As Ethereum is the second-largest cryptocurrency by market capitalization, it is always an attractive investment for crypto traders. In this guide, we will show how to invest in Ethereum in the UK and walk investors through the process step by step. Additionally, we will give some advantages and disadvantages of investing in the coin, guidelines for safe investing, and recommendations for the best exchange platforms to use.
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What is Ethereum?
About
Ethereum upgrades the basic formula of ‘value communication’ to enable coding in general, as it supports further programming and deployment of decentralized applications. What’s more, with some ETH, anyone can do it without having to create their own blockchain network. This, in turn, drives demand for ETH and increases its market value.
In 2022 Ethereum shifted from a proof-of-work (PoW) to a proof-of-stake (PoS) system, effectively replacing mining with staking. The shift has made Ethereum more efficient, secure, and energy-efficient, which solidified its position as the second most popular cryptocurrency on the market. It is highly decentralized and jointly controlled by a community of developers, stakers, and users.
According to its public roadmap, Ethereum shows no signs of complacency and continues to pursue innovation. This makes investing in Ethereum in the UK potentially lucrative for many investors.
How to invest in Ethereum in the UK?
For those who never engaged in crypto trading, getting started might appear difficult. Contrary to the initial expectations, it takes just a couple of steps to start investing in Ethereum in the UK. Ultimately, you can resort to hiring a professional, but it is much more efficient to skip the intermediary and make the purchase yourself through an online brokerage platform.
The first step is to take seriously investing in cryptocurrency. There is always a certain chance that you will lose your money. Adhering to certain guidelines, however, should minimize the risks. If you maintain a steady hand and a sharp mind, you increase your chances of receiving significant returns.
Investing in Ethereum in the UK is straightforward and can be done in several steps explained below.
How to invest in Ethereum in the UK: step-by-step
In the following section, we will cover each step required to invest in Ethereum in the UK:
Step 1: Choose a broker
Due to its popularity, many platforms offer Ethereum. Bear in mind that some exchanges are better than others, and some should be discarded at the start.
There are several ways in which you can approach such an investment. On one hand, day traders reap profits from short-term swings in price. On the other, hodlers hold their assets over extended timelines expecting to cash in on the eventual surge in the price of the token.
Brokerage factors
There are certain factors that you want your brokerage platform to have in all cases:
- Fees: Naturally, you want as lower fees per transaction as possible. These add up over time to take a large chunk away from your profits. However, this is not the only factor and should not take precedence over the rest. Depending on the platform and the payment method, ETH transactions can incur fees of up to 5% per transaction;
- Security: When it comes to cryptocurrency exchange platforms, staying safe means looking for regulated brokerages only, such as the one registered with the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). Make sure that your platform of choice employs advanced security measures such as 2FA (two-factor authentication) and SSL;
- The availability of different tokens: A diverse selection of tokens and other assets indicates that the brokerage has high compatibility within the market. The fact that you’re looking for Ethereum does not mean that you should not pursue high diversity of crypto;
- UI and UX: Pay attention to the level of detail that the exchange gives to the user interface and user experience, as it can indicate the overall professionalism of the company;
- High liquidity: A desirable exchange service can quickly convert cash into cryptocurrency (and the other way around). This can be confirmed by looking up the trading volume of the exchange, as it is indicative of high liquidity;
- Deposit method: Ensure that the crypto exchange platform supports your preferred deposit method;
- Advanced trading and financial features: Investing does not end with buying Ether. As an investor, you are required to monitor your resources and balance your portfolio. Look for advanced trading and financial tools that will ease your interactions and help you manage your funds better.
Where to buy Ethereum in the UK?
Even when you know what to look for in a cryptocurrency exchange platform, the search itself can be quite time-consuming and labor-intensive. If you want to skip the hassle and go straight to our favorite, consider investing in ETH on eToro, a platform that provides:
- 1% fees for cryptocurrency;
- No account minimums;
- Trading in 30+ cryptocurrencies;
- Exhaustive guides and tutorials;
- Copy-trading: Ability to match the moves of top-performing traders.
Best Crypto Exchange for Intermediate Traders and Investors
-
Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.
-
0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
-
eToro USA is registered with FINRA for securities trading.
Step 2: Create and fund your brokerage account
To properly conclude this step, you might need to verify your account by providing proof of identity, such as a state-issued ID or a driving license.
To fund the newly-created account, you will have to supply it with cash through some of the supported payment methods. Some of these include linking a bank account directly, using a debit or prepaid card, or relying on a third-party financial service. Note that Credit Cards and PayPal are not available for deposits for users under the FCA regulation.
Note
Step 3: Do some research in the UK on Ethereum before you invest
Investing in any cryptocurrency bears a significant level of risk. The prices are constantly fluctuating, and even the largest altcoin Ethereum remains prone to the aftermaths of the crypto winter.
When considering an investment in Ethereum within the UK, it is imperative to assess the current price trends, gauge the prevailing market sentiment, and stay informed about recent developments in the space.
Step 4: Determine the amount you want to invest in Ethereum in the UK
Consolidate your investment funds and decide how much you want to invest in Ethereum in the UK.
Note
Step 5: Place your order and buy ETH
So, if all the steps above have been completed, you are ready to invest in Ethereum and buy ETH. Log in through your desired platform (in our case, this will be eToro), find the ‘Cryptocurrencies’ menu, look for ETH, and type in the amount of Ether you want to purchase.
With eToro, you have a couple of types of orders:
- Market order: This order will execute the purchase of ETH at the best available market price at the given moment;
- Limit order: An upgrade over the classic market order, the limit order purchases the cryptocurrency when the price of the asset goes below the limit that you designated.
Step 6: Monitor your investment
Any serious investment in Ethereum will require both time and effort. As all traders know, the cryptocurrency market environment evolves daily, so checking and comparing it to your general investing strategy regularly is necessary.
Ensure that you’re keeping pace with the market, knowing the level of risk you’re undertaking, and following regulatory updates. Redistribute and balance out your assets across a diverse portfolio.
Ethereum price UK
Should I invest in Ethereum in the UK?
In crypto trading, there is no definite answer to a question like this. Investing in any cryptocurrency carries risk, which is balanced by high-reward potential.
The key to this answer is being informed, at all times, about Ethereum and its performance up to that point, through various sources and analytical tools. We have covered the base of getting informed through media channels and reports, which is a part of the fundamental analysis. However, you should also consider going through the technical analysis. This analysis simplifies various factors, like chart patterns, into simple indicators.
Disclaimer: TradingView does not recommend trading financial instruments based exclusively on the advice of the Technical Rating indicator. These recommendations cannot predict future movements and are meant as assistance for spotting potentially favorable buy/sell conditions if this is consistent with their strategy.
Common mistakes to avoid when investing in Ethereum in the UK
Misjudgments and missteps are common when investing, especially due to the relative novelty of crypto assets and the extreme volatility of the market.
That said, it is wise to make the least number of mistakes possible. The only thing better than learning from your mistakes is to learn from other investors’ mistakes. We compiled a comprehensive guide on the most common mistakes in investing, the more prominent of which are outlined below:
- Lack of research: Heading onto the market and buying ETH without knowing what and why you’re doing it is a guaranteed way to land a net loss;
- Lack of strategy: Without working out a strategy and following it through, you are bound to make a costly decision;
- Short-term thinking: Even active day traders have a long-term goal in their minds. Listening to your emotions leads to impulsive decisions that will hamper your investing prospects;
- Inexperienced use of leverage: Certain exchanges (eToro included) allow you to use leverage, and it is a great way to exponentially increase your stakes. In that case, winning means winning more, but the opposite is also true. Don’t use leverage if you don’t know what you’re getting into;
- Falling prey to scams: The crypto market is still a frontier that isn’t fully explored. In fact, there are still a lot of marauders waiting in ambush for the inexperienced. Beware of schemes like rug pulls and pump and dumps. An offer too good to be true is often a big red flag.
Pros and cons of investing in Ethereum in the UK
Here’s an overview of some important arguments for and against investing in Ethereum to consider:
Pros
- High potential returns: Ethereum offers high potential for rewards as well as ways to earn ETH via staking;
- Decentralization: Ethereum is fully decentralized and autonomous, meaning no authority can set or adjust its price in the face of market trends, only the community of traders, developers, and investors;
- Smart contracts: Ethereum boasts the concept of smart contracts, a feature that gives it the power of a business supercomputer. The fact the network can be used to replace state-level bureaucracy and increase the speed of global transactions gives more value to Ethereum on the whole.
Cons
- High volatility: Cryptocurrency is pretty volatile, more so than the majority of digital financial assets. ETH is no exception, so you will need to be prepared for quite some price swings;
- Smart contract competition: Ethereum was the first blockchain network to implement smart contracts, but others have gone the same path and are looking to dethrone it.
- Security issues history: In 2016, hackers looted $70 million in ETH, which was a major blow to Ethereum and cryptocurrency in general. Since then, the community worked hard to improve the security of the network, and no incidents have occurred since then, but the event is still fresh in many’s memories. Consider storing your ETH in crypto wallets.
Conclusion
From a mere concept to a widespread global financial tool, cryptocurrencies have risen in status to become an undisputable factor in the market. Even as critics revoke their doomsays, digital assets are yet to attain equal status with fiat currency.
In any case, Ethereum is here to stay. Despite its novelty and price volatility, ETH is a highly sought-after investment with large potential rewards for everyone who participates in its investment.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about how to invest in Ethereum in the UK
Can you invest in Ethereum in the UK?
Yes, you can buy ETH in the UK through a regulated and legitimate brokerage platform.
How to invest in Ethereum in the UK?
You can buy ETH in the UK with the help of eToro, the platform of choice for millions of traders.
Where to buy Ethereum in the UK?
Many regulated exchange platforms offer ETH, but we recommend eToro as one of the best options for investing in Ethereum in the UK.
Should I invest in Ethereum in the UK?
Nothing is certain about any cryptocurrency. Whether Ethereum is a good investment or not depends on various factors, including individual financial goals, risk tolerance, and market conditions.
Is investing in Ethereum in the UK safe?
If you pick a safe exchange and respect the security recommendations laid down in this guide, investing in Ethereum is safe.
Best Crypto Exchange for Intermediate Traders and Investors
-
Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.
-
0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
-
eToro USA is registered with FINRA for securities trading.
