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Ethereum (Ether) launched mid-2015 but quickly surpassed the market cap of all other cryptocurrencies—except for Bitcoin. At the start of 2017, the price of 1 ETH was less than $10. Since this time, the price at one point reached higher than 40 times its 2017 starting price.
This incredible growth in price, combined with a wider understanding of the Ethereum’s potential, has many new investors looking to buy Ethereum.
The easiest way to buy Ethereum is to use an online cryptocurrency exchange. As cryptocurrencies have soared in popularity over the last few years, there’s been no shortage of new businesses looking to facilitate exchanging them.
With so many choices to choose from, our goal is to help you find the exchange that’s right for you. This guide will detail the differences between exchanges, while linking to complete reviews and user guides of each exchange mentioned.
While all of these cryptocurrency exchanges do the same thing (facilitate buying and selling cryptocurrencies), they operate differently. To make things easier to understand, we’ve outlined 3 groups of exchanges:
Group A – This first group of exchanges allows users to trade fiat currencies (USD, EUR, GBP, etc.) and cryptocurrencies on an open market. These sites function similarly to traditional forex and stock exchanges, allowing users to make limit, market, stop, and even margin trades.
Typically, these sites have limited deposit and withdrawal methods for fiat currencies, most commonly offering bank wires and bank transfers.
While these sites can be complicated for new users, they typically have the lowest fees of any group.
Exchanges in Group A include Gemini, Kraken, GDAX, & CEX.IO (CEX.IO also offers group B offerings).
Group B – The second group of exchanges operate more like “online cryptocurrency retail stores”. Rather than have their users make trades on a market, they directly facilitate the purchase and sale of cryptocurrency with their users. This creates a more beginner friendly process than group A exchanges.
These exchanges also typically allow users to make purchases with debit and credit cards, in addition to bank wires/transfers.
While these sites are typically thought of as the easiest ways for beginners to buy and sell Ethereum, they charge higher fees than Group A exchanges.
Exchanges in Group B include Coinbase, CEX.IO, and Coinmama.
Group C – The last group of exchanges work similarly to Group A exchanges, but only offer cryptocurrency trading. This means on these exchanges you can only trade cryptocurrencies for other cryptocurrencies. This group does not offer the ability to buy or sell cryptocurrencies with fiat currency.
Exchanges in Group C include Bittrex and Poloniex (we do not recommend Poloniex).
Numerous startups looking to help customers buy and sell cryptocurrencies have sprouted in response to the increased demand for cryptocurrencies. With so many options to choose from, here are 3 of the most widely recommended and trusted beginner-friendly places to buy Ether.
Coinbase is our top recommendation for beginners looking to purchase Ether. Coinbase offers functions that serve as training wheels for newcomers.
With its initial launch in 2012, Coinbase aimed to create an easier way to buy and sell Bitcoin. Unlike traditional cryptocurrency exchanges, Coinbase directly facilitates the exchange of cryptocurrency to its users. Their site comes with a variety of advantages over other exchanges:
1. Your guaranteed price and fees are clearly stated at the time of your order. This means no dealing with complicated market interfaces.
2. You can lock in prices for your first order faster on Coinbase than on most exchanges. Coinbase locks in your price when you initiate an order, rather than waiting for deposits to clear. You will receive the amount of cryptocurrency you purchased, at the set order price, after your deposit has cleared.
3. You can use credit and debit cards for instant Coinbase purchases, although your limits will be substantially lower than if using a bank transfer.
Sensing an increase in demand for Ether, Coinbase added Ethereum support in 2016. Their Ethereum services now come with the same benefits as their original Bitcoin service.
While we recommend storing cryptocurrency in a wallet that you have full control over, Coinbase does offer one of the most secure online wallets. You can use your Coinbase wallet to store, send, and receive Ethereum.
In addition to being easy to use, Coinbase is also one of the most trusted names in cryptocurrency. The company is based out of San Francisco, California and has received numerous investments from big-name venture capitalists, and is notably valued at $1.6 billion. As a U.S. based digital asset exchange, the company is also compliant with all required laws and regulations. Coinbase has helped over 11 million users in 32 countries exchange more than $20 billion in digital currency.
Tyler and Cameron Winklevoss founded Gemini in 2015. The company is based out of New York, thus regulated by the New York State Department of Financial Services. Despite being around for less time than some competitors, they’ve quickly built a great reputation.
Unlike Coinbase, Gemini operates as a more ‘traditional’ cryptocurrency exchange. This means that users can use the website to trade with other users on their market. The site functions like a traditional stock or Forex platform.
Gemini users can trade Bitcoin, Ethereum, and USD. Deposits and withdrawals are unfortunately only available via bank transfer and bank wire. However, the site does allow you to begin trading while your deposits are still processing. This gives users the ability to lock in purchase prices faster than almost all other traditional exchanges. Gemini also still comes with the very low fees associated with “Group A exchanges”.
While we do think Gemini is slightly less beginner friendly than Coinbase, their team has done a phenomenal job designing an interface that’s easy to use.
based out of London, CEX.IO represents another long-trusted method of buying cryptocurrency.
The company was initially started in 2013 as both a Bitcoin exchange and cloud mining service provider. In 2016, the company added Ethereum to their platform and ended their cloud mining service. They’ve also recently added Dash and Zcash to their platform.
CEX.IO offers both a full exchange, as well as easy buy/sell methods. The site accepts deposits and withdrawals with credit cards and bank transfers. They also give verified members higher credit card limits than Coinbase.
The downside to CEX.IO, compared to Coinbase, is its potential higher fees. Still, CEX.IO is a good option for users wanting to make large purchases with credit cards, or users in locations not supported by Coinbase.
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