After Bitcoin, Ethereum (Ether) is the crypto currency with the largest market capitalization. The Ethereum exchange rate has rallied strongly in recent months. If you jumped on the bandwagon in time, you could turn a few hundred euros into several million. But what is behind Ethereum and how can you as an investor buy Ethereum?
Ethereum is a promising crypto currency
Ethereum is a success story that has no equal. Ethereum’s share price has climbed significantly faster than Bitcoin’s since its launch. While the best known crypto currency has been around since 2009, Ethereum did not see the light of day until mid-2015.
After a somewhat sluggish start, the Ethereum share price received a strong boost in 2017: While in January 2017 there were only nine dollars for an ethereum, an ethereum a few months later already cost more than 300 US dollars – an increase of more than 3,300 percent. On some days Ethereum now has a higher trading volume than Bitcoin.
Similar to Bitcoin, Ethereum is also based on blockchain technology. All transactions are written decentrally into the blockchain, so that all processes can be traced by any user at any time – this is to prevent manipulation, independent of institutional institutions.
Many experts predict a great future for Ethereum, for example Ronnie Moas, founder and analyst of Standpoint Research. According to Moas, the charts of the 20 largest crypto currencies in ten to 15 years could look exactly like the current charts of Amazon, Apple, Facebook, Google, Netflix or Tesla. These promising prospects are arousing the interest of more and more private investors in crypto currencies. There are several ways to buy the digital currency Ethereum. In the following we will discuss the advantages and disadvantages.
Buy genuine Ethereum
Crypto currencies were originally the answer of computer specialists to the monetary policy of central banks. Independently of state capital controls, Bitcoin, Ethereum & Co. were to be used to make anonymous payments. Payments should be made anonymously. Investors who attach particular importance to remaining anonymous should therefore invest in genuine Ethereum. The prerequisite for this is a so-called wallet.
A wallet is an electronic wallet and comparable to a current account. With a wallet you can make transfers and receive digital money. A transfer with Ethereum is basically no different from a conventional bank transfer, but you need a receiving address instead of an account number. There are hardly any fees because the digital currency is sent directly from person to person without an intermediate instance.
If you buy Ethereum from different providers, all Ethereums can be combined in one wallet. For everyday use, you can set up an Ethereum Wallet on your smartphone, but you can also store your electronic wallet on your tablet or PC.
Please note: Once you have downloaded an Ethereum Wallet and saved it on your device, you will be able to save it to your wallet.
Who would like to buy Bitcoin or Ethereum, can do this also on a so-called Ethereum or Bitcoin market place. The best known German provider is bitcoin.de. Here users can trade directly crypto currencies among themselves and with each other, the price results from supply and demand. Usually the prices are so relatively favorable for market place users.
As soon as an offer of a user is accepted by another user, the business comes off. Depending on the marketplace, this process costs a small fee, which is divided equally between the buyer and seller. As a rule, this fee is lower than the fee in exchange offices.
The best known digital currency Bitcoin and Bitcoin-Cash have long been tradable on bitcoin.de. Since short also the trade with Ethereum was added – however still in the closed beta test, the trade is thus so far not accessible to each user of the platform. In order to be able to act over bitcoin.de, investors should have an account with the Fidor bank. You should therefore take into account the time required to open an account including the video identification procedure.
Ethereum stock exchanges
There is another way to trade crypto currencies: Ethereum and Bitcoin exchanges (bestbitcoinexchange.net). Some of the best known exchanges are CEX.IO, Kraken and Bitstamp. You should note that the prices for Bitcoin, Ethereum & Co. on different trading platforms differ greatly from each other.
Trading on the stock exchanges works like this: you exchange conventional currencies such as US dollars or euros for ethereum. You simply specify how many coins or tokens you want to buy or sell at which price. If the exchange finds a suitable offer, the order is executed and credited to the customer. This is comparable to trading conventional securities such as shares or ETFs. Settlement is particularly easy on CEX.IO, where investors can also pay with credit cards such as VISA and MasterCard.
Tip: In contrast to the marketplaces described above, trading on the Ethereum exchanges is automated.
The easy way: Ethereum as CFD
Do you only want to participate in the value development of Ethereum? Then you can trade relatively easily through a CFD Broker Ethereum. As with a security, with an Ethereum CFD you participate directly in the development of the Ethereum price. If the exchange rate of the Internet currency rises, the value of your Ethereum CFD also rises.
- With an Ethereum CFD, you do not physically own the crypto currency, so you do not own any digital coins or files.
- You can leverage your Ethereum CFD for this.
- If you leverage the factor 30, your Ethereum CFD will rise or fall 30 times as much as the “normal” Ethereum rate. Participation in a ratio of 1:1 without leverage is of course also possible.
A big advantage of the crypto CFD is that you get your money back quickly and at any time in the event of a sale. At various Bitcoin exchanges (for example bitcoin.de), however, there are daily payout limits. A payout of the capital can drag on there over several days. If you want to buy or sell Ethereum as a CFD, you can use eToro, for example. eToro offers credit card and PayPal deposits and transactions are executed immediately.
Of course you can also use any other CFD broker of your choice. Our CFD Broker Comparison and our Crypto Broker Comparison will help you find the right provider for you. The CFD Trading Guide will give you more information on trading CFDs.
Participate in the Ethereum course: The Ether Certificate
- If you want to buy crypto currencies but don’t want to open an account at a marketplace, you can also buy coins or tokens directly on the stock exchange.
- You can then participate in the development of digital currencies via a certificate. As with stock trading, you will need a securities custody account.
- A free securities custody account with excellent conditions is offered by www.finanzen-broker.net, among others.
- There you can invest in Ethereum by purchasing the participation certificate from XBT.
How can you buy Ethereum offline?
Not only can you buy Bitcoin, Ethereum & Co. via the Internet, you can also buy digital currencies offline for cash. Different platforms mediate meetings between private individuals, potential buyers, and traders, potential sellers, in the area. At Bitcoin-Treff.de, for example, Bitcoin investors can meet. But beware: trading is anonymous and unregulated. Select yourselves your trade partner thus completely exactly.
In the entire German-speaking area there are also regular meetings at which fans of crypto currencies exchange information about current developments and investment opportunities. Often these so-called Meetups provide opportunities to trade Ethereum, Bitcoin or one of the many other Internet currencies.
Occasionally there are even crypto automats, at which – comparable with a cigarette automat – Ethereum, Bitcoin & Co. can be “pulled”. For this you need the wallet described above, because you do not get an ethereum in physical form, for example as a coin, the digital money is rather stored in your virtual purse on the smartphone.