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How to Buy Ethereum (ETH)

There are a few ways to buy Ethereum, the second-largest cryptocurrency in the world.

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Chris Davis

Managing Editor

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12 years of experience

Expertise

• Brokerage accounts
• stock market
• cryptocurrency

Chris Davis is a Managing Editor on the Investing team. He has passed the Series 65 (Uniform Investment Adviser Law Exam) and covered the stock market, investing strategies, investment accounts and cryptocurrency. His work has appeared in The Associated Press, The Washington Post, MSN, Yahoo Finance, MarketWatch, Newsday and TheStreet.

Published in

Managing Editor

Chris Davis is a Managing Editor on the Investing team. He has passed the Series 65 (Uniform Investment Adviser Law Exam) and covered the stock market, investing strategies, investment accounts and cryptocurrency. His work has appeared in The Associated Press, The Washington Post, MSN, Yahoo Finance, MarketWatch, Newsday and TheStreet.

Arielle O'Shea

Head of Content, Investing & Taxes

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19 years of experience

Expertise

• Retirement planning
• investment management
• investment accounts

Arielle O’Shea leads the investing and taxes team at NerdWallet. She has covered personal finance and investing for nearly 20 years, and was a senior writer and spokesperson at NerdWallet before becoming an editor. Previously, she was a researcher and reporter for leading personal finance journalist and author Jean Chatzky, a role that included developing financial education programs, interviewing subject matter experts and helping to produce television and radio segments. Arielle has appeared on the "Today" show, NBC News and ABC's "World News Tonight," and has been quoted in national publications including The New York Times, MarketWatch and Bloomberg News. She is based in Charlottesville, Virginia.

Published in

Head of Content, Investing & Taxes

Arielle O’Shea leads the investing and taxes team at NerdWallet. She has covered personal finance and investing for nearly 20 years, and was a senior writer and spokesperson at NerdWallet before becoming an editor. Previously, she was a researcher and reporter for leading personal finance journalist and author Jean Chatzky, a role that included developing financial education programs, interviewing subject matter experts and helping to produce television and radio segments. Arielle has appeared on the "Today" show, NBC News and ABC's "World News Tonight," and has been quoted in national publications including The New York Times, MarketWatch and Bloomberg News. She is based in Charlottesville, Virginia.

Andy Rosen

Lead Writer/Spokesperson

---

Expertise

• Cryptocurrency
• investing
• alternative assets
• taxes

Andy Rosen is a former NerdWallet writer who covered taxes, cryptocurrency investing and alternative assets. He has more than 15 years of experience as a reporter and editor covering business, government, law enforcement and the intersection between money and ideas. In these roles, Andy has seen cryptocurrency develop from an experimental dark-web technology into an accepted part of the global financial system. He is based in Boston.

Published in

Lead Writer/Spokesperson

Andy Rosen is a former NerdWallet writer who covered taxes, cryptocurrency investing and alternative assets. He has more than 15 years of experience as a reporter and editor covering business, government, law enforcement and the intersection between money and ideas. In these roles, Andy has seen cryptocurrency develop from an experimental dark-web technology into an accepted part of the global financial system. He is based in Boston.

Ether, or ETH, is the currency of the Ethereum blockchain. It is the second largest crypto, after Bitcoin, in terms of global market capitalization. It also underwent a significant update in 2022, called the merge, in which the system shifted from using proof-of-work to proof-of-stake. Among other changes, it allows users to stake their Ether, which then earns interest-like income.

Ethereum is one of the most widely-circulated cryptocurrencies, and you’ll have many options when choosing where to buy it. However, exchange fees, payment methods accepted and the option to store your crypto where you want can vary from exchange to exchange, so don’t just jump at the first place you see it.

Webull

Uphold

Coinbase

5.0

4.7

4.5

Fees 

$0

per trade

Fees 

2%-5.5%

Fees 

0% - 5%

varies by type of transaction; other fees may apply

Account minimum 

$0

Account minimum 

$1

Account minimum 

$0

Promotion 

Up to 4% match (up to $2M)

when you open and fund an account with Webull

Promotion 

None

no promotion available at this time

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no promotion available at this time

1. Choose a cryptocurrency exchange

Centralized crypto exchanges: Easy to use

Centralized exchanges such as Gemini or Coinbase act as middlemen in the buying and selling of cryptocurrencies. The best exchanges have fees below 2% and allow you to move your crypto to your own crypto wallet.

Pros

The ease and simplicity of centralized exchanges make them popular places to buy cryptocurrency.

They can be a good choice if you're somewhat new to cryptocurrency or are looking for a user-friendly experience.

Cons

Some exchanges have limited ability to interact with wallets.

Fees can be costly.

Decentralized exchanges: Maximum control

In a sense, a decentralized exchange, or DEX is the truest way to trade cryptocurrencies in that there is no third party whatsoever.

Pros

With DEXs, you retain full control over your funds and trade directly with a buyer or seller unlike centralized exchanges, which act as middlemen.

Decentralized exchanges can be cheaper than centralized exchanges.

Cons

DEXs are more technical than centralized exchanges, making them more difficult to set up and confusing to use.

If you don’t already own crypto, it’ll be tough to use a DEX. Most don’t allow you to buy or sell crypto for cash.

Online brokers: Investment diversification

Certain online brokerage accounts offer investors access to cryptocurrency alongside traditional investment assets such as stocks.

Pros

Online brokers with crypto offerings allow you to build a diversified investment portfolio that includes non-crypto assets such as stocks, bonds and mutual funds, which may fare better than crypto during a crypto downturn.

Online brokers are often even more beginner-friendly than centralized crypto exchanges, as they cater to a wider audience of investors than just crypto enthusiasts.

Cons

Many online brokers only allow users to buy and sell Ethereum for fiat currency on their platform. You may not be able to send your Ethereum to another person, store it in an external wallet, stake it, or trade it for another cryptocurrency, depending on the broker.

Like centralized cryptocurrency exchanges, many online brokers charge substantial fees for trading Ethereum.

2. Decide how to pay

Fiat currency

You can buy cryptocurrency with traditional fiat currency such as U.S. dollars. On some exchanges and brokerages, this is your only option. If you don't already own cryptocurrency, you're going to have to use cash at some point. If you're using a centralized exchange, you can fund your account using a bank transfer, a credit card or a debit card. A few payment methods, like credit cards, incur fees on some platforms.

Cryptocurrency

Some exchanges allow crypto-to-crypto trading. This can be a helpful strategy if you own another cryptocurrency, such as Bitcoin, that has increased in value and you want to diversify your holdings. Keep in mind: If you trade one crypto for another, you’ll owe taxes if the crypto you traded is worth more than what you bought it for, even if you never exchange it for dollars. Also, check to be sure the exchange you use lets you trade the crypto pair you have in mind, not just ETH.

3. Choose where to store your Ethereum

You’ll need a way to securely store the private keys that allow you to sell, spend or otherwise use your digital currencies. The storage options an exchange offers — or doesn’t — can be a deciding factor when choosing where to buy Ethereum .

On-platform storage: Easy, but you’ll give up control

Some brokers or exchanges let you store your crypto on their system. Technically, that means they’ll have sole custody of your crypto’s private keys.

Pros

It’s easy. There’s typically nothing to do after you open your account.

You don’t have to worry about losing the private key to your wallet or forgetting a password — a real problem that has cost people millions of dollars. If you forget your exchange password, you can regain access much like resetting a password anywhere else.

Cons

You likely won’t get the full benefits of cryptocurrency, such as using the decentralized applications listed below, nor will you have complete control over your wallet and the crypto it holds.

Central exchanges can crash — and have done so before, multiple times. For example, FTX, a major exchange, abruptly filed for bankruptcy, leaving billions in customer funds in limbo.

Non-custodial wallets: Requires setup, but you’re in control

This option requires you to set up a wallet and transfer the crypto you bought elsewhere onto it. There are many wallets to choose from, and they fall into two groups. “Hot” wallets store your crypto online and give you access through an app or a browser extension. “Cold” wallets are physical objects, often resembling a thumb drive.

Pros

If you use a wallet, you are the sole owner of your personal keys.

Historically, exchanges have been big targets for hackers, and storing your crypto on a third-party wallet can reduce your risk exposure.

Cons

Losing or forgetting your password can be devastating. Wallets have some redundancy measures, like seed/recovery phrases, but you’ll need to be proactive about putting those in place before you need them.

Wallets don’t require a high level of technical expertise to set up, but it does add another layer of complexity if you’re setting one up for the first time, and there can be a cost, too.

Think about this before you buy

Choosing the right way to buy and hold ETH comes down to experience, comfort, what you want to accomplish with your ETH and how much you plan to buy or hold.

For beginners, it may be best to start with a single centralized crypto exchange or brokerage account. It’s entirely possible that you’ll end up trading on multiple platforms and storing your crypto in multiple places. You could work your way up to the more advanced, decentralized platforms later.

Your decisions may also be informed by whether you view Ethereum as a long-term investment, a short-term buy, or a speculative bet on a volatile asset.

» Interested in other cryptocurrencies? Learn how to invest in Bitcoin.

Earn 3.71% APY by investing in U.S. Treasury Bills*

Disclosure: The author Chris Davis owned ETH at the time of publication.

Helpful resources