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How to buy ethereum in the UK

You may have heard a lot of talk about ethereum lately – the cryptocurrency went live in 2015 and has generated lots of buzz ever since.

Find out how to buy ethereum with this straightforward guide.

How to buy ethereum – 4 easy steps

  1. Choose one of the best crypto exchanges like Coinbase, Gemini, or BlockFi and open an account.
  2. Add money to your account.
  3. Buy the ethereum you want.
  4. Store ethereum securely through a “hot” or “cold” wallet until you want to sell.
ethereum logo

1. Decide on a crypto exchange

Before you buy ethereum (ETH), you should first decide on which crypto market best suits your needs.

A cryptocurrency exchange is a trading platform that allows you to trade different cryptocurrencies.

Different exchanges charge different types of transaction fees, so you should make sure you fully understand how much you will pay.

Some cryptocurrency exchanges also offer in-built wallets (more about this below). This means they offer an online location to store your ethereum as part of the service.

There are plenty of exchanges to choose from, and some may be more suitable for beginners than others. Here are three you might want to consider.

Coinbase logo

Coinbase

  • Buy ETH crypto with Coinbase
  • Built-in wallet
  • Simple interface

Coinbase offers strong security and good for buying crypto

Coinbase allows you to buy and sell many different types of cryptocurrencies, including ethereum. The platform allows you to make these purchases through bank transfer, or you can buy ether with a debit card or credit card.

The platform has a simple interface and comes with an in-built wallet. Coinbase also offers strong security measures to protect your investments, such as two-factor authentication and wallet insurance against theft.

Transaction fees tend to be on the higher side with Coinbase. You will typically pay up to 0.5% on every trade and a further 1.49% for crypto wallet or bank account purchases.

Users can pay to access Coinbase Pro, which offers more features and typically lower fees.

Capital at risk.

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Gemini logo

Gemini

  • Buy ETH crypto with Gemini
  • Uncomplicated interface
  • Offers a learning hub

Gemini is great for crypto beginners

Gemini doesn’t have as much trading volume as Coinbase, but it is great for beginners. It has an uncomplicated interface and even offers a learning hub, which aims to teach users about crypto investing.

The fee structure on Gemini is typically higher than others – you will be charged a fixed fee for trades under $200, or 1.49% for trades over $200.

You can buy ethereum with your credit card or debit card on Gemini, but you will likely pay a charge of 3.49% for doing so.

As with other crypto exchanges, Gemini comes with two-factor authentication and wallet insurance to protect your investments. A hot wallet is also included with this platform – find out more about “hot and cold” wallets below.

Gemini was actually founded by the Winklevoss twins, who are best remembered for their legal battles with Mark Zuckerberg over the creation of Facebook.

Capital at risk.

BlockFi logo

BlockFi

  • Buy ETH crypto with BlockFi
  • Typically lower fees
  • Good level of customer support

BlockFi has lower trading fees

One of the good things about BlockFi is its typically lower fees. You will only be charged up to 1% for trades.

It is worth keeping in mind, however, that BlockFi only offers one free withdrawal every calendar month. Any further withdrawals after this during the same month may be subject to withdrawal fees.

You may also have to wait up to seven days for withdrawals to take place. This is essentially like a notice period you would get with certain savings accounts.

Like the other previously mentioned crypto exchanges, BlockFi includes two-factor authentication. While they do offer wallet insurance, this only covers hot wallets (see more below).

BlockFi is also known for having helpful customer support services. If you run into any technical issues, you can submit a ticket, contact an expert on their helpline or speak with a chatbot. They also offer a help centre to answer common questions you may have.

Capital at risk.

2. Add money to your account and buy ethereum

Once you are ready to buy ethereum, just add funds to your crypto exchange account using a debit card or credit card. Then, all you need to do is search for ETH on your exchange and input how much you wish to purchase.

Depending on what exchange you chose, you can buy ETH in different ways. Bank transfers and credit card purchases, for example, are some common ways to do this, though you should make sure you are mindful of any additional fees.

Some credit card providers see cryptocurrency purchases as a cash advance, so you should double-check your provider’s stance on this before you make the purchase. This is because you may face cash advance fees on top of your crypto exchange fees.

As of 24 March 2022, one ethereum costs £2,314. If you are wondering “how much ETH” to buy, you don’t have to buy a whole coin – instead, you can purchase a fraction of a coin.

3. Store your ethereum in a “wallet”

If you are a beginner, you will have most likely chosen a crypto exchange with an in-built wallet.

What’s better is, most major exchange platforms provide insurance cover over your wallet in the event of hacking or theft.

You don’t need to hold your crypto in your exchange’s in-built ethereum wallet, however. If you are still worried about the theft of your investment, you can hold it in a third-party wallet. There are two different types of external wallets.

Hot wallets hold ether online

These crypto wallets are connected to the internet and can be accessed by any computer or smartphone.

An example of some third-party hot wallets includes Trezor One or Metamask. Before deciding on a hot wallet, however, you should take note of any fees – some hot wallets may, for example, charge you to transfer cryptocurrency to and from them.

It is worth keeping in mind that while hot wallets can be more convenient, being connected to the internet at all times can potentially make them more difficult to protect from theft.

Cold wallets can hold multiple currencies offline

Cold wallets are essentially just tangible devices, such as external hard drives, that store your ethereum.

Since they aren’t connected to the internet at all, they are typically much safer than hot wallets as hackers may have a harder time accessing them.

You will need to pay to obtain a cold wallet, and they can be far less convenient to use since you need to physically have the hard drive to access your wallet. Once you have purchased it, however, you don’t need to pay any fees to transfer crypto to your cold wallet.

Can I further protect my ethereum investment from hackers and scammers?

To make sure your crypto investment is fully protected, you should set up two-factor authentication on your wallet or exchange account. Most crypto exchanges offer this service, so it is best to take advantage of it.

4. Hold your Ethereum until you’re ready to sell ETH

If you want to make a profit by trading ethereum after you have purchased and stored it, you may want to closely monitor how the prices change.

Ethereum and other cryptocurrencies tend to be very volatile, meaning the price may increase and decrease rapidly. If you’re looking to make a profit, you want to make sure that you sell when the price is higher than it was when you bought your ethereum.

When you decide it is time to sell, the process is simple. You just need to go back into the exchange and input the amount you wish to sell, and the rest will be done for you.

You should keep in mind that profits from selling ethereum may be subject to Capital Gains Tax (CGT) if you make profits in excess of your CGT exempt amount (£12,300 in the 2022/23 tax year).

Is ethereum a good investment?

Like many other cryptocurrencies, the value of ethereum can rise and fall sharply. For example, between July 2021 and November 2021, the value of 1 ethereum rose from around $1,786 (around £1,350) to $4,811 (around £3,640).

However, since then, ethereum’s price has fallen back to around $3,050 (around £2,310).

If you are thinking of buying ether (ETH) and holding it as a long-term investment then it is possible you could make gains. However, remember there is a risk when you buy ETH, as the value could fall after purchase.

Ready to start buying ethereum? Read on to find out more about the easy steps.

How can I purchase ethereum?

Buying ethereum is easy using a crypto exchange like Gemini or Coinbase.

You simply follow these easy steps:

  1. Choose one of the best crypto exchanges and open an account.
  2. Add money to your crypto exchange account.
  3. Buy the ethereum you want.

What is ethereum?

Ethereum, or ETH, is a type of digital, decentralised cryptocurrency where all transactions are recorded by blockchain technology.

Think of ethereum like any other currency – you can make purchases with it, or you can invest in it with the aim of selling when its value rises. Despite this, it may be difficult to make purchases with ethereum, as there are few companies that accept it in return for goods and services.

Cryptocurrencies such as ethereum differ greatly from government-backed fiat currencies. While traditional forms of currency are managed in centralised hubs, cryptos operate in a decentralised structure.

Traditional currencies also tend to be backed by commodities, such as gold or silver. Cryptocurrencies, however, are not backed by any commodity.

As mentioned, the ethereum network uses a blockchain to operate. This is essentially a database that stores information in a digital format. Think of it as a digital ledger – it records all transactions and stores information about all coins on the market. The blockchain doesn’t rely on external authorities to confirm the authenticity of the data either, making it fast and efficient.

The ethereum blockchain works in the same way – it uses things called “smart contracts” that automate the execution of trades. So, all participants involved know the exact outcome of the transaction without any external involvement needed.

Should I buy ethereum?

If you have always wanted to start trading cryptocurrencies, ethereum can be a good place to start. After all, it is the second-largest cryptocurrency and is usually traded in large volumes.

Ethereum is also starting to become more supported by mainstream companies. For example, giants such as Microsoft and JP Morgan have started supporting the ethereum blockchain, which may keep demand high and increase its value.

As with any type of investing, you should aim to diversify your portfolio, especially when it comes to cryptocurrency. This is because it tends to be very volatile, meaning the value may change frequently. If you put all your eggs in one basket and only invest in ethereum, you may lose money should the market experience a downturn.

You also want to make sure you still have enough cash left over to cover any emergencies should they arise.

Buying ETH FAQs

How much does it cost to buy 1 ethereum?

As of 24 March 2022, 1 ethereum costs $3,054 – equivalent to around £2,317.

The value of ethereum can be volatile. For example, in July 2021 the value stood at $1,786 while in November 2021 it had reached a high of $4,811.

So, when you come to buy eth, you’ll find the value changes minute-by-minute. An ethereum worth $3,000 today could be worth $2,500 or $3,500 tomorrow.

Where is the best place to buy ethereum?

The best place to buy ethereum is typically on a crypto exchange. Popular choices include Coinbase, Gemini, or Blockfi. Other crypto trading platforms include eToro and Revolut Crypto.

A note about cryptoasset regulations

Crypto assets are not regulated financial products so please be aware that trading them carries a considerable amount of risk for your capital.

Cryptocurrencies and other digital financial services are also not covered by existing consumer protection laws.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested when you buy crypto.

Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

This article is for informational purposes only and does not constitute financial investment advice. All contents are based on my understanding of HMRC legislation, which is subject to change.

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