How to Buy Ethereum in the UK – Guide and Tips for 2024
Trading is risky and you might lose part, or all, of your capital invested. The information provided is for informational and educational purposes only and does not represent any type of financial advice and/or investment recommendation.
If you are looking to buy Ethereum, you need to understand more about what it is – and find the best place to buy it.
In the UK, to buy Ether you need to follow these basic steps:
Choose a trading platform
Create an account
Make a deposit
Buy Ethereum
Store your Ethereum
Of course, there is more to each of these steps – and this is what you will find in this article. You will learn the basics of the Ethereum network and how Ether works within it, and what you will need to do as a beginner trader to invest in Ethereum.
You’ll also learn what you should be looking for in a trading platform and how to choose which one is best for you, as well as discussing whether Ethereum is worth investing in.
What Is Ethereum?
Ether is the altcoin created for use with the Ethereum blockchain.
Ethereum was conceptualized by programmer Vitalik Buterin in 2013 and launched in 2015 – and since then, Ether has grown in popularity (and price).
Ether is second only to Bitcoin in terms of market capitalization, and this makes it one of the most well-known and recognized cryptocurrencies out there – which is why many beginners choose to start their cryptocurrency investment journey with it.
Currently, the price of Ether is about £1,462.24 or $1,888.55 (as of 12/07/2023), which is considerably more than it was when it was first launched – the Initial Coin Offering (ICO) was for 50 million ETH priced at just $0.31 each.
Ethereum has had similar market volatility to other cryptocurrencies – with similar triggers, like the opinion of certain media figures such as Elon Musk.
Buying Ethereum in the UK
Understand What Ethereum Is
The more you know about anything you are planning to invest in, the more likely you are to be able to make smarter decisions – so finding out more about Ethereum will only help you.
There are lots of sources of knowledge about Ethereum available, from guides like this to YouTube channels and videos, as well as paid courses delivered by experts to help you make more of your investments.
Don’t limit your knowledge to just Ethereum, either – the best investment advice is to diversify your portfolio, so you might want to investigate what other cryptocurrencies are available to see if there are any that tempt you, too.
Identify Your Risk Level
It is important to remember that investing in any cryptocurrency is a gamble – even one as popular as Ethereum.
Cryptocurrencies are extremely volatile; price fluctuations can be caused in many ways. Mainstream media mentioning crypto in a negative fashion can see prices plummet, or key technological innovators like Elon Musk backing altcoins tends to put prices up.
With that being said, if you can recognize that Ether is a risky investment, you need to be comfortable with your own level of risk. While current prices might be relatively high, the huge dip in December 2022 might not be a risk you are willing to take.
Whatever you decide to invest into Ethereum, make sure you never invest more than you are willing to lose.
Choose the Right Cryptocurrency Platform
The most important decision you will have to make is which platform to use when you are buying Ethereum.
You are not likely to find many ‘traditional’ brokerages offering access to cryptocurrencies, so you are better off looking for one that either specializes in altcoins or offers a wide selection of them. There are many different trading platforms to choose from, including:
Don’t invest in unless you’re prepared to lose all the money you invest.
When you are deciding which platform to choose, you should consider the following as criteria to help.
Choosing the right trading platform is a personal decision, but make sure you aren’t choosing based solely on the fees – this might mean losing out on some other important criteria.
Is It Regulated?
Look for a platform that is regulated by the Financial Conduct Authority (FCA) for UK transactions or by one of the other top-tier regulatory authorities like Australian Securities & Investments Commission.
What Account Fees Does It Charge?
This can include monthly account management fees, withdrawal and deposit fees, and other costs.
What Are the Trading Fees?
In some cases, you will be expected to pay a commission cost on every transaction you make, while other platforms will add their fees into the difference between buying and selling costs (the spread).
What Is the Customer Support Like?
While you might not be able to get advice about your cryptocurrency portfolio, you will still want to have customer support available for any technical issues you might run into. You can generally find this out by looking for independent customer reviews.
Research Tools
You should always look at what research tools are provided, as these can help you decide when the best time to buy is, what to diversify with, and whether to sell. The more tools you have, the better decisions you can make.
Education
Every crypto investor must start somewhere, and the best trading platforms for beginners will often have education in the form of articles, videos, and even training courses available to users.
Range of Altcoins
While you might start with Ether, having the ability to choose different crypto to invest in will make diversifying your portfolio easier.
Crypto exchanges will usually have more choice of altcoins in comparison to trading platforms that have a range of different trading instruments (like stocks, bonds, and commodities).
How to Invest in Ethereum – Creating an Account and Making a Deposit
Trading platforms usually want to make it as simple and easy as possible to open an account with them, and most of them will allow online account opening that can be completed within minutes.
You will be expected to share your personal details to be able to open an account, including financial and identifying details, so you’ll need a valid form of identification and proof of address in most cases.
Once you have an account set up, the next step is to make a deposit.
Many trading platforms will have a minimum deposit amount that you will need to meet to be able to open an account – this can range from $10 right up to hundreds of dollars, so make sure you know how much you’ll need to put in.
Then, you just need to navigate to the right place to buy your Ethereum (ETH). If you are only depositing $10, then you can buy a $10 portion of one ETH, so you are not expected to pay more than a thousand for a whole one.
How to Invest in Ethereum – Storing Your Currency
Cryptocurrency is not something that you physically own – but you can store your bought cryptocurrency in something that is known as a wallet.
There are many different types of wallets available:
Hot wallet – This is an online storage facility, connected to the internet, which gives you immediate access to your Ethereum.
Cold wallet – A cold wallet is an offline storage option, which makes storing your Ethereum safer – but you won’t have instant access. You can often buy cold wallets that are like a thumb drive, preventing the risk of bad actors interfering with your crypto.
Most trading platforms offer a built-in wallet for you to use, and for most beginners this is perfect.
To access your wallet, you will need two keys – alphanumeric strings that are like an account number and password. Your public key is like your bank account number – that needs to be used for you to receive Ethereum.
Your private key is something that you will need to remember – or keep somewhere safe – as this is your password. If you forget your private key, you will be unable to access your Ethereum.
You can also use your Ethereum to stake with the aim of becoming a validator for the blockchain, exchange it for other cryptocurrencies, complete smart contract transactions, or develop and launch Decentralized Apps (dApps). Of course, you can always sell your Ethereum holdings at any point, preferably for a profit.
How to Invest in Ethereum as a Beginner
Learn as Much as Possible
As already mentioned, the more you know about Ether and Ethereum, the better your decision making will be.
There are plenty of online resources to help you, including articles like this, specific blog posts about trading, and lots of YouTube videos if that is your preferred way to learn.
Your trading platform might have some useful information, both about Ether and cryptocurrencies in general, so make sure you investigate the educational provision.
Finally, you can look at cryptocurrency trading courses, which are often managed by self-proclaimed experts who can give you strategies to help you make better decisions and, in the end, make money from your investments.
Select the Right Platform
As a beginner, you want to have as much support as possible – and that is why many platforms have created easy-to-use interfaces and lots of helpful guidance for you.
Although cryptocurrencies have been around for a few years, they are still relatively new – as is the technology that surrounds them. Trading platforms need to cater to the complete beginner as much as they do the more experienced investors, so make sure you are choosing one that will support you in the way you need them to.
Start Small
The best trading platforms will make it easy for you to learn as you go – and this might start with the use of a demo account.
Starting here means that you can have a go at using the platform without risking your capital and play about with different investment strategies too.
When you start using ‘real’ money, always begin with smaller amounts until you feel more familiar and confident – you can always buy more later when you know what you are doing.
Should You Buy Ethereum?
The Benefits of Ethereum
Should you buy Ethereum? Well, Ethereum is a hot topic when it comes to investing in cryptocurrencies, and that is because it is about so much more than just a currency. While Bitcoin was established specifically to be a decentralized currency, the whole Ethereum ecosystem was built around the possibilities that blockchain can offer.
There are currently more than 116 billion Ether coins that have already been purchased, and there is an unlimited number available – this can be seen as a positive against limited coins like Bitcoin, as the market capitalization is not contrived from the predetermined scarcity.
But for many who believe that blockchain is the future, it is the tokenization of the economy that drives people to invest. According to a report by the World Economic Forum, as much as 10% of the global GDP might be stored on the blockchain by 2027.
Added to this is the ability for Ethereum-based smart contracts to be used to purchase assets from around the globe, without a third party or any need for currency exchanges and the price differences they can create. Instead, a buyer from another continent can purchase a car, a boat, or even a home using Ether and a Smart Contract.
One of the last reasons that people are investing in Ethereum is the possibilities offered through decentralized apps (dApps). Finance apps, Internet of Things, even medical record databases and all sorts of other applications can be run through the blockchain thanks to Ethereum, and that means there is no possibility of censorship. The blockchain is not owned or managed by a government or an agency – instead, it is managed through consensus by the people who own a stake in Ether.
The operational change that Ethereum underwent back in 2022 has seen the way that transactions are validated, change and move away from the environmentally damaging methods that are still in use by other cryptos, including Bitcoin.
Up until this point, transactions were validated by a process called Proof of Work, where an alphanumeric string of characters had to be solved using computing power. To earn ETH, and to have your version of the blockchain ledger accepted, you needed to solve the string – and it became increasingly difficult, needing more and more computing power. This sheer volume of power needed meant that it was draining energy and becoming inefficient.
The Proof of Stake method means that potential validators need only to stake their ETH amount – the more you have, the higher your chances. It is a secure way of completing it, too – the only way to make decisions on the blockchain would be if you owned 51% of it (which is financially unviable).
The Downsides of Ethereum
Like any cryptocurrency, the main problem with Ether is volatility. While not being tied to anything physical makes it decentralized, it also means that prices can change according to the mood of the public, people talking about it, and even the mainstream news.
This volatility is not something that will change overnight, and even some cryptos are working to make it better (tethering to other currencies to become what is known as a stablecoin).
Aside from the volatility is the security aspect. While encryption is a major part of the cryptocurrency environment, there is always a risk of bad actors and hackers getting access to trading platforms and online wallets.
The other thing to mention about the security of your Ether is that you must remember your private key if you want to be able to access your cryptocurrency – if that is lost, there is no way to retrieve it and it is gone forever.
Frequently Asked Questions
How do I buy Ethereum in the UK?
To buy Ethereum in the UK, you need to open an account with a cryptocurrency trading platform and make a deposit – then choose Ether and click buy.
When you have purchased the Ether, you can choose to keep it in a personal hot or cold wallet or store it in the wallet provided by the trading platform.
Where can I buy Ethereum in the UK?
There are many places where you can buy Ethereum in the UK, such as eToro, Pepperstone, Binance and Crypto.com – these sites are all excellent for beginners and are well-regulated.
How do I buy Ethereum Classic?
There are two different types of Ethereum available following a hard fork – and that means you can buy both Ethereum Classic and Ethereum 2.0. Make sure that the platform you are using offers Ether Classic, and then you can buy it in the same way you would buy Ether 2.0.
How do I buy Ethereum with PayPal?
Some trading platforms will allow you to fund your trading account using eWallets like PayPal – then all you need to do is choose PayPal as your funding source instead of a card or a bank transfer and make the transaction as normal.
When should I buy Ethereum?
Ethereum, like other cryptocurrency, is very volatile – so the best time to buy is when the market is lower. This will give you more Ether for your money, which is the best way to invest.
It might be a good idea to look at the past performance of the Ether token before you commit so you can try and gauge where a price dip might come.
Why should I invest in Ethereum?
Ethereum is about so much more than just an alternative currency; it is the foundation token for a whole blockchain ecosystem. Ether can be used to complete smart contracts and fun decentralized apps, and exchanged for both fiat currency and other cryptocurrencies.
How much Ethereum should I buy?
Most people choose to invest in a proportion of Ether, as the price is quite high now – but the amount will differ from person to person. When considering how much you should invest in Ethereum, always remember that it is a gamble – so never invest more than you can afford to lose.
How much is Ethereum worth?
The current value of Ethereum (as of 12/07/2023) is $1,888.55 or £1462.24. This value can change quickly, however.
How many Ethereum are there?
About 116 billion coins have already been purchased, but the total amount is unlimited – which is different from Bitcoin, as that cryptocurrency has a total number that can not be exceeded.
Should a beginner buy Ethereum in the UK?
Ethereum is an excellent starting point for beginner crypto investors in the UK – it is a relatively well-established currency that remains popular, which means the price has not seriously dropped for a few years.
The Ethereum blockchain is innovative and has a lot of potential to disrupt fiat currency and traditional banking practices, too.
What is the best trading platform to invest in Ethereum in the UK?
There are several different platforms where you will be able to invest in Ethereum in the UK. Brokers like eToro and Pepperstone offer cryptocurrency alongside other trading instruments, while Binance and Crypto.com focus only on different altcoins.
Is buying Ethereum risky?
Buying Ethereum, like any cryptocurrency, is risky. As an investment, it is very volatile, with the price as likely to drop unexpectedly as it is to rise – but for some people, that is the draw.
The bottom line is that you should never invest more than you can afford to lose, no matter where you are investing it.
Final Thoughts
Ethereum is a long-established and popular cryptocurrency, with many applications thanks to the Ethereum blockchain producing things like Smart Contracts, NFTs, and dApps.
If you want to start investing in Ether, you will need to choose the best trading platform for your needs and make sure that you do your research on the altcoin so that you know what you are getting into. Deposits can usually be made by card, but sometimes through eWallets or by exchanging cryptocurrency that you already hold.
If you are considering investing in cryptocurrency, Ethereum might be a good place to start – just make sure to be mindful of your own risk levels and never invest more than you can afford to lose.