Risk Warning: Your Capital is at Risk.
This guide covers how and where you can buy or trade on Ethereum (ETH) and why some traders like or dislike this altcoin. We also provide a list of regulated brokers and exchanges where you can buy or trade derivatives.
In a hurry? If you want to get started trading Ethereum, here are brokers available in for you to consider:
Disclaimer: Availability subject to regulations.
Between 74-89% of retail investor accounts lose money when trading CFDs.
Contents
How Can You Buy Ethereum?
One way to acquire Ethereum is by using a cryptocurrency exchange.
Exchanges offer several ways to purchase and trade Ethereum. Exchanges like OKEx offer decentralized, spot, and margin trading. Others like BitMex are a mix of person-to-person and spot trading.
If you are happy to directly trade your fiat currency to buy Ethereum then you could use an exchange like Coinbase or LocalBitcoins which allows users to buy Bitcoin in almost any currency.
Here’s a list of popular cryptocurrency exchanges and platforms available to residents of :
Risks of Using Crypto Exchanges
However, it’s important to note that going through an exchange does carry risks. You don’t have any legal protection should anything go wrong and you need to be very careful of potential scams.
Where Can You Trade Ethereum?
Instead of buying Ethereum from an exchange, an alternative is to trade Ethereum financial derivatives such as forex and CFDs using a regulated broker.
Using a broker allows you to take advantage of shifts in the pricing of Ethereum without actually owning any of this digital currency.
Trade Ethereum in
These brokers allow traders in to speculate on Ethereum CFDs, forex currency pairs, options, and other derivatives.
IMPORTANT: CFDs are not available in the USA due to local regulation, and regulated brokers do not accept US citizens or US residents as clients.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74%-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Please Note: Availability subject to regulations. Cryptocurrency CFDs are not available to UK retail traders.
Reasons For Trading Ethereum
- Robust Development Team
- First Mover Advantage & Network Effect
- Mainstream Corporate Acceptance
Important: This is not investment advice. We present a number of common arguments for and against investing in this commodity. Please seek professional advice before making investment decisions.
Robust Development Team
As a project, Ethereum is focused on building a decentralized computing machine. This vision is a lot more ambitious than Bitcoin where the majority of the development is narrowly focused on securing and scaling the network.
In contrast, Ethereum developers are more interested in what new use cases the Ethereum network can achieve and how far they can take it.
This attracts a much more diverse set of developers with a wider range of skills and in this sense, Ethereum is seen as the more innovative of the two networks and the development is more accessible to newcomers.
First Mover Advantage & Network Effect
Being the first decentralized computational machine that enables smart contracts means that a lot of the network and smart contract development has happened on the Ethereum network.
Many newer networks looking to compete in the same space, but at most, unless they innovate faster than Ethereum, they can only hope to steal some of the spillovers from Ethereum’s congestion problems.
Mainstream Corporate Acceptance
Being more than just a payment network and allowing more computational operations on its decentralized network, Ethereum has attracted the attention of established corporations such as tech giants like Microsoft, Cisco, and Intel.
Other interested finance heavyweights include J.P.Morgan, UBS, and Santander, as well as household names in other industries.
Microsoft has developed its Ethereum-based Coco platform and is offering it to clients under its Azure cloud services for companies seeking alternative database structures that can take advantage of key blockchain strengths.
Reasons Not to Trade Ethereum
- Large Attack Surface
- Proof of Stake Uncertainty
- Network Congestion Issues
Important: This is not investment advice. We present a number of common arguments for and against investing in this commodity. Please seek professional advice before making investment decisions.
Large Attack Surface
In order for Ethereum to be able to perform the computations that are necessary to execute smart contracts, the Ethereum programming is more functional than Bitcoin’s which is restricted to only computing low-level financial functions.
With increased complexity comes a larger attack surface, which in security terms simply means more things can go wrong.
Ethereum smart contracts are far from foolproof and even some of the most well thought out and peer-reviewed contracts have failed or been hacked. Only traders that can stomach such risks should have strong positions in Ethereum.
Proof of Stake Uncertainty
Just like with Bitcoin and most of the other major cryptocurrencies, Ethereum currently uses Proof of Work (PoW) as a method for securing the validity of the transactions on its blockchain.
PoW, however, has come under an increasing amount of criticism for being an inefficient use of resources for providing the function that it does.
Ethereum has decided to transition to Proof of Stake (PoS), where stakeholders would be the final arbiters of the state of the network and not miners.
Exploring the Pros and Cons of adopting PoS aside, Ethereum is looking to make this fundamental blockchain transition “in-flight” on the live blockchain which could cause a lot of network “turbulence.”
Network Congestion Issues
Due to its smart contract capabilities and enhanced computational capabilities over other blockchains, Ethereum is one of the most popular blockchain platforms for other projects to build on top of.
It is the platform of choice for the majority of the ICOs that are using the network not only for the tokensales, many of these projects will be deploying their functionality through smart contracts on the Ethereum network.
Tokensales alone have contributed to the network being stretched to capacity. At the peak, a fun hack-a-thon project called CryptoKitties was deployed to the network which was enough to tip the network over to unprecedented levels of congestion.
Further Reading
- Learn More About Ethereum
- Ethereum Price Guide (Current & Historical Charts)
- Getting Started With Cryptocurrencies
- Crypto Broker and Exchange Guide
- Learn to Trade Commodities
We also have several other altcoin guides like:
