While Ethereum might seem like just an additional cryptocurrency, it is a supercomputer operating on a global scale. Although it may sound like science fiction, it is true. Similar to Bitcoin, Ethereum’s network also runs on millions of computers across the world.
Currently, as an investor or a trader, you cannot buy Ethereum on E*Trade. Unfortunately, the E*Trade platform or E*Trade application does not offer any support for users to invest or start trading Ethereum or any other cryptocurrency as of now.
With an increase of 1187.3 percent since last year, Ethereum has gained a market capitalization of around $133.9 billion. Blockchain-based Ethereum allows developers to create decentralized apps and smart contracts.
This article explains how to buy Ethereum, what is future trading on E*Trade and the launching of the crypto trading services on E*Trade.
Crypto Futures Trading on E*Trade!
Currently, E*Trade doesn’t directly offer any cryptocurrency trading, but it offers futures trading through Chicago Mercantile Exchange (CME).
Buyers and sellers enter into a futures contract when they agree to purchase, and sell, respectively, a specific asset at a future date, and with Ether futures, that underlying asset is the Ethereum cryptocurrency.
You will need to open an account with a registered futures broker to trade ETH futures on the CME. You can find a list here. Following your setup, you can place an order via your broker and select the expiry month and number of contracts you want to buy or sell.
The value of a single futures contract is 50 ether, with one ether being equal to US dollars. For instance, the notional value of a contract for Ether futures will be $20,000 US dollars if the CME CF Ether Dollar Reference Rate is $400.
Additionally, ether futures are eligible for exchange for physical (EFP). In EFPs, two counterparties negotiate a private trade that allows one to trade a futures position in exchange for a spot market position and vice versa. The participants may trade physical ether positions for an equivalent position with CME Group Ether futures and vice versa.
However, there is a high barrier to entry for regular investors as a single contract costs the equivalent of 50 ether, which as of February 10, 2021, is $85,000.
You can find the transaction fees associated with ETH futures here.
E*Trade To Launch Crypto Trading Services
The likelihood of E*Trade being able to trade Ethereum and Bitcoin is high. E*Trade is now a market leader and making waves in the financial, banking, and commercial sectors, and it is believed by several investors that it will embrace cryptocurrency as well.
According to crypto experts, the digital coin will one day make its way into the E*Trade. Additionally, it is a great opportunity for investors who are risk-takers and wish to venture outside their familiar currencies.
As part of its plans to enter the cryptocurrency world, E*Trade Financial Corp. plans to offer customers the ability to trade popular crypto coins such as Ethereum on its platform. It would be one of the largest brokerages to offer cryptocurrency trading.
According to a Bloomberg report (see here), E*Trade Financial Corporation is all set to announce the cryptocurrency trading services on its platform.
On April 29, 2019, the report confirmed that E*Trade will initially support ether (ETH) and bitcoin (BTC) trading, with additional cryptocurrencies coming later.
With crypto prices drastically below their 2017 highs, E* Trade’s entrance into the digital currency space comes at a time when the once-hot market is in turmoil.
How To Buy Ethereum?
Ethereum, and specifically Ether, can only be purchased through exchanges or from a digital wallet directly. Ethereum cannot be bought through your online discount broker. It has to be converted into your wallet.
Here are the options from which you can buy Ethereum:
- Centralized exchanges: Investors in digital currencies rely on centralized cryptocurrency exchanges to conduct their transactions. These online platforms allow you to buy and sell cryptocurrency. The most popular way for investors to purchase and sell cryptocurrencies is with these exchanges. Centralized Exchanges allow you to buy crypto using traditional currencies. Your ETH is held in their custody until it is transferred to a wallet you control.
- Decentralized exchanges: DEXs, also known as decentralized exchanges, allow traders to place orders and trade cryptocurrencies without the need for an intermediary institution and without the need to use an exchange for clearing, and offer a new type of pair-matching. Consider peer-to-peer ETH if you want more control. While using a decentralized exchange, you can trade without giving control of your funds to a third party or a typical centralized company.
- Digital Wallets: Much like how we keep our cash and credit cards in a physical wallet, bitcoins can also be accessed through a digital wallet. It is possible to have a hardware-based or web-based digital wallet. You can also keep the wallet on your mobile device, computer desktop, or by printing out the private keys and addresses needed for access on paper. ETH can sometimes be bought through a digital wallet which allows you to buy crypto with a debit/credit card, bank transfer, or even Apple Pay. However, there are some geographical limitations.Keeping ETH in a wallet, you control instead of exchange may be a good idea if you plan on buying a lot of ETH. The reason is that an exchange is a common target for hackers. Hackers could steal your funds if they gain access. Alternatively, you are the only one who controls your wallet.
Risky as it may be, investing in Ethereum could potentially be rewarding. Ethereum is used mostly as a building block by companies, unlike Bitcoin or Litecoin. This could be a win for an investor.
In seeking to gain credibility with institutional investors, E*Trade’s entry into the volatile cryptocurrency space would be a major milestone for the expanding industry. Cryptocurrency trading in a major brokerage would provide a substantial amount of legitimacy to digital assets, making them more attractive to investors.
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