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.

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Cryptocurrencies

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Credit Card

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Gemini

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XRP, 10+ More

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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:

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).

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.

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:

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.

You can sign up for Coinbase or learn more in our complete Coinbase Review and User Guide.

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.

You can learn more by reading our Gemini review or you can sign up to Gemini here.

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 its platform and ended its 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.

You can learn more in our CEX.IO review or sign up there now.

For the vast majority of you reading this, one of the above three exchanges is most likely your best option for buying Ethereum.

With that said, we realize everyone has different needs, so here’s more of our recommended options.

As previously mentioned, Bittrex only offers to trade of cryptocurrencies for other cryptocurrencies. They do not currently have options for users to deposit fiat currencies. If this is your first time buying any cryptocurrency, then Bittrex is not for you.

With that said, Bittrex has established itself as one of the premier exchanges for serious traders. The site offers over 250+ trading pairs, denominated in Bitcoin, Ethereum, and Tether markets.  If you already own Bitcoin, Bittrex can be used to trade your Bitcoin for Ethereum, or many lesser-known altcoins. This exchange is also a favorite among frequent traders and cryptocurrency speculators.

Bittrex is located in the United States and was founded in 2014. They offer solid customer support and very low fees.

Coinmama is another option for those of you looking to buy large amounts of ether with credit cards. The Slovakian exchange allows users to purchase both Bitcoin and Ethereum.

Unlike Coinbase and CEX.IO, Coinmama does not offer a wallet service, meaning you will have to provide an Ethereum address from a separate wallet where your Ether can be sent. For this reason, we view it as a less beginner-friendly option than these competitors.

Like CEX.IO, which also offers high credit card purchase limits, Coinmama has rather high fees. You can compare credit card fees between exchanges in the credit card section below.

GDAX is owned by the same company like Coinbase. Where Coinbase is the beginner-friendly offering, GDAX is an exchange for more serious traders.

The site allows users to place market, limit, and stop orders for the following trading pairs:

BTC/USD, BTC/EUR, BTC/GBP, ETH/USD, ETH/EUR, ETH/BTC, LTC/USD, LTC/BTC, LTC/EUR

You can fund your account through bank transfers and wires, or through your Coinbase account. To learn more about the differences between GDAX and Coinbase, read our GDAX vs Coinbase comparison.

Kraken is another exchange option for those looking to trade fiat currencies for Ethereum or other cryptocurrencies. Like Gemini and Coinbase, they allow users to make fiat deposits through bank transfers and wires. The site also offers far more altcoins to trade than these two competitors. Still, we suggest choosing between Kraken and Poloniex as these are the best options.

While Kraken does not offer as many cryptocurrencies to trade as Bittrex, they do offer to trade for the following cryptocurrencies:

Ethereum, Bitcoin, Litecoin, Ripple, Monero, Zcash, Dash, Ethereum Classic, Gnosis, Iconomi, Melon, EOS, Augur, Tether, Dogecoin, Stellar, Bitcoin Cash

Established in 2011, the company has built a solid reputation in the cryptocurrency community over the years. They do however seem to have more complaints about slow customer support than most of their competitors. Another common complaint is their poor user interface.

Many cryptocurrency newcomers hope to use a credit card to make their first purchase.  Unfortunately, very few exchanges accept credit cards.  For the ones that do, credit cards open the door for fraudulent purchases, chargebacks, and high fees.

There are, however, a few good cryptocurrency exchanges accepting credit cards.  You can compare them in the table below and learn more about each site by clicking their respective review.

*CEX.IO fee estimates are for “Buy/Sell” FOK orders.  Fees are lower when trading on their exchange.

Unfortunately, we do not have enough time to answer every individual question readers have when it comes time to make their first Ether purchase. However, we have answered many of the most common questions asked by Ethereum newcomers below.

Ether is the currency of the Ethereum network. While technically the currency is not called Ethereum, the term is often used interchangeably to describe both the network and the currency. For this reason and to not confuse any readers, we too use the term “Ethereum” interchangeably.

For a better understanding, you may want to read our Beginners’ Guide to Ethereum.

No! Ether is divisible to 18 decimal places. While no exchange will allow you to purchase .000000000000000001 Ether (worth a fraction of a US cent), most will allow you to deposit as little as $10.

When rating and reviewing exchanges, our goal is to answer the most common questions cryptocurrency traders have about exchanges. This leads us to primarily focus on the following factors:

It’s important that our readers understand the final rating number is a combination of all 6 of these factors. While Bittrex may be higher rated than GDAX, that does not mean it’s the better exchange for YOU. Bittrex’s rating is increased by their abundance of available cryptocurrencies to trade, but they rate lower than GDAX in deposit and withdrawal methods as they do not offer fiat payment methods. The point is, to get the most out of our reviews, you should actually read them so that you can make an informed decision.

Our reviews are written by a handful of reviewers. While our reviewers do their best to research and speak to facts, it would be impossible to say that opinion does not play at least some part into our reviews (and most online reviews in general).

It’s typically not recommended that you store large amounts of any cryptocurrency on an exchange long-term. There are two main reasons for this.

You can learn more in our Ethereum Wallet Guide.

Whether or not you should invest in Ethereum is ultimately a question you have to answer for yourself. As with any investment, you should do your own research and invest an amount you could afford to lose.

With that said, if Ethereum ever reaches its full potential it would FAR exceed today’s prices. As a whole, cryptocurrency is still in a very early stage of its development.

While all of the above exchanges can be used to buy various other cryptocurrencies, we’ve created specific guides for the following coins:

The post How to Buy Ethereum and Best Exchange Ratings appeared first on CoinCentral.

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