While Bitcoin is the top cryptocurrency based on the value of its coins in circulation, Ethereum is no slouch. With a market capitalization of over $232 billion USD, it’s the second leading form of cryptocurrency and has support from business leaders like Mark Cuban.
What’s more, it’s been a profitable investment choice. If you invested $1,000 USD in Ethereum in August 2015, your investment would be worth a staggering $2.23 million USD almost six years later.
Here’s how to get started buying Ether, the official name of the token more commonly called Ethereum because of its association with the Ethereum platform that it powers.
How to Buy Ethereum
Investing in Ethereum may be easier than you think. Here’s how to get started in just five steps:
1. Determine Your Level of Risk
There’s no getting around it; buying Ethereum can be a gamble. While all investments have some risk associated with them, cryptocurrencies are especially vulnerable to price fluctuations. Just think about the impact a couple of hundred characters can have on crypto pricing: After Elon Musk tweeted that Tesla would no longer accept Bitcoin as payment, for instance, the coin’s value tumbled 15%.
Although Ether has had impressive returns in the past, it’s also had some significant crashes, sometimes in astonishingly short amounts of time. Notably, it went from a high of almost $4,000 USD per coin in May 2021 to less than $1,800 USD in June 2021. If you had bought in at its high, you’d be sitting with half that value just a month later. That’s some pretty extreme volatility.
That’s why it’s important to consider your risk tolerance along with the diversity and stability of the rest of your investment portfolio before buying Ether. Experts recommend that you never invest more in crypto than you can afford to lose.
2. Choose a Crypto Exchange
Buying Ether is a little more complicated than just buying stocks or mutual funds through your current brokerage account. Cryptocurrencies aren’t traded on major exchanges like the Toronto Stock Exchange (TSX), and many brokerages don’t offer crypto investing.
To buy crypto, you have to first create an account on a crypto exchange. Practically speaking, it’s just like the brokerage platforms you may be more familiar with: Crypto exchanges allow buyers and sellers to exchange fiat currencies—like dollars—for cryptocurrencies like Ethereum, Bitcoin or Dogecoin. If you…