Ethereum has become big in recent years with it becoming the second-largest cryptocurrency behind Bitcoin, with some experts tipping it to overtake Bitcoin, benefitting as well from the boost the Cryptocurrency market has seen in recent years.
Unlike Bitcoin though, Ethereum has a number of real-world applications which makes it even more valuable than other cryptocurrencies, but even today there is still a lot of confusion and many questions surrounding how to buy Ethereum in the UK.
Many people still say they are confused about the various platforms and coins, what to buy, when they should buy it and how they should buy it.
At a fundamental level, the best way to purchase cryptocurrency is using either a trading platform or cryptocurrency exchange. A trading platform works as a service that sits between different markets to help facilitate either the purchase or sale of cryptocurrency.
At a really simplistic level, they match your buy price with someone’s sell price. Conversely, an exchange is a service that helps enable a sale by trading cryptocurrency pairs i.e. I’ll sell X Bitcoin in return for Y Ethereum.
This differs from a platform in the sense of you are going directly to the seller/ buyer rather than going through an intermediary or broker. What makes this confusing is the number of similarities between these two ways of buying or selling cryptocurrency.
One difference is that exchanges tend to charge steeper fees to fund or withdraw from your account in fiat currency. Also, because brokers are offering a regulated product and/ or service, there tends to be more security in their services and a lower risk of being the victim of a hack as these services are audited by national governing bodies, such as the SEC or FCA.
What will work best for you though ultimately is down to what you’re looking to achieve and what your strategy is.
If you are a large or longer-term cryptocurrency trader looking to either add to your portfolio or exchange currencies, then an exchange may be better suited towards your goals. If you’re newer to the game or have short to medium-term goals, then a trading platform may be a better option for you.
How to Buy Ethereum in the UK Using Our Preferred Trading Platform: eToro
1. Sign up with eToro
First, you need to create an account with eToro. You do this by going to their site, www.etoro.com and selecting the join now button and the below form will appear, complete it and it will take you to the next page.
2. Account verification
Verify your account. When prompted, complete your profile, and keep your National Insurance number nearby to get everything verified. You’ll need to upload a valid proof of identity (e.g. passport or driver’s license) and proof of address (e.g. bank/credit card statement, internet bill).
3. Deposit fiat currency
Connect your bank or e-wallet, deposit funds to fund your account using the following options pictured below. You must have fiat currency in your eToro account to buy ETH.
4. Navigate to Ethereum and make a purchase
Once your funds are available in your account, you’ll be ready to buy Ethereum! Simply navigate to the Ethereum page and make your first purchase.
5. Ethereum is now added to your eToro portfolio
Best Ways to Buy Ethereum in the UK
When people think about eToro, cryptocurrency isn’t always the first thing that comes to mind. As a large trading platform, trading everything from Indices, to stocks, commodities and even currency pairs, eToro was a natural fit for expanding into the Crypto space.
|Fees||Cryptocurrencies Supported||Transaction Types|
|$5 for withdrawals (even for UK investors), 0% on trades, although spread costs apply, eToro also only operates in USD so you will also face spread costs for any other currencies||18 cryptocurrencies supported||Buy, sell, market orders and limit orders|
eToro is a great platform to purchase cryptocurrency as it doesn’t charge any fees for depositing funds or trading except spreads and currency conversion if depositing any currency except USD. eToro does also charge a $5 fee for withdrawals and subject to a minimum amount of $50.
eToro will also charge you for the conversion as part of the spread when you convert your money from USD to GBP so that is one to consider, but a way around this would be to use a service that gives better USD/GBP services like Wise or Revolut to deposit or withdraw funds from and bypass this issue.
Their platform supports not only a wide variety of cryptocurrencies but also supports contract for difference (CFD) based trading. Another great benefit of eToro is its reputation and the security that comes with that.
They are by far one of the most secure platforms, which is definitely something that should be considered when looking for a platform to buy Ethereum. On top of this, the platform offers an intuitive and great all-around experience, with good rates and no hidden fees.
One thing to consider with eToro is that the withdrawals process can be slow, which can be painful if you want your money back quickly. Another thing to consider is that the minimum withdrawal amount is $50, meaning to be able to withdraw your money you need to have at least that amount in your account.
With the above in mind, eToro makes a great platform to buy and trade Ethereum for retail investors who are looking to start trading in cryptocurrencies as a more speculative investment.
It also makes a great platform for those who already have investments and wish to diversify under one platform. It’s also worth considering that whilst they only support USD for funding and withdrawing, the bypass of using a service like Wise to avoid those costs negates this issue.
All things considered, eToro is probably the best service for buying Ethereum as it combines, lower fees, good coverage of currencies, a crypto wallet, and the ability to have it on the same platform as other investments in your portfolio.
|Great for retail investors looking to diversify their portfolio under one roof||Only funds in USD – although there are workarounds to avoid these costs, this is still not the best experience|
|Easy to use app and enjoyable user experience||Only supports 18 cryptocurrencies, compared to other sites this is lower, however, the top 10-15 cryptocurrencies account for 90% of the ones that are used|
|Low costs for actual trading and execution of deals|
|Access to a cryptocurrency wallet|
As a crypto exchange, Binance does cater to slightly different markets than eToro but it’s still a great place to buy cryptocurrency. Binance is the world’s largest cryptocurrency exchange supporting over 500 different cryptocurrencies.
|Fees||Cryptocurrencies Supported||Transaction Types|
|0.02% – 0.1% purchase and trading, 3% to 4.5% for debit card purchases, free single Euro Payment Area transfer, Free UK bank transfers supported by the Faster Payment System||Over 500 for global investors||Limit order, market order, stop-limit order, trailing stop order, post-only order, peer-to-peer trading, margin trading, one-cancels-the-other order|
Binance is a great option due to their fees starting at 0.02%-0.1% for trades and purchases, they have some of the lowest in the market and don’t have any account charges.
They also support the faster payment service in the UK meaning payments from bank accounts are not only free but should arrive in under an hour (although normally they arrive in under 15 minutes.
Further to this, Binance allows customers to buy Ethereum with their GBP balance using the real exchange rate whilst also taking advantage of their low fees. This is useful as a large number of platforms look to also include additional fees as part of the exchange rate process too.
Whilst Binance is a great platform, there are some things that are worth considering before using it as a platform. Firstly, there is no built-in wallet, meaning users will need to source their own wallet too, which isn’t an issue but it’s worth noting.
Also, Binance can be very complex, even to experienced crypto traders, but given it’s a crypto exchange it may not make it a great place for less-experienced traders to be starting out.
Binance would be a great platform for investing in Ethereum for someone with more experience in cryptocurrency trading as it offers both lower fees and great functionality to those who know how best to utilise them. It can however be a little confusing and even overwhelming for those who have little experience.
|Free and fast funding of accounts||Commission charges for trades – whilst cheap there are other platforms that don’t charge these|
|Huge number of currencies supported – the largest number in the market||Fairly complex user experience – definitely designed for more experienced traders|
|Large range of transaction types supported|
The biggest name in cryptocurrency is Coinbase. Having built themselves a great reputation in the industry, they are another great option to use when buying Ethereum.
|Fees||Cryptocurrencies Supported||Transaction Types|
|1.49% for standard trades, 3.99% for instant buys, free faster payments, 2% plus £0.55 for instant withdrawals too. Also charges a spread of around 0.5% for all trades plus a variable fee between £0.99- £2.99||51||Buy, sell, send, receive, and exchange|
Like eToro they have a really intuitive application that is really easy to navigate. Also, and more critically, Coinbase is well known by regulators and trusted by them too, which is incredibly powerful as it helps reduce some of the risk and volatility that a regulator can inadvertently impose on the industry.
On top of this, like all the other platforms, Coinbase offers a wide range of cryptocurrencies to purchase. Finally, it is worth noting that Coinbase offers a crypto wallet, which is a great additional feature, especially for those just starting out.
Before jumping in though, there are some things to be aware of when using the Coinbase platform. They have quite steep fees, sitting at 0.50% per trade, $10 per deposit and $25 per withdrawal, which compared to Binance and eToro makes them very steep.
Another issue is it has limited potential for more advanced traders meaning those who get into trading crypto on the platform may find themselves looking for a new platform.
Coinbase is a great option again for those looking to get into cryptocurrency investing as it offers a lot of great features for people who aren’t too sure where to start. That being said it may not add much value to more experienced users.
It also only allows investors to invest in cryptocurrencies, so if you have assets sat elsewhere, you’ll need to manage two separate accounts, which may not make it as useful as a platform like eToro.
|Free faster payments in the UK||Fairly complicated fee structure, which feels like you’re being charged for something new at each step|
|Good selection of currencies supported||Not great for more experienced investors – meaning you may have to change platform at some point|
|Access to cryptocurrency wallet if needed|
What Is Ethereum?
At a top-level, Ethereum is a decentralised, open-source blockchain with smart contract functionality. It is the second-largest cryptocurrency, following Bitcoin. It also underpins a lot of other technologies and is far more energy-efficient than other cryptocurrencies.
Why Buy Ethereum?
Ethereum is a great cryptocurrency to consider as it shares a lot of similarities to Bitcoin, but Ethereum also has traits Bitcoin does not.
To start with it is far more energy-efficient (it claims 99.95% less energy usage than its competitors), this is especially important in the context of big names, like Elon Musk saying they would accept Bitcoin once it becomes greener, positioning Ethereum to be a great substitute.
Ethereum is also the backbone for other applications that are really beginning to take off, like non-fungible tokens (NFTs). NFTs aren’t just a novel way to buy things.
They’re a great way to purchase something whilst guaranteeing authenticity due to it being built on the blockchain. We’re really only seeing the beginning of NFTs and their applications, meaning Ethereum has other applications, unlike Bitcoin which is just a holder of value.
Ethereum Price Analysis and Prediction
Ethereum (ETH) saw a huge increase in the first half of 2021 going from around £400 per coin, skyrocketing to a high of just over £2,900 in May. Right now, Ethereum sits at £1,700 per coin, however, a large number of cryptocurrencies dropped at the same time, indicating this was more of a market shift, opposed to something specific about Ethereum.
Whether Ethereum is going to go up or down over the coming months and years is still open to debate. Goldman Sachs announced that it’s going to launch futures and options contracts on ETH but at the same time the People’s Bank of China is looking to stop cryptocurrency trading, big announcements like this make it challenging to predict the future price of ETH.
Many experts believe Ethereum could overtake Bitcoin as the largest coin as it offers a lot of real-world applications.
Where Ethereum may struggle though is from other market forces that impact cryptocurrencies in general. For example, if a regulator blocks a cryptocurrency trading platform or a large organisation cites concerns, it can have a huge effect on the wider market which would impact the price of Ethereum.
Things to Remember Before Buying Ethereum
Don’t put in more than you can afford to lose – remember, Ethereum like all cryptocurrencies, is speculative and you may lose more than you gain, make sure you only trade amounts you’d be willing to lose.
Resist ‘fear of missing out’– avoid trading on emotions, FOMO is the Achilles heel of many traders who jump in when it’s too high and don’t stay the course, meaning they end up losing money as they invested on an emotional level without thinking things through.
Understand tax consequences – make sure you stay on the right side of your taxes, and cryptocurrencies, like everything else in life, are subject to taxes. Make sure you know your tax liabilities and comply with them.
Long vs short-term investment – consider the benefits and drawbacks when looking at trading any cryptocurrency as a long versus short-term investment. It’s also worth looking at whether your chosen platform or exchange is better suited to longer or shorter-term positions.
Is Ethereum legal in the UK?
Yes, buying Ethereum is legal in the UK.
Will Ethereum overtake Bitcoin?
Some experts believe it could, this down to Ethereum’s real-world implications and not just its value holding properties
Can you buy less than 1 Ethereum?
Yes, fractional trading is available with Ethereum meaning you don’t have to buy 1 token, you can buy part of it, down to 0.001 parts of the coin.
Is it too late to buy Ethereum?
I wouldn’t say it’s too late to buy Ethereum as cryptocurrency and some of the technology on the back of it (NFT’s) are still in their infancy.