The 2020-2021 period showcased Ethereum's remarkable growth, significantly outperforming Bitcoin in terms of price performance. By the end of 2021, ETH had surged by an impressive 5,530%. When examining the Return on Investment (ROI) for top cryptocurrencies, Ethereum has also far exceeded both Bitcoin and Ripple.
According to data from January 2023 on Coinmarketcap:
- Bitcoin ROI: 15,441.69%
- Ethereum ROI: 54,843.80%
- Ripple ROI: 6,382.82%
It's clear that even after market downturns, ETH's ROI remains strong. This cryptocurrency continues to attract significant attention from both retail investors and large institutions.
Entering early 2024, Ethereum's price surged strongly, reclaiming the $4,000** level as the digital currency market experienced a massive rally, particularly with Bitcoin breaking the **$70,000 mark for the first time.
As the second-largest cryptocurrency by market capitalization at approximately $484 billion (as of March 12, 2024), Ethereum presents a compelling opportunity for many. This guide will explore where and how to buy ETH, effective purchasing strategies, and other essential information.
Where to Buy Ethereum (ETH)? 3 Popular Methods
Typically, investing in Ethereum involves three common approaches: Buying and selling ETH (margin trading), Ethereum staking, and Long-term investment.
However, Ethereum mining became obsolete after October 2022. Following "The Merge" event in Q3 2022, Ethereum successfully transitioned from a Proof-of-Work (PoW) mechanism, which required miners, to a Proof-of-Stake (PoS) consensus model.
In simple terms, the new mechanism allows investors to participate by staking ETH instead of the traditional mining process.
The table below highlights the key differences between the two main investment approaches available today:
| Criteria | Buying/Selling ETH (Margin Trading) | Long-Term ETH Investment |
|---|---|---|
| Cost | Very Low | Medium |
| Leverage | Yes, up to 1:10 for Ethereum | No |
| Key Advantage | Profit from both rising and falling markets | Direct ownership of ETH (with risk if price falls) |
| Suitable For | All traders, especially those with lower capital seeking short-term gains | Investors with large capital, long-term vision, and high risk tolerance |
| Profit Timeline | Fast—within the day, or even by the minute | Unclear; depends on market cycles to sell higher than purchase price |
| Risks | Risk from misusing financial leverage | Risk of theft, hacking, and security breaches from storing ETH |
| Where to Execute | Reputable CFD brokers | Exchanges like Binance, Coinbase |
Let's delve into the details of these methods.
1. Buying and Selling ETH (Margin Trading) - Profiting from Price Movements
This is a popular and widely favored method. Investors can profit from the price difference of Ethereum without needing to own the underlying asset. This approach allows for potential gains even when the market is declining.
Furthermore, not holding the actual asset helps mitigate risks associated with ownership, such as hacking, scams, and legal complications.
A Practical Example of Ethereum Margin Trading:
- Assume 1 Ethereum = $3,803.16
- With 1:10 leverage, the required margin is $380.32 to control one full ETH.
- If you open a sell position anticipating a price drop and ETH falls to $3,780:
- Your profit would be:
($3,803.16 - $3,780) x 1 = $23.16
This represents a significant return on your initial margin investment. It's crucial to remember that while leverage can amplify profits, it also magnifies losses.
👉 Explore leveraged trading platforms to start.
Steps for Margin Trading ETH:
- Register an Account: Open an account with a licensed and regulated broker.
- Deposit Funds: Add capital to your trading account.
- Place an Order: Execute a buy or sell order based on your market analysis.
- Monitor the Market: Watch price movements and manage your position.
- Close the Position: Finalize your trade to realize profit or loss.
2. Long-Term Investment (Buy and Hold)
This is the foundational method of investing: purchasing Ethereum at a low price and selling it later at a higher price. Investors who choose this method need a digital wallet to store their ETH securely and then wait for the market to appreciate.
Investors often use software wallets or the built-in wallets on major exchanges for convenience. These exchanges provide liquidity and are responsible for securing users' funds, though they have historically been targets for hackers.
Where to Buy ETH for Long-Term Holding:
- Centralized Exchanges (CEXs): Platforms like Binance and Coinbase are popular choices. They offer high liquidity, user-friendly interfaces, and a wide range of supported cryptocurrencies. Trading fees are typically around 0.1%.
- Peer-to-Peer (P2P) Platforms: Services like Remitano act as intermediaries, facilitating direct trades between buyers and sellers. Fees can vary but often include a percentage of the trade value (e.g., 1%) and a fixed withdrawal fee.
Understanding the Costs of Buying and Selling ETH
The cost of entry is relatively low, as you can purchase fractional amounts of Ether. For instance, if 1 ETH is priced at $3,803, you can buy 0.1 ETH for about $380 or 0.01 ETH for $38.
If you're not interested in holding the asset, margin trading requires even less initial capital. For example, with 1:10 leverage, you could control a position worth $380 with just $38 in margin. Always factor in potential fees like overnight financing costs if you hold leveraged positions open for multiple days.
Ethereum's Current Price and Historical Performance
As of mid-March 2024, ETH is trading around $3,800. It experienced a prolonged correction from its all-time high (ATH) of nearly $4,891 in November 2021, losing up to 80% of its value in 2022 and trading below $2,000 for most of 2023. However, it has shown a strong recovery and is approaching its previous highs.
Ethereum's price has changed dramatically since its introduction in 2015. It traded around $1 initially and saw its first major bull run in 2017, reaching a then-ATH of ~$1,400 in January 2018. Like all markets, it was impacted by the March 2020 pandemic crash but rebounded powerfully, setting a new ATH near $4,800 in November 2021. The subsequent market downturn pushed it down again before its strong 2024 rally.
Should You Buy Ethereum in 2024?
The cryptocurrency market is booming again, led by Bitcoin's record-breaking performance. Ethereum is steadily climbing back toward its own all-time high.
With inflation being reined in and central banks planning potential interest rate cuts to stimulate economic growth, 2024 is viewed by many as a promising "golden" period for investment. As Bitcoin has already surpassed its previous peak, many traders are optimistic that Ethereum could follow suit in the short term.
Several financial analysts and publications have offered optimistic predictions for ETH's price in 2024 and beyond, with some forecasts suggesting targets between $5,000 and $6,500 by the end of the year. Long-term projections are even more bullish.
Ethereum vs. Bitcoin: Which One Should You Buy?
Bitcoin (1st) and Ethereum (2nd) are the top two cryptocurrencies by market cap. Instead of choosing one over the other, a balanced portfolio often includes both.
- Ethereum boasts superior technology with its smart contract functionality, faster transaction speeds (post-upgrade), and a vast ecosystem of decentralized applications (dApps). Its upcoming developments continue to add value.
- Bitcoin is considered "digital gold." Its primary value proposition is as a decentralized store of value, with a fixed supply creating scarcity. It holds historical significance as the first cryptocurrency and maintains the strongest brand recognition.
Both assets have distinct value propositions and growth potential. Diversifying your investment portfolio across both is generally a wiser strategy than trying to pick a single winner.
Key Factors Influencing Ethereum's Price
Several variables can cause ETH's price to fluctuate:
- Market Sentiment: Overall trader optimism or pessimism in the crypto space.
- Adoption Rates: How widely Ethereum is being used for dApps, DeFi, and NFTs.
- Regulatory News: Government policies and regulations concerning cryptocurrencies.
- Technological Developments: Upgrades to the Ethereum network (e.g., scalability improvements).
- Macroeconomic Factors: Global economic health, inflation, and interest rates.
- Media Coverage: Positive or negative news stories impacting public perception.
Frequently Asked Questions
What is the minimum amount of ETH I can buy?
You can buy a very small fraction of an ETH. Most exchanges allow you to purchase as little as $10-$20 worth, meaning you can own 0.002 or 0.005 ETH.
Do I need a wallet to buy Ethereum?
If you are buying for long-term holding ("HODLing"), a private wallet (hardware or software) is recommended for maximum security. If you are trading on an exchange or using CFDs, the platform will provide a built-in wallet for your funds.
Is it safe to invest in Ethereum?
All investments carry risk, and cryptocurrency is known for its high volatility. While Ethereum is a well-established project, its price can be unpredictable. Only invest what you can afford to lose and ensure you use reputable platforms. 👉 Learn about secure trading practices
What's the difference between ETH and BTC?
Bitcoin is primarily a decentralized digital currency and store of value. Ethereum is a decentralized computing platform that enables smart contracts and decentralized applications, with its native currency (ETH) used to power these operations.
Can I profit if Ethereum's price goes down?
Yes, through margin trading or CFD platforms, you can open a "sell" (short) position to potentially profit from a declining market.
What are gas fees?
Gas fees are transaction fees paid to network validators to process transactions and execute smart contracts on the Ethereum blockchain. Fees can vary greatly depending on network congestion.
Final Thoughts
Ethereum is the second-largest cryptocurrency, offering a more accessible entry price than Bitcoin and significant volatility that can create opportunities for traders.
There are multiple ways to invest in and profit from Ether. For many, the fastest and most straightforward method is through margin trading, which allows for profit from price movements without owning the underlying asset. For others, a long-term buy-and-hold strategy aligns with their goals.
Regardless of your chosen method, always remember that investing carries risk. Develop a clear risk management strategy, educate yourself continuously, and stay updated on the latest Ethereum news to make informed decisions and mitigate potential losses.