum. You can buy a portion of an Ethereum token if you don’t want to buy a full one or don’t have enough money in your account to do so. If Ethereum is worth $2,000 and you invest $100, for instance, you will purchase 5% of an Ether token. This is comparable to buying a fractional share of stock. But if you want your cryptocurrency to be secure, you can select between two different kinds of third-party wallets:
Hot Wallet
A hot wallet can be accessed via smartphone or computer via the internet. They’re useful and often provided at no additional cost by bitcoin exchange platforms, but if you choose to keep your cryptocurrency off of the exchange, you can also use your own.
Cold Wallet
In contrast, cold wallets have no connection with the internet. They are external devices. They typically cost between $50 to $200 depending on the type you select, though there are even more expensive variants available. Cold wallets are safer than hot wallets and may make sense if you keep a significant quantity of Ethereum or other cryptocurrencies, despite the fact that you have to physically connect to the internet each time you wish to access your coin.
Our Final Words
We understand it could be intimidating for newbies who are just starting out in the crypto world. But it is not as difficult as it seems in the beginning. All you have to do is to do a thorough market research, re evaluate your financial goals and see if you can afford to invest in cryptocurrency at this point in time. If you can do it then follow the steps mentioned above to help you successfully invest in crypto.