Ethereum- The 2nd Largest Cryptocurrency By Market Capitalization
There are several ways to trade Ethereum- the second-largest cryptocurrency, in global market capitalization. Typically, purchasing Ethereum entails converting a fiat currency into ETH or Ether- the currency that runs on the Ethereum blockchain. With Ethereum, you can use it as a means of payment for goods and services or when carrying out complex transactions.
Although Ethereum recorded an all-time high market capitalization at the end of 2021, it remains a risky asset with a highly volatile market value. With Ethereum edging closer to Bitcoin, the most traded cryptocurrency, it promises high yet risky rewards for investors. As such, it is vital that you first find the best ethereum trading platform to enable you to trade and grow your wealth.
Here are some tips on trading Ethereum and considering some aspects before investing in this fluctuating market.
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How To Purchase Ethereum
Purchasing Ethereum entails three major steps including;
1. Finding the best Ethereum trading platform
2. Deciding your means of payment
3. Storing your Ethereum
Finding the best Ethereum trading platform
Since it is among the most traded virtual currencies, several platforms for trading Ethereum, however, even with the wide array of exchange platforms available, it is important to conduct your research to avoid being duped by online scammers. Choosing a reliable cryptocurrency exchange platform such as PrimeXBT is important, especially for long-term investors.
Nevertheless, regardless of where you trade Ethereum, the speculative and volatile nature of cryptocurrencies makes it a highly risky asset with a relatively short track record compared to Stock markets. As a result, the rule of thumb requires investors not to invest more than 5% of their portfolio in cryptocurrencies. Below are some options for buying Ethereum
Online Stock Brokers
Although it is one of the simplest ways, purchasing Ethereum from an online brokerage service poses grave drawbacks. While you can cheaply and seamlessly trade Ether through online stock brokers, ensure that the brokerage service allows you to move the crypto in and out of the account. If you can’t- as seen in some brokers- it beats the logic of owning a virtual currency.
Centralized Crypto Brokers
Centralized agencies such as PrimeXBT offer a reliable avenue to trade Ethereum for experienced and inexperienced traders alike. Moreover, such platforms are user-friendly and feature larger selections than those dealing in conventional assets like stock. Centralized crypto trading platforms act as middlemen when trading Ethereum.
Decentralized Exchanges
Decentralized exchanges (DEX) offer a way to trade Ethereum without involving a third party or middleman. Unlike Centralized exchanges that require you to deposit the cash or coin you wish to trade, Decentralized agencies offer you total control over your funds by allowing you to transact with the seller or buyer directly.
On the other hand, while centralized exchanges are user-friendly, DEX platforms feature complicated navigation and are best suited for experienced investors. Additionally, DEX is preferably used for trading one cryptocurrency for another rather than cash.
How To Pay
You can trade cryptocurrency with another crypto or use a fiat currency such as dollars. Read more to understand the perfect option for you.
Fiat Currency
Like other goods, you can purchase Ethereum using the traditional fiat currency such as the United States Dollar. While some crypto exchanges allow fiat cash only, it is a widely used option, especially for those who don’t own cryptocurrency. You can fund your account using a credit card, bank transfer, or debit card when transacting via a centralized crypto exchange platform. Trading on some platforms will have you incur transaction fees.
Cryptocurrency
Some crypto exchanges will allow you to trade Ethereum with other cryptocurrencies. This offers an advantage for those who wish to purchase Ethereum without investing more savings in the crypto market. Similarly, it is a useful strategy if you own another crypto coin that has experienced an increase in market capitalization and you wish to diversify your assets. However, crypto-to-crypto trading can create complex tax situations.
Storing Ethereum
Like most other digital assets, you require a safe and secure way to store your Ethereum. You can store your Ethereum holdings on digital wallets or online marketplaces that sell them. Before choosing a crypto exchange, a major factor is how it stores cryptocurrencies. Throughout history, exchange platforms have fallen victim to hackers.
Final Thought
Thus, to trade Ethereum, the first thing you need to do is find the right platform for you. You must then choose the means of payment and buy the crypto using fiat currency. You will then be free to buy and sell Ethereum whenever you want
