With a market capitalization of more than $232 billion, Ehtereum is one of the leading cryptocurrencies on the market today. In fact, it falls behind Bitcoin only in terms of the value of its coins that are circulating.

Plus, with Mark Cuban and other business leaders getting behind Ethereum, a lot of people are confident in the future of this investment. It has already proven to be profitable so far. According to Forbes, if you invested $1,000 in August of 2015, fast forward six years, and it would be worth an insane $2.23 million!

It’s not too late to get involved in purchasing Ethereum, though, so you don’t need to feel like you have missed the boat. Below, we will take you through the steps to follow to purchase Ether, which is the official name for the token that we commonly refer to as Ethereum.

1. Establish Your Risk Level

There is only one place to begin, and this is by addressing risk. There are no guarantees when investing in cryptocurrency, so it is critical to keep this in mind. After all, cryptocurrencies are especially vulnerable to fluctuations in price.

You only need to look at what happened when Elon Musk tweeted that Bitcoin was no longer an accepted payment form for Tesla. This saw the value of the coin decrease by about 15 percent.

Although there have been some impressive returns on there in the past, there have also been some considerable crashes. A number of these crashes have happened in unbelievable short periods of time as well.

A notable example of this happened only this year. In May 2021, the value of Ether went from an almost high of $4,000 per coin to less than $1,800 in the following month. If you had purchased the coin in May, you would be sitting with less than half of the value in June. In September, the price sat at almost $3,800. That’s some significant volatility.

This shows why it is critical to think about your risk tolerance, as well as the stability and diversity of the rest of your investment portfolio, prior to purchasing Ehtereum. Experts recommend that you never invest more money in cryptocurrency than you can afford to lose.

2. Select A Cryptocurrency Exchange

Next, purchasing Ether is a little bit more complex when compared with purchasing mutual funds or stocks through your existing brokerage account. The New York Stock Exchange (NYSE) and other major exchanges do not provide a medium for cryptocurrency trading, and a lot of brokerages do not provide crypto investing at present.

If you want to purchase Ethereum, you will first need to create an account on a cryptocurrency exchange. Speaking practically, it is just like the brokerage platforms that you may be more familiar with: cryptocurrency exchanges enable sellers and buyers to exchange flat currencies, like dollars, for cryptocurrencies like Dogecoin, Bitcoin, and Ethereum.

If you do not have a cryptocurrency exchange in mind already, Coin Market Cap has a list of the top cryptocurrency exchanges ranked by volume. Spend your time researching them so you can find the best one for you.

Though some of the trading platforms on cryptocurrency exchanges are complicated, most provide a simple purchase interface, which is very easy for beginners. However, some may charge higher fees when compared with the trading platform.

There are a few key points to keep in mind when selecting a crypto exchange. Look for an exchange that gives you a crypto wallet so you can store all of your investments.

The vast majority of cryptocurrency exchanges will provide a wallet but do not simply assume that this is going to be the case. You will need to find a crypto wallet yourself if your exchange does not provide one.

If you are a true beginner, you can always opt for a platform like Cash App or Robinhood. This will ensure that the crypto purchasing process is greatly simplified for you. However, it does come at a hidden cost, so you do need to keep this in mind.

If you go for one of these options, you are not going to be able to withdraw your investment of Ether to pay for online purchase or put it in a third-party wallet. Utilizing one of these simplified platforms is going to mean that you can only use your Ethereum to trade it on that platform.

You would then need to cash it out and then re-purchase it on a crypto exchange to hold it in a different wallet.

3. Fund Your Account

Before you can purchase Ethereum through a cryptocurrency exchange, you must fund your account.

In a lot of cases, you will simply deposit money from a bank account, such as your savings account or personal checking account. However, you can also generally complete with PayPal, debit cards, or a wire transfer.

When selecting a funding method, make sure you check out the fees on the crypto exchange first, as they will typically vary based on the method.

For instance, when using Gemini, wire transfers are free. However, if you use your debit card, you can expect a 3.49 percent fee on your transfers.

There are some platforms that will give you the ability to purchase cryptocurrency utilizing a credit card. While this may appear tempting, credit card businesses will typically deem cryptocurrency purchases to be cash advances.

Depending on the sort of credit card you own, you may have to pay a higher interest rate, as well as a cash advance fee on top of the cryptocurrency exchange’s fees.

4. Purchase Ethereum

When you are purchasing exchange-traded funds, mutual funds, or stocks, you are restricted to market hours.

Take Nasdaq as a prime example. Their trading hours run from 9.30 am until 4.00 pm ET, and the exchange is closed on certain holidays and weekends.

Ethereum and other cryptocurrencies work in a different manner. This is because they are decentralized currencies, and so you can purchase them and sell them around the clock.

To buy Ethereum, input the ticker symbol, which is ETH, in the “buy” field in the exchange and then input the quantity you wish to purchase.

If you do not want to purchase a full token or you do not have sufficient funds in your account for a complete coin, you could buy part of one.

For instance, let’s say the full price of Ethereum is $3,000, and if you want to invest $150, you can buy 5% of an Ether coin. This works just like it would if you were to buy a fractional share of stock.

You can use any sort of payment you wish, for example, you can buy ETH with a bank transfer or you can use your debit card.

5. Store Your Ether

After you buy Ether and the purchase has been processed, you will need to store your cryptocurrency.

There are some platforms that will store Ethereum for you. However, some people decide that they want to store their investments themselves so that they can lower the likelihood of losing their cryptocurrency to a hack.

While we can understand that you would want to do this, it is critical to be aware of the fact that most of the main exchanges will ensure your holdings. Plus, they will typically store most of the assets online to ensure massive theft is prevented.

What’s more, exchanges that have been hacked historically have tended to reimburse any losses, although this is not guaranteed.

If you do want to benefit from the peace of mind of being responsible for storing your own crypto, there are two options available: a cold wallet or a hot wallet. Let’s take a look at both so you can get a better understanding:

• Cold Wallet – Cold wallets are external devices that are not connected to the Internet. Depending on the sort of cold wallet you select, they will typically cost somewhere from $50 to $200, yet there are even more costly options available. While cold wallets are not the most convenient, as they need to be manually connected to the Internet every time, they are safer, and they make a lot of sense if you are going to store a considerable amount of cryptocurrencies.
• Hot Wallet – Hot wallets, on the other hand, are Internet-connected, and you can access them from your smartphone or computer. They are very convenient and are typically provided by cryptocurrency exchange platforms at no added cost. However, you can also use your own if you want to have your cryptocurrency off of the exchange. However, as they are still connected to the web, the risk of a security breach is greater.

Final Words On Purchasing Ehtereum

So there you have it: everything you need to know about purchasing Ehtereum. We hope that this guide has given you a better understanding of the steps to follow if you want to purchase Ether for the first time.

It is vital to make sure that you don’t worry too much about how much other people are investing. Think about the level of risk you are comfortable with, and base your decisions on this.

Read Also:

• How to Invest in Bitcoin
• Why Cryptocurrencies Are Important for Your Business Financial Needs?