How to buy Ethereum now with commission?

Last updated: 09.03.2022
Taso Anastasiou
Author:
Taso Anastasiou
Adviser
CFD & Trading
Experience
> 20 years

Ethereum has emerged as the world’s most widely used blockchain thanks to the rise of DeFi and the popularity of stablecoins. It has enjoyed a blaze of publicity, inspiring many many people to buy Ethereum in recent years.

 The best way to buy Ethereum is via CFDs, which allow you to speculate on whether it will increase or decrease in value. This guide explains how to buy Ethereum CFDs, why they are so popular and the trading features you can benefit from. It also delves into Ethereum’s history and explains fundamental and technical analysis.

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  • The history of Ethereum
  • The key features of Ethereum
  • Presiding issues
  • The advent of Ethereum CFDs
  • How to buy Ethereum
  • Where to buy Ethereum
  • Ethereum price prediction
  • FAQs

The history of Ethereum

Ethereum is a decentralized, open-source blockchain designed to power smart contracts. Russian-Canadian programmer Vitalik Buterin came up with the idea for Ethereum in 2013 after working on a Bitcoin magazine and serving as an assistant to University of Waterloo cryptographer Ian Goldberg. He dropped out of college and went to work full-time on Ethereum in 2014 when he was awarded a $100,000 grant from the Thiel Fellowship.

He crowdfunded throughout 2014, bringing in Gavin Wood, Charles Hoskinson and Anthony Di Iorio, Mihai Alisie, Amir Chetrit, Joseph Lubin and Jeffrey Wilcke to finance and develop the project. They are all listed as co-founders. The network went live in July 2015.

Ether (ETH) is the native cryptocurrency on the Ethereum blockchain. A total of 72 million ETH coins were pre-mined when the network went live, and the circulating supply went past 115 million in 2021. Ether is widely referred to as Ethereum – when people say they buy Ethereum, they actually mean Ether, but the two terms have become interchangeable. ETH is the world’s second largest cryptocurrency after Bitcoin. It accounts for more than 10% of the overall crypto market cap and it is typically worth more than the next seven or eight coins combined.

Ethereum regularly receives protocol upgrades. The initial code name was Frontier, and then came Ice Age, followed by Homestead. Muir Glacier and Berlin are the more recent protocol upgrade code names. There were two network forks back in 2016, which were designed to reverse the notorious DAO hack and fend off other attacks. The next step will be the release of Ethereum 2.0, which is explained in greater detail further down this buy Ethereum guide.

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The key features of Ethereum

Ethereum’s stated aim to provide users with the opportunity to “codify, decentralize, secure, and trade just about anything”. The blockchain can be used to verify transactions, voting, domain names, governance, contracts, intellectual property agreements and much more. Developers can build decentralized apps (DApps) on the network and deploy them for a wide range of uses, all following the open-source, blockchain-based, peer-to-peer ethos of the network.

Ethereum hosts a number of stablecoins and altcoins, but ETH is the native coin. You can use Ethereum to pay the gas fees required by the blockchain – these vary according to demand at the time, and they can grow pretty steep, which is why the developers are working on Ethereum 2.0 – and also for a wide range of real-world uses. Ether can be spent on food, beverages, consumer goods, property, private jet hire, web hosting and much more.

Ethereum is similar to Bitcoin in that it follows a proof of work consensus mechanism, whereby miners verify transactions in exchange for a reward paid in ETH. The upgrade to Ethereum 2.0 will eventually change the consensus mechanism to proof of stake, which is designed to reduce the barriers to entry, improve energy efficiency, bring gas fees down and provide stronger support for shard chains. The circulating supply of Ether is far higher than Bitcoin, which is capped at 21 million.

Presiding issues

You might think that the most obvious way to buy Ethereum is to visit an exchange, enter your card details and make a purchase. However, many people find this expensive, time-consuming and insecure. The first thing to note is that crypto exchanges have a long history of being hacked. Mt. Gox, the world’s largest crypto exchange, was compromised in 2014 and more than 850,000 Bitcoins were declared missing and likely stolen.

Mt. Gix has long since collapsed, but the big exchanges that dominate the current crypto sector have been subject to security breaches too. For that reason, anyone that decides to buy Ethereum is advised to transfer it to an external wallet. However, software wallets and web-based wallets are easy targets for sophisticated hackers, so you are generally advised to buy a hardware wallet, which stores your coins offline. Yet they are by no means watertight, and it can be a nightmare if you lose or damage your hardware wallet.

You also have to pay high fees. Crypto exchanges will charge a fee to buy Ethereum. Then you will have to pay a network fee to transfer it to your wallet. As previously mentioned, the network fees on Ethereum can be very high at times, which seriously diminishes your chances of earning a return from your trading. You then pay the network fee again to send it back to the exchange, and pay another commission fee to sell your ETH, while you may also be charged a fee for withdrawing fiat currency from the exchange. This is a convoluted and expensive process. You could simply buy Ethereum, leave it on an exchange and sell it before it falls prey to hackers, but that is considered risky.

The advent of Ethereum CFDs

Ethereum CFDs allow you to circumnavigate all of those issues in one fell swoop. You can use Ethereum CFDs to speculate on the future value of Ethereum without having to actually go through the rigmarole of buying, holding and selling ETH. nextmarkets is the best place to buy and sell Ethereum CFDs due to the tight spreads, user-friendly platform, quality features and professional support available.

You will have an idea of what is cryptocurrency and how to buy cryptocurrency, but you might be wondering, what is a CFD? It stands for contract for difference. You essentially take out a contract which stipulates that you will pay or be paid the difference in the price of Ethereum at the start of the contract and at the end of the contract.

You have two options: buy Ethereum (go long) if you think the price will increase, or sell Ethereum (go short) if you think the price will go down. This is an exciting opportunity, because you can only buy Ethereum at a traditional exchange. CFDs allow you to speculate both ways, giving you the opportunity to profit from dips as well as hikes in its value.

CFDs are financial derivative products. You can also buy Bitcoin CFDs, along with CFDs covering thousands of individual stocks and funds. Many people like to trade forex CFDs. It is easy to see why they are so popular, as it removes the risk of holding an actual asset that can be hacked. It is also a regulated space, which cannot be said for buying and holding crypto. We offer commission-free CFD trading, so you do not have to worry about purchase fees, network fees and so on, and it makes the process of buying and selling Ethereum much cleaner and more convenient.

How to buy Ethereum

First you need to sign up for an account. This process takes less than five minutes and it should be very straightforward. We just require your email address and for you to choose a password. You can then register your account, enter your phone number and verify it by typing in a code that will immediately be sent to you by SMS. You can also complete a KYC (know your customer) process in order to unlock the full features and limits. This requires you to provide proof of ID, and it is quick and simple to do.

Once you have registered an account, you can make a deposit using a credit card, debit card, or e-wallet. Then you can start to buy Ethereum CFDs. Visit the markets section of the site from the homepage, go to cryptocurrencies and select Ethereum. You will be shown charts and statistical data illustrating how Ethereum has performed recently. You can then go short by clicking the red button or go long by clicking the green button. Make your decision based on how you think it will perform during a certain timeframe.

When you click on either “Go Short” or “Go Long”, a pop-up window will appear in the middle of the screen. It will remind you of the buy price and the sell price for Ethereum. The difference between the two is known as the spread, and it will be small. You can then type in the amount you would like to trade and click confirm that you want to open the position. This makes your trade live. You can monitor the trade by checking the price of Ethereum throughout the day, and close it when you want to exit.

There are also some features worth bearing in mind, such as a take-profit order and a stop-loss order. The former instructs us to close your trade when you have reached a certain level of profit. You can set a pre-determined price at which we exit the trade on your behalf, thus locking in profit. The latter is designed as a free insurance policy. It instructs us to exit your trade for you at a certain level, to ensure that no further losses are incurred. This allows you to go into a trade with a very clear idea of the maximum amount of money that you stand to lose in a worse-case scenario.

You can also check out leverage CFD trading, which allows you to put up a percentage of the capital via your account balance, and we loan you the rest. This allows you to make substantially larger trades than would otherwise be possible. It can magnify profits, but also losses, so you should conduct thorough research and risk assessment before entering a trade, and never trade beyond your means.

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Where to buy Ethereum

It is imperative that you stick to safe, secure, licensed and reputable sites when you buy Ethereum. The cryptocurrency sector is new, it moves quickly and it does not fall under the jurisdiction of any country, so regulation is patchy and there are a number of scam sites that will try to steal your money. If anything sounds too good to be true, it probably is.

Buying Ethereum can be fraught with risks, and storing it is even more of a hassle, so it might make sense to buy Ethereum CFDs from a reputable site like nextmarkets. We are headquartered in Germany, and licensed and regulated by the Malta Financial Services Authority, so we can offer our product throughout Europe. Client funds are held at Barclays, which provides customers with reassurance. You do not need to worry about storing Ethereum or buying a hardware wallet, as you simply speculate on its price direction via CFDs.

 

Ethereum price prediction

The price of Ethereum has increased considerably since it was released in 2015. However, it has also been prone to significant levels of short-term and medium-term volatility, and traders seek to capitalize upon these price fluctuations.

The next major step for the development team is to unveil Ethereum 2.0. This set of interconnected upgrades is designed to make Ethereum more scalable, more secure, and more sustainable. The upgrades are being built by multiple teams from across the Ethereum ecosystem.

In essence, Ethereum has become a victim of its own popularity. It needs to be able to support thousands of transactions per second, run rapid application and offer low gas fees. However, overwhelming demand for the network slows it down and pushes prices up, so the team is working on Ethereum 2.0 to fix the issues.

The first step involves releasing the Beacon Chain, which brought staking to the Ethereum ecosystem. The next step will be to roll out shard chains, which will expand the network’s storage capacity and boost transaction speeds. Then the docking process should be complete in 2022, according to the team. This is designed to enable staking for the entire network and bring to an end the need for energy-intensive mining, ultimately making Ether a deflationary asset as fees are burned.

Anyone that wants to buy Ethereum CFDs or sell Ethereum CFDs might consider performing fundamental analysis and technical analysis. Fundamental analysis focuses on the strengths and weaknesses of Ethereum compared to its competitive set, any upcoming news or developments that could cause the price to increase or decrease, whale activity, transaction levels, and wider issues affecting the crypto space and the broader economy.

Technical analysis delves into the historical price patterns that Ether has displayed over the years. Analysts seek to discover patterns that can provide an indication as to how the coin will perform in the near future. Patterns include cup and handle, ascending triangle, descending triangle, symmetrical triangle, pennant, flag, wedge, double top, double bottom and many more. Some traders like to combine both technical and fundamental analysis before they buy Ethereum.

 

Our final thoughts

Ethereum CFDs make it simple and convenient to speculate on how this popular cryptocurrency will perform in future. You do not need to go through the time-consuming, expensive and risky process of buying and storing Ethereum, as you can seek to profit from it without needing to hold the actual instrument. You should always conduct thorough research before trading Ethereum, and make sure you understand the different options available to you.

Buy ethereum FAQs

💰How can I buy Ethereum?

It is possible to buy Ethereum from a crypto exchange, but you will have to pay transaction fees and storing it can present security risks. Many people therefore prefer to buy and sell Ethereum CFDs, which allow you to speculate on Ethereum without having to actually hold it. You can learn more about trading CFDs at nextmarkets.

🚀Is Ethereum trading profitable?

Many people have found Ethereum trading to be a profitable pursuit, but others have lost money when trading it. You should therefore conduct extensive research before buying and selling Ethereum CFDs, and understand the risks involved. You can learn more about Ethereum CFDs by reading our in-depth guide.

❓What is Ethereum?

Ethereum is a digital network that can host decentralized finance projects, facilitate transactions and backup all manner of documents and assets. Ether is the native token on the Ethereum blockchain, and it is the second largest cryptocurrency. It has various real world uses, and it can be used to pay gas fees on Ethereum too.


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