2020 Guide on how to buy Ethereum ETH with CFD Broker or an Exchange

Today, cryptocurrencies became widely popular among retail investors and many people made a good profit from investing in this new digital asset class. While some investors are taking a long term view and prefer to buy and hold investment strategy, many others make huge profits from day trading. The volatility of Bitcoin, Ethereum and other popular cryptocurrencies, where the daily moves in price can be more than 20%, presents a great opportunity to make money in active trading. Cryptocurrencies are the only asset class right now where you can still make huge returns on a daily basis and monthly profits reaching 100% or more.

That is why our team at EthereumTrading.pro have written an easy to follow and understand guide on how you can buy and sell Bitcoin, Ehereum and other cryptocurrencies, using different platforms and methods currently available for individual investors. In this article, we are going to cover the most popular and trading platform and explain how you can start investing in Ethereum with one of them. 

Buy/Sell Ethereum with CFD Brokers – AvaTrade or IQ Option
Buy/Sell Ethereum on Cryptocurrency Exchanges

What is CFD Broker and how you can buy Ethereum with CFD Brokers?

A Contract for Difference (CFD) is a popular form of derivative trading, a financial contract that pays the difference between the open and closing price. It is cash-settled with no physical delivery of goods or securities. CFD trading enables you to speculate on the rising or falling prices of fast-moving global financial markets (or instruments) such as indices, shares, commodities, cryptocurrencies, and currencies.

CFD trade is an agreement between two parties – seller and buyer, to exchange the difference between opening price and the closing price of a contract. Which means that you do not buy the asset itself, but only trade (or bet) against falling or rising prices of the asset or can benefit from movements in the price without having to buy the physical product. This is a particularly interesting proposition as at times the underlying asset may be way too expensive to buy, as in most recent times when 1 bitcoin was going for $10,000. So imagine you think the price of the bitcoin will go up, with an Exchange you would need to have a substantial amount of funds to buy the asset to realise a profit, whereas with a CFD trading you could enter into a trade and make a way better return on your investment*.

CFD trading is suitable for speculating on short-term changes in the value of an asset. You can open and close a position in a matter of hours or even minutes, so you can make gains from even short-term market changes.

CFD Trading – Go Long or Short when you buy Ethereum

The objective of trading CFDs is to speculate on price movements (generally over the short term) in an underlying asset. Your return depends on movements in the price of the underlying asset and the size of your position. For example, if you believe the value of a cryptocurrency is going to increase, you would buy a CFD (also known as “going long”) with the intention to sell it at a higher value. The difference between the price at which you buy and the price at which you sell equates to your profit, minus the broker fees. If you think the value of a cryptocurrency is going to decrease, you would sell a CFD (or “going short”) at a specific value, expecting to buy it back at a lower price, resulting in the Broker paying you the difference minus any relevant costs. However, in either circumstance, if the cryptocurrency moves in the opposite direction and your position is closed, either by you or as a result of a margin call, you would owe the Broker the amount of any loss you have incurred. To open a position, you are required to deposit a minimum deposit into your account then you can choose to use leverage or a margin. Trading on margin can magnify any losses or gains you make.

Margins and Leverage

By investing directly in an asset such as a company share, or cryptocurrency, Ethereum in our case, allows you to enjoy the full benefit of any rise in the asset value. It’s the same with CFDs but you don’t have to make a large investment to access this potential benefit. Using CFD brokers and trading platforms you can make the same profit as a cryptocurrency/asset owner with much lower capital investment, compared with buying the actual asset or in our case – when you buy Ethereum.

This can be achieved by taking advantage of the margin, which CFD Broker offers to the trader. A Margin is a loan or credit extended by your broker, that allows you to leverage the funds in your account to enter larger trades. Leverage is expressed as a ratio, for example, 2:1 leverage means that you would be able to hold a position that is twice the value of your trading account.

Advantages of Trading with CFDs:
24-hour Forex and cryptocurrency trading
You can profit both when prices are rising or falling
Manage your risk easily
Trade using leverage
No Commissions and No hidden charges
Access to global markets
Disadvantages of Trading with CFDs:
Market volatility
Higher-Risk Product
The potential for big losses if traded irresponsibly

In the case of unfavourable market movements in the traditional trading, one would lose only the invested money, with CFDs one can lose more than their initial investment was, especially when using high leverage. For this reason, it is recommended not to exceed the amount of full trade together with the leverage above the figure which you can afford to lose and always have Stop Loss at the reasonable levels when you buy Ethereum CFDs.

There are two CFD Brokers we recommend if you are based in Europe and want to start investing in Ethereum, Bitcoin or other cryptos via CFDs. Both brokers are well-regarded in the industry and have millions of registered users. 

Buy/Sell Ethereum with AvaTrade

AvaTrade is one of the most popular CFD brokers that has been on the market since 2006 and is regulated across 6 jurisdictions. With AvaTrade retail investors can invest in stocks, bonds, commodities, forex, ETFs, indices and also trade cryptocurrencies 24/7, AvaTrade operates a state of the art trading platforms including Meta Trader 5, Meta Trader 4, AvaTrade Web Platform, AvaTrade for Mac,  AvaOptions and mobile trading app AvaTardeGO. 

AvaTrade has more than 200,000 registered users from more than 140 countries and offers an extensive library of educational resources for both novice and professional traders. The AvaTrade trading platforms are user friendly and easy to navigate but at the same time quite advanced with a full set of trading features and analytical tools. Investors can have access to Economic Calendar, Analytical Views and Market Buzz, Fundamental and Technical Analysis tools, as well as Forex Featured Ideas. 

With AvaTrade, investors can trade all major cryptocurrencies 24/7 including but not limited to Bitcoin, Ethereum, Bitcoin Cash, Ripple, Litecoin, Dash and many others. AvaTrade does not charge any commissions and offers ultra-low spreads for most liquid assets. Experienced traders can also take advantage of the leverage that depends on the asset class and market conditions. 

AvaTrade Review How to buy Bitcoin

Another great feature of the AvaTrade is it’s Free Demo Account where you can start investing with $100,000 virtual cash with no risk. Demo Accounts are a great way to familiarise yourself with the trading platform and its features before committing real money. You can also test your trading strategy or just familiarise yourself how AvaTrade trading platform works.  

How to Buy Ethereum with IQ Option

IQ Option is another popular CFD registered in Cyrpus and regulated by CySEC. With IQ Option you can trade more than 44 Forex pairs, 200+ popular stocks, 12 most popular cryptos including Bitcoin and Ethereum and also Commodities and ETFs. IQ Option has more than 1,800,000 active traders and offers professional and easy-to-use proprietary web-based and mobile trading platforms.  

IQ Option Review

Both experienced and novice investors will find IQ Option platform attractive, as it offers intuitive interface but at the same time full of professional trading features such as technical and fundamental analysis, economic calendar, popular market news feed and a vast library of educational resources and video tutorials. 

IQ Option Review - How to Start Trading

IQ Option offers different account types for Retail and Professional investors. And you can also take advantage of the Free Demo Account with $10,000 in virtual cash to get yourself familiar with the platform and test-drive your trading strategies. Demo Account is a great way to get your toes in the water risk-free and the IQ Option minimum deposit is only £$100. 

Buy/Sell Ethereum with Cryptocurrency Exchanges

If you are not into trading but more into “buy and hold” type of investment* opportunity then you can look into Exchanges, where buying Ethereum will be very straightforward. You register on the exchange you trust/like the most and start buying cryptocurrencies at the offered price. Of course with some of the most famous cryptocurrencies are super expensive you can buy Ethereum and other cryptos in smaller units.  Once you bought Ethereum at the offered price, the asset (no leverage or margins are offered) is 100% owned by you and can be transferred to your own wallet or wallet provided by the Exchange. Exchanges are usually valued by the trustworthiness, low commission fees, and the trading volume.

However, it worth mentioning, that despite traders putting tremendous trust into centralised exchanges, these are sadly notorious for losing or misplacing customer deposits. To name only a few examples: MtGox famously lost $460 million in 2014, BitStamp misplaced $5 million in 2015, BitFinex lost $72 million last year, and QuadrigaCX accidentally burnt $13 million of ether in 2017. If you wish to buy your Ethereum at an Exchange, which is now counting hundred of different ones, below are just a few:

Buying Ethereum and trading CFDs in the USA

Currently, US clients have no access to OTC (Over The Counter) derivatives, such as CFDs (Contracts For Differences). US citizens or residents are embargoed from trading CFD instruments. Most of the European CFD providers or Brokers cannot open or hold CFD accounts for American citizens as it stands now.  

ZuluTrade Brokers

Our understanding is that if you are an American citizen your only option at this moment for buying Ethereum, is via cryptocurrency exchange or a social trading platform such as ZuluTrade. ZuluTrade is the world largest social trading platform and it works with one broker that can accept US-based clients. When you go to ZuluTrade, you will be automatically offered the best available broker in your jurisdiction and ZuluTrade will be able to recommend the broker for US-based IPs. 

Below we answered some of the most common questions our readers ask when considering investing in ETH

Do I own Ethereum/ETH when I trade CFDs?

When investing via CFD you don’t own an underlying asset and only bet on the price move. If you want to invest in the cryptocurrency long-term and interested in buy and hold strategy, CFD broker is not the best option for that. But if you want to speculate and make a profit by trading Ethereum or Bitcoin short-term CFDs are the great option as you don’t expose yourself to security risk (i.e. risk of digital assets being stolen). So while you don’t actually own Ethereum/ETH when trading CFDs, you can fully benefit from the price moves when trading digital assets. 

Do CFD Brokers offer leverage on Ethereum/ETH?

AvaTrade does offer leverage for forex and cryptocurrency trading and at the moment of writing this article it is 20:1. The leverage means that you borrow money to trade and for every $1 invested, you can borrow $20. That means that for every $100 you put in one trade, your actual trading position could be as high as $2000. With leverage, you can increase your return on capital substantially but please remember that losses can be also higher than the original capital invested. We only recommend using high leverage for experienced traders with substantial capital to be able to absorb potential losses.  

Can I still Short Ethereum/ETH with a CFD Broker? And with an Exchange?

AvaTrade offers short-selling meaning investors can open short (SELL) positions on the platform and profit from the price decline. 

Is Ethereum/ETH a good long term investment

This is one of the most popular questions our readers are asking and there is a lot of debate going on in the cryptocurrency trading community. While many investors are still bullish about the long-term perspective of the Bitcoin and Ethereum, the prices are highly volatile and are currently trading far below from it’s peak prices back in 2017. Today, the price of Bitcoin is around $10,000 while at its peak it was almost $20,000 and it might take a while for it to get back. 

But the price volatility of Bitcoin, Ethereum and other cryptocurrencies presents a great opportunity for day-traders to make a profit. For example, many of our readers who trade with cryptocurrency trading robots such as the Bitcoin Revolution or Ethereum Code report at least 30-40% in monthly profits. Social Trading platforms such as ZuluTrade also offer great opportunities to follow performing trading strategies and invest alongside experienced traders.  

Is it better to trade with Bitcoin or Ethereum/ETH

Bitcoin and Ethereum are two of the most popular cryptocurrencies and largest by the market capitalisation. While their prices are correlated to some extent, quite often the price of ETH and BTC are driven by different factors and events/ So we would recommend considering the investment in both ETH and BTC for diversification. 

Can you buy less than 1 Ethereum/ETH

Yes, you can buy less than 1 Ethereum/ETH. With CFD brokers such as AvaTrade or IQ Option, you can start investing with as little as $10. 

How do i buy Ethereum/ETH stock

Ethereum/ETH is not a company and therefore it does not have a stick or share. You can buy the underlying asset via the exchange, or invest in Ethereum/ETH via Contract for Difference, or CFD. 

Is there an Ethereum/ETH ETF

For the last 3 years, there has been a number of attempts by traditional finance market players to launch cryptocurrency ETF but so far unsuccessful. SEC, the US financial regulator did not approve that yet but there is a number of interested parties who are lobbying this matter so it is very possible that in the near future we will see Bitcoin and Ethereum exchange-traded fund. 

How to buy Ethereum/ETH using credit card

You can’t just buy Ethereum/ETH with the credit card directly. But if you use CFD brokers like AvaTrade or IQ Option, for example, you can use a credit card to deposit the funds to the platform and invest in Ethereum that way. 

How to buy Ethereum/ETH with bitcoin

You can buy Ethereum with Bitcoin via the CFD broker. That is very similar to any traditional forex transaction, but in that case, the base and the quoted currencies would be cryptos. If you want to buy Ethereum with Bitcoin you can use one of our recommended broker platforms such as AvaTrade

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