Invest In Ethereum – How To Invest In Ethereum For Beginners
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Ethereum is the second-largest cryptocurrency in terms of market capitalization. The digital asset – which specializes in smart contract technology backed by the blockchain protocol, allows you to diversify against other leading cryptocurrencies such as Bitcoin and XRP.
In this guide, not only do we show you how to invest in Ethereum – but we also discuss the best cryptocurrency brokers in this marketplace.
Table of Contents
#1 Broker to Invest in Ethereum – eToro
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Mobile AppYes
How To Invest in Ethereum – Choose a Broker
If you want to invest in Ethereum in the US in a safe and low-cost manner – you’ll need to choose a suitable cryptocurrency broker. Below you will find a list of the best Ethereum brokers currently serving US clients.
- eToro – Overall Place to Invest in Ethereum in the US
- Coinbase – Great Way to Invest in Ethereum for Beginners
- Binance – Best Place to Invest in Ethereum for Asset Diversity
- Robinhood – Invest in Ethereum via a Regulated Mobile App
- Webull – Invest in Ethereum From Just $1
You will find a detailed review of the above Ethereum brokers further down in this beginner’s guide.
How to Invest in Ethereum – A Quick Guide For 2021
If you wish to skip our comprehensive guide and simply want to invest in Ethereum right now – the quickfire overview will show you how to do this in under five minutes. For our walkthrough, we are showing you the ropes with eToro – a regulated broker and low-cost broker with over 20 million clients.
- Step 1: Open an Account with eToro – You can register an eToro account in under two minutes by providing your name, home address, date of birth, social security number, and contact details.
- Step 2: Upload Your ID – To remove account limitations, upload a copy of your government-issued ID. The KYC process at eToro is automated, so you’ll be good to go in under a minute.
- Step 3: Deposit Funds – You can now deposit funds with a debit/credit card, Paypal, or bank wire. There are no deposit fees for US clients and the minimum stands at just $50.
- Step 4: Invest in Ethereum – The final step is to search for ‘Ethereum’ and click the ‘Trade’ button. After entering your investment amount ($25 minimum), click the ‘Open Trade’ button to complete your Ethereum purchase!
eToro will instantly execute your Ethereum investment for you at the next best available price. You don’t need to worry about getting yourself a wallet to store your investment, as eToro offers an in-house wallet. This means that you can keep your ETH tokens in your eToro portfolio until you are ready to sell – hopefully at a profit!
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
Where to Buy Ethereum – Full Broker Reviews
Not only are there hundreds of cryptocurrency exchanges available in the online domain – but virtually all of them support buy and sell markets on Ethereum. After all, the digital token is the second-largest crypto asset in terms of market capitalization.
This can make it slightly challenging to know which broker to use when investing in Ethereum – which is why we have provided comprehensive reviews of the best providers in this space.
Be sure to read through each review to ensure you select the best Ethereum broker for you!
1. eToro – Overall Best Place to Invest in Ethereum
If you’re looking for the best place to invest in Ethereum in the US – look no further than eToro. This brokerage site – which was first launched in 2007, now serves over 20 million people. The broker is particularly popular with newbie investors that have little to no experience in the cryptocurrency space. In fact, even if you have never previously invested in digital currencies, you should be able to complete the process at eToro in under five minutes.
First, you need to open an account and upload a copy of your ID. Then, you can choose from a wide variety of payment methods to meet the minimum deposit amount of $50. This covers everything from Visa, MasterCard, and Paypal to Neteller, WebMoney, and local bank transfers. All of the aforementioned payment methods can be used on a fee-free basis – which is a major advantage. After all, most cryptocurrency brokers offering Ethereum charge in excess of 5% to deposit in US dollars.
Once you’ve added some money to your eToro account, you can then search for Ethereum and enter your investment stake. This starts at just $25, which is perfect if you are only planning to invest small amounts. As soon as you confirm the investment, eToro will execute your Ethereum purchase at the best available rate. Then, you will find the ETH tokens stored safely in your eToro portfolio – where you can keep them for as long as you wish at no extra charge.
When it comes to trading fees, eToro also excels. This is because the broker only charges a spread – which is essentially a mark-up between the buy and sell price. This starts at just 0.75% on digital currencies – which is one of the best spreads we have come across. If you’re a risk-averse investor that tends to diversify, you’ll be pleased to know that eToro offers over 30 cryptocurrencies on its website. This covers everything from XRP, Litecoin, and Bitcoin to Ethereum Classic, EOS, and Cardano.
In fact, if you want to take your diversification strategy to the next level – you might consider the eToro CopyPortfolio service. This is a professionally managed tool that will let you passively invest in a diversified basket of crypto assets. The team at eToro will regularly rebalance the portfolio – so there is nothing for you to do until you are ready to cash out. You should also check out the eToro Copy Trading tool – which is another passive investment feature.
With this, you will be ‘copying’ an experienced eToro trader like-for-like – proportionate to the amount you invest. For example, if your chosen trader decides to invest 25% of their portfolio into Ethereum, you will do the same. Finally, and perhaps most importantly, eToro is one of the most regulated and reputable cryptocurrency brokers in this industry. The platform is approved by the SEC and FINRA in the US and authorized and regulated by financial bodies in the UK, Australia, and Cyprus.
Pros
- Invest in cryptocurrencies on a spread-only basis
- Minimum investment per trade from just $25
- Supports debit/credit cards, e-wallets, and local bank transfers
- Registered with FINRA/SEC and regulated by the FCA, CySEC, and ASIC
- Minimum deposit of $50 and no transaction fees for US citizens
- Used by over 20 million people
- Perfect for beginners
- Social and copy trading tools
Cons
- Perhaps too basic for technical traders
- No support for MT4 or MT5
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
2. Coinbase – Best Way to Invest in Ethereum for Beginners
There is every chance that you have heard of Coinbase – not least because the cryptocurrency broker is one of the largest in the US. In fact, the platform now serves over 56 million clients and its parent company has since been listed on the NASDAQ exchange. In a nutshell, if you’re looking for a beginner-friendly Ethereum broker that supports instant investment via debit card payments – Coinbase could be worth considering. You will have access to fiat currency facilities as soon as you have registered and uploaded a copy of your ID.
In doing so, you can then invest in Ethereum with your everyday Visa or MasterCard. You will be charged an all-in commission of 3.99% when using the Instant Buy feature – which is expensive. If you are prepared to manually transfer funds from your US bank account, you can do this on a fee-free basis. When the money arrives and Coinbase processes the payment – you can then invest in Ethereum at a fee of 1.49%. If your investment amount is less than $200 – expect to pay higher fees.
Although admittedly, Coinbase is one of the most expensive brokers in this industry, it is also one of the safest. This is because the platform has installed a wide range of security features that ensures you are able to invest without the fear of being scammed or hacked. For example, it is mandatory that all account holders set up two-factor authentication. This means that you will need to enter a unique code that is sent o you via SMS or Google Authenticator on each login attempt.
Plus, Coinbase keeps 98% of client digital funds in cold storage – with the remaining 2% kept in hot wallets for liquidity and withdrawal purposes. If you have a US dollar balance at Coinbase, this is kept in bank accounts that are FDIC-insured. In addition to offering high levels of security and convenience, Coinbase is also great for diversifying. This is because the platform offers a broad selection of blockchain assets – with more and more being added on a regular basis. There is also the Coinbase mobile app that doubles up as a cryptocurrency wallet.
Pros
- One of the most popular cryptocurrency exchanges
- More than 56 million users
- Supports instant debit card purchases
- Dozens of digital currencies to choose from
- Institutional-grade security practices
Cons
- Debit card deposits are expensive at 3.99%
- You will pay a standard trading commission of 1.49%
at eToro, #1 Broker in the US
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
3. Binance – Best Place to Invest in Ethereum for Asset Diversity
Binance is the largest cryptocurrency exchange globally in terms of trading volume and client numbers by some distance. For instance, not only does Binance claim to have over 100 million account holders, but in the 24 hours prior to writing this guide the exchange facilities over $93 million worth of crypto transactions. Although Binance is a global cryptocurrency exchange, it has since launched a domestic platform that complies with all relevant US regulations and laws.
This means that as a US client, you can safely invest in Ethereum knowing that you are using a legitimate provider. In terms of the process involved to invest in Ethereum at Binance, the easiest option on the table is to use your debit or credit card. This will allow you to invest instantly, albeit, Binance will need to verify your identity first. We found that once you upload a copy of your ID, Binance is usually able to do this within a couple of minutes.
Binance charges a debit/credit card fee of 0.5% to invest in Ethereum – which is much cheaper than Coinbase. This is also the case with 50+ other digital currencies supported on the main Binance website. If you decide to trade digital assets on the Binance exchange, you will pay a commission of just 0.10% per slide. For instance, if you were to swap $1,000 worth of Ethereum in Bitcoin, this would cost you a commission of $1. By holding a minimum number of Binance Coin (BNB) tokens, this commission is further reduced by 25%.
If you have a bit of experience in short-term trading, you might also like the advanced Binance exchange. This will give you access to a plethora of tools that can help forecast the future direction of your chosen cryptocurrency pair. This is inclusive of detailed charts with multiple timeframes, technical indicators, and integration with TradingView. You can also choose from a variety of order types at Binance. This covers everything from limit, stop-loss, and take-profit orders – which are great for entering and exiting the market in a risk-averse manner.
Pros
- Facilitates billions of dollars in daily trading volume
- Supports hundreds of digital asset pairs
- Near-instant deposits via debit/credit card
- Trading commission starts at just 0.1% per slide
- Offers crypto savings accounts
- Ideal for both beginners and experienced traders alike
Cons
- Not all supported cryptocurrencies can be purchased with a debit/credit card
- No e-wallet deposits or withdrawals
at eToro, #1 Broker in the US
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
4. Robinhood – Invest in Ethereum via a Regulated Mobile App
This means that instead of having to invest over $3,000 to buy a single ETH token, you can purchase any amount that you wish. For example, if you invested $35 and Ethereum was priced at $3,500, you would own 1% of one ETH. When it comes to fees, Robinhood is well-known for its 0% commission offering. Although at first glance this sounds like you are getting a great deal – it’s really important to keep an eye on the spread. As we mentioned earlier, this is the difference between the buy and sell price of Ethereum.
In the case of Robinhood, we find that the spread can creep up at times – especially outside of standard market hours. Nevertheless, once you have invested in Ethereum at Robinhood, you won’t have the option of withdrawing your tokens to a third-party wallet. Instead, your investment will remain on the platform until you elect to cash out – which you can do at any given time. In terms of paying for your Ethereum investment, Robinhood doesn’t support debit/credit cards or e-wallets like Paypal.
Instead, the only options you have are ACH and a bank wire. Both options are fee-free, but you might have to wait up to 5 business days for Robinhood to credit the payment. For example, if you are on the basic account, only the first $1,000 that you deposit will be credited instantly. If you’re on the gold account – which costs $5 per month, you’ll be given much higher limits. Finally, we should note that Robinhood also offers a top-rated mobile app that allows you to buy, sell, and trade assets while on the move.
Pros
- Hugely popular broker in the US
- Millions of US clients on its books
- Offers crypto, stocks, options, and funds
- 0% commission on all supported markets
- Heavily regulated
Cons
- Spreads are often wide
- No debit/credit card deposits
- Only the first $1,000 is credited instantly when depositing funds (basic account)
- Limited selection of cryptocurrencies
at eToro, #1 Broker in the US
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
5. Webull – Invest in Ethereum From Just $1
The final broker that we will review today is Webull – which is a great option if you want to invest in Ethereum in the US with super-small stakes. In a nutshell, this user-friendly trading platform allows you to invest in cryptocurrencies from just $1. This means that you can purchase just a very small fraction of Ethereum – which is great if you want to enter the market conservatively. Much like Robinhood, Webull is known for its 0% commission service.
Not only is this available on stocks and ETFs, but cryptocurrencies like Ethereum too. The platform notes that it charges a spread that starts from 100 basis points. In simple terms, this means that the spread amounts to a minimum of 1%. When you take this into account, the 0% commission offering isn’t as competitive as it sounds. For instance, eToro operates a similar pricing model, but the spread starts at just 0,75%. In addition to Ethereum, Webull offers a number of other leading digital assets.
This includes the likes of Litecoin, Bitcoin Cash, Bitcoin, Cardano, Stellar, Zcash, Dash, Ethereum Classic, and more. Although Webull offers a comprehensive web trading facility, the vast majority of clients actually opt for the beginner-friendly mobile app. Available on both iOS and Android devices, the Webull app gives you 24/7 access to the cryptocurrency markets. In terms of making a deposit, neither debit/credit card nor e-wallets are supported.
You can, however, deposit funds via ACH on a fee-free basis. You can also initiate a domestic bank wire, albeit, this will cost you $8 per deposit. Bank wire withdrawals are even more expensive at $25 per transaction. If you’re the type of investor that likes to keep tabs on how your assets are performing, the Webull app offers real-time market data. You will also find customizable charts and technical indicators – should you wish to perform some independent research and analysis.
Pros
- User-friendly trading app for both iOS and Android devices
- 0% commission policy across all assets
- No minimum deposit
- ACH deposits and withdrawals are fee-free
- Regulated in the US
- Invest from just $1
Cons
- Crypto spreads start at 1%
- Too basic for experienced traders
- No support for e-wallets or debit/credit cards
at eToro, #1 Broker in the US
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
How to Invest in Ethereum – Detailed & Explained in Full
If you’ve never used an online cryptocurrency to invest in digital assets – you might be somewhat confused about how things actually work. Put simply, the investment process is virtually like-for-like with that of buying shares from a traditional stockbroker. That is to say, it’s just a case of opening a cryptocurrency broker account, depositing some funds, and then completing your Ethereum investment.
Nevertheless, if you need a little guidance – the sections below will show you how to invest in Ethereum step-by-step. You will notice that for our tutorial we are using FINRA-approved broker eToro – which is not only the best platform to invest in Ethereum for convenience and cost-effectiveness – but also safety.
Step 1: Open an Ethereum Investment Account
By choosing eToro as your go-to Ethereum broker, the first part of the process will require you to register an account. The broker will need to collect some personal information from you – which includes your first and last name, home address, nationality, and date of birth.
You also need to provide some contact details, alongside your social security number. You will then need to verify your cell phone number and email address.
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
Step 2: Upload ID
To complete the eToro registration process, the broker will ask you to upload two verification documents. This is the industry standard for regulated brokers – irrespective of which asset classes they host.
The two documents you need to provide are listed below:
- Proof of Residency: Multiple documents are supported – such as a utility bill or bank account statement. The document must be dated within the prior three months.
- Proof of Identity: To verify your identity, you will need to upload a copy of a valid government-issued ID.
Once soon as you upload the above documents, eToro will electronically verify your identity and residency status. It does through automated technology, so in most cases, expect to see your eToro account verified in under two minutes.
Step 3: Deposit Funds
Now that you have got the account verification process out of the way, the next step is to deposit some funds into your newly created eToro account. The easiest and fastest way to do this is to use a debit or credit card. E-wallets like Paypal and Neteller are also worth considering, as these are processed instantly.
You might also consider a local bank wire. But, this can delay the process by 0-3 working days, so do bear this in mind. In terms of deposit fees, US clients can fund their accounts without paying any transaction charges. The minimum deposit across all supported payment methods is just $50.
Step 4: Search for Ethereum
eToro offers thousands of financial instruments across several asset classes. As such, it’s best to just enter ‘Ethereum’ into the search box at the top of the page and click the ‘Trade’ button.
In doing so, this will take you straight to the relevant page to invest in Ethereum.
Step 5: Invest in Ethereum
All that is left for you to do now is enter your stake and confirm the order. First, you can enter your investment amount in US dollars into the relevant box. The minimum amount to invest in Ethereum is just $25. When you enter your stake, you will see that the number of units will update in real-time.
In our example, we are investing $400 into Ethereum – which will get us 0.12 units – or 12% of 1 ETH token. Finally, you will need to click on the ‘Open Trade’ button to complete your Ethereum investment.
How to Sell Ethereum
The overarching objective of investing in Ethereum is no different from any other asset. That is to say, you are likely investing because you want to make a profit. The only way to realize this is by selling your ETH tokens at a higher market price than that what you originally paid.
For instance, if you invested when Ethereum was trading at $3,000 per token and you sell when the digital asset is priced at $4,000 – that’s a profit of 25%. In terms of how you go about cashing out your profits, you can sell the tokens back to the same broker you purchased them from.
For example, if you invested at eToro, you just need to create a sell order. The ETH tokens will then be converted back to US dollars at the next best available price.
Ways to Invest in Ethereum
Wondering about the best ways to invest in Ethereum in the US? Ultimately, the best option on the table is to use a regulated broker. This will ensure that you invest in a safe and secure environment. With that said, a lot of US traders also seek alternative methods – perhaps to benefit from lower fees or to take advantage of additional investment features.
With this in mind, the sections below will provide a brief overview of the best ways to invest in Ethereum in the US.
Ethereum ATM
You will find thousands of crypto ATMs scattered across the US. The vast majority of these will offer both Bitcoin and Ethereum. This means that you can simply insert cash into the ATM and in return – have the Ethereum tokens sent directly to your wallet.
Do note that Ethereum ATMs are super expensive in terms of commission fees. The most competitively priced ATM that we have come across will charge a mark-up of 5%. On the other hand, we’ve also come across plenty of providers that charge in excess of 15%.
Ethereum Broker
As we noted earlier, Ethereum brokers work the same way as a traditional stock trading platform. This is because the Ethereum broker will likely be regulated and crucially – authorized to operate in the US. This is the case with all of the Ethereum brokers that we have discussed on this page.
Ethereum brokers will sell you digital tokens directly – meaning that you do not need to trade with other market participants. You will also be able to pay for your Ethereum investment in US dollars – with some brokers supporting debit/credit cards and e-wallets.
Ethereum Exchanges
If you’re seeking low commissions and a vast library of markets, then you might be tempted to use a cryptocurrency exchange. In doing so, you will be trading directly with other investors. There are hundreds of exchanges operating in this space – all of which offer a market on Ethereum.
The key issue here is that cryptocurrency exchanges often fall short when it comes to regulation. This is because they are typically located offshore and thus – they have no regulatory body to answer to. As such, we would suggest avoiding unregulated exchanges.
Should I Invest in Ethereum?
Since launching in 2015, Ethereum has proven to be a superb alternative to Bitcoin. With that said, the two blockchain projects are not direct competitors – so many investors will own both Bitcoin and Ethereum. Nevertheless, that isn’t to say that Bitcoin is right for your long-term portfolio. This is why we think it is important to only invest in Ethereum if you have already performed independent research on the digital asset.
In the sections below, we explore some of the main reasons why you might consider investing in Ethereum for the first time.
De-Factor Smart Contract Platform
The main selling point of the Ethereum blockchain is that it supports smart contract technology. Although you don’t need to understand the specifics of how smart contracts work, as an investor, it’s useful to at least have a grasp of the basics. In a nutshell, smart contracts allow two or more people to transact in a trust-less and decentralized environment.
The underlying technology can perform this action without needing a third party, as it can collect the required data from variable online sources. The smart contract technology utilized by the Ethereum blockchain can essentially be used for every sector or industry imaginable – from baking and employment to gaming and voting.
Ethereum 2.0
Another hugely promising technical aspect of the Ethereum project is that is approaching its much-anticipated network upgrade. In what it calls ‘Ethereum 2.0’, this will take the underlying network to new heights.
For example:
- Ethereum 2.0 will see the network upgrade from Proof-of-Work to Proof-of-Stake. This will make the network considerably more energy-efficient.
- The upgrade will improve Ethereum’s scaling capacity by a significant amount. This means going from a maximum capacity of just 16 transactions per second (tps) up to an estimated 100,000 tps.
- A direct result of improved scalability is faster and much cheaper transactions
All in all, Ethereum 2.0 will allow the project to handle a vast number of transactions in a cost-effective manner – paving the way for usage on a mass scale.
Ethereum Has Yielded Huge Gains
When it comes to investment returns, Ethereum has not disappointed its backers since it was launched just over six years ago. In fact, if you were one of the lucky ones to invest in Ethereum in 2015 – you would have paid around $0.75 per token. At the time of writing in August 2021, Ethereum is trading at just over $3,200.
Doing the math, this works out at end-to-end gains of 426,566%. So, had you invested a mere $100 when the blockchain asset was first launched, your ETH tokens would now be worth over $426,000. With that said, you haven’t necessarily missed the boat by entering the market at this stage of the project’s development.
On the contrary, Ethereum has generated some huge returns in 2021 alone. For instance, the digital token was priced at $736 at the start of the year. Ethereum then breached an all-time high of $4,362 in May 2021 – so that’s gains of almost 500% in just five months of trading.
What are the Risks of Investing in Ethereum?
It goes without saying that all investments – whether that’s stocks, crypto, or gold – come with an element of risk. But, in the case of digital assets like Ethereum, the risks are much higher.
Volatility
For example, we mentioned earlier that in the first five months of 2021, Ethereum increased in value by almost 500%. On the other hand, Ethereum has also gone through periods where it has declined in value by a sizable amount in a short timeframe.
For instance, the digital asset went from highs of $1,400 in January 2018 to just $370 in April of the same year. This means a price reduction of 73% in just four months of trading.
Competition
Although Ethereum is the second-largest cryptocurrency in terms of market capitalization and is still the de-facto smart contract platform in this industry – it is facing stiff competition from alternative projects. For example, the likes of NEO is not only able to execute secure smart contracts on its network, but it already offers faster and more scalable transactions than its Ethereum counterpart.
Other so-called ‘Ethereum Killers’ include EOS and Cardano. The key point here is that there is no guarantee that Ethereum will retain its status as the leading smart contract blockchain. On the contrary, there is every chance that the platform will lose its market share to other participants. This is why the project needs to ensure that its Ethereum 2.0 upgrade happens sooner rather than later.
How Much Does it Cost to Invest in Ethereum?
You will need to pay some fees to invest in Ethereum. The two most prevalent fees are linked to deposits and trading commissions.
- You might find that cryptocurrency brokers often charge 3-5% to deposit funds with a debit or credit card. Binance is, however, much more competitive – as the platform charges just 0.5% on debit/credit card payments.
- You will likely need to pay a commission to invest in Ethereum. Coinbase, for example, charges 1.49% on both buy and sell orders.
- Be careful when you come across Ethereum brokers offering 0% commissions. For instance, while Webull offers 0% commission on Ethereum investments, the spread starts at 1%.
All in all, we found that eToro is one of the best Ethereum brokers when it comes to fees. Not only can US clients deposit funds with a debit/credit card, e-wallet, and bank wire for free – but the only trading fee payable is the spread (from 0.75% on crypto).
How to Buy Invest in Ethereum – Conclusion
By reading this beginner’s guide on how to invest in Ethereum – you should have no issues completing the process in under five minutes. You do, however, need to do a bit of research on your chosen broker before opening an account. As explained extensively, your chosen platform must be regulated, offer low fees, and accept your preferred deposit method.
Ultimately, we found that eToro is by far the best broker in this space – as you can invest in Ethereum at a minimum of just $25. The broker is regulated by multiple financial bodies and approved to operate in the US. And – not only can you deposit funds with a debit/credit card and e-wallet for free – but you can invest in Ethereum on a spread-only basis.
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FAQs
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Where to invest in Ethereum
Should I buy Ethereum?
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