Luis Pazos 
Thinking about buying Ethereum but feeling a bit overwhelmed? You’re not alone. Many people are interested in cryptocurrency but find the process confusing. While things have gotten easier over time, buying Ethereum still trips some folks up because the technology isn’t yet fully mainstream.
When you buy Ethereum, you’re actually purchasing “ether” or “ETH,” the currency used on the Ethereum blockchain. Essentially, you convert your regular money (fiat currency) into ether. This happens on a cryptocurrency exchange, and then you can either keep your Ethereum there or move it to a crypto wallet.
So how do you buy Ethereum, exactly? Let’s walk through the whole process.
Why Buy Ethereum? What’s the Potential?
Before diving into the steps, it’s essential to understand what Ethereum is and why it might be a good investment.
What Is Ethereum?
Ethereum is the second most popular cryptocurrency, right behind Bitcoin, and has a market cap around $135 billion. Created by Vitalik Buterin in 2013 and launched in 2015, Ethereum is a global, decentralized computing platform powered by blockchain technology. You can run applications and create smart contracts on it. Many NFTs are also minted on Ethereum.
You should know that when you invest in Ethereum, you’re buying “ether,” the currency used for transactions and gas fees on its network.
Why Should You Buy Ethereum?
People buy Ethereum for various reasons:
- As an investment, anticipating that its value will rise.
- To use the technology for smart contracts or minting NFTs on its blockchain.
Five Steps to Buy Ethereum
Ready to jump in? Here’s a step-by-step guide:
Step 1: Decide on Your Investment
How much should you invest in Ethereum? Financial experts usually recommend not putting more than 1-5% of your portfolio into cryptocurrency. Your exact investment will depend on your financial goals and risk tolerance. Ask yourself:
- Is this a one-time purchase?
- Will you buy a little bit regularly?
- Are you planning to hold it for the long term?
Step 2: Choose a Cryptocurrency Exchange
Nowadays, you can buy Ethereum easily using your smartphone. Your options include:
- Online Brokers: Buy cryptocurrency the same way you buy stocks.
- Centralized Exchanges: These are popular but be cautious of fees and scams.
Trusted options include Coinbase, Crypto.com, Binance, Kraken, and Gemini. These platforms are user-friendly and often offer educational resources.
Step 3: Open Your Crypto Account
You’ll need to create an account on a chosen exchange, which involves providing personal information and verifying your identity. Some platforms may ask about your investment knowledge as well.
Step 4: Fund Your Account
Once your account is set up, decide how to fund it. You can usually transfer money from your bank or use a payment card. Be aware of any fees if using a credit card. Once your account is funded, you can purchase Ethereum.
Step 5: Store Your Ethereum
Decide where to store your Ethereum. Options include:
- Crypto Exchange: You can keep your ether on the exchange but be aware of security risks.
- Digital Wallet: Transfer your ether to a digital wallet like MetaMask.
- Hardware Wallet: For maximum security, use a hardware wallet to store your ether offline.
How Should Ethereum Fit into Your Portfolio?
Figuring out how Ethereum fits into your portfolio depends on your financial goals and risk tolerance. If you’re looking to diversify and add some cryptocurrency exposure, Ethereum is considered one of the safer bets compared to speculative or “meme” coins like Dogecoin or Shiba Inu.
Is Investing in Ethereum Risky?
Sure, Ethereum can be volatile. It reached an all-time high in late 2021 only to fall significantly in 2022. Investing in such assets is risky, especially if you’re relying on short-term funds, like money set aside for a big purchase.
Bottom Line
Hopefully, this guide gives you a clear picture of how to buy Ethereum. Once you decide on your investment amount and choose a suitable exchange, the process becomes quite straightforward. Always remember, investing in cryptocurrency is risky, so only use money you can afford to lose. Good luck!
