The Ultimate Beginner’s Guide to Investing in Ethereum Classic
The world of cryptocurrencies is now super-extensive. And, with so many options on the table, it can be a challenge to choose the right digital asset for your portfolio.
If you want to get into the crypto trading scene, Ethereum Classic is a digital currency that many are considering as an investment prospect.
There's a reason why - over the years, Ethereum Classic has generated sizable returns.
In this guide, we show you how to invest in Ethereum Classic from the comfort of your home. We also discuss some of the risks you need to consider before investing in Ethereum Classic, alongside some useful tips and strategies.
How to Invest in Ethereum Classic in 5 Easy Steps:
To invest in Ethereum Classic, the first step is to Open an accout with a regulated exchange, depost funds, select ETC from the platform list, and lastly check & confirm that ETC coins have added to your Wallet.
If you are in a hurry, the following 5-steps will show you how to invest in Ethereum Classic in less than 5 minutes!
Step 1: Register with a reliable and regulated crypto-broker
Step 2: Fund your account with a minimum deposit
Step 3: Choose Ethereum Classic (ETC) from the list of available crypto-assets.
Step 4: Specify how much you want to invest in Ethereum Classic.
Step 5: Once you have confirmed your investment, the ETC coins will be added to your wallet!
What is Ethereum Classic?
Ethereum Classic (ETC) is the official native cryptocurrency of the original Ethereum blockchain. In other words, it is a decentralized blockchain platform that allows developers to build and use dApps that work in an autonomous manner.
It runs on an unmodified version of the original Ethereum blockchain. Its philosophy is to put code above everything else, and if there are exploits or compromises, they should not be removed by hard forks that destroy the project's integrity.
As such, the team behind ETC believes in absolute immutability, not accepting human interference of any kind.
Similar to Bitcoin, there is no individual or organization that owns or controls the Ethereum Classic network. On the contrary, it's an open-source project secured by the Ethereum Classic community.
The design of this cryptocurrency project allows it to be flexible - to make way for creating new applications.
How Does the Invest in Ethereum Classic Process Work?
In the cryptocurrency market, individuals have two options when learning how to invest in Ethereum Classic.
First, you can buy real cryptocurrencies from a regulated broker like eToro and take ownership of the coins. This is a long-term investment strategy, as you will likely wait for the price of the digital currency to rise significantly before you cash out.
Alternatively, you might also consider using Ethereum Classic Contracts for Differences (CFDs).
A CFD is a financial instrument offered by regulated trading sites. This means you won't own the Ethereum Classic coins. Instead, CFDs permit you to speculate on the future value of the asset - often with leverage.
Either way, the overarching objective when investing in Ethereum Classic is to see the value of your coins increase over time.
In other words, you'll be looking to sell your coins for a higher price than you initially paid. In doing so, you'll make a profit - much in the same way as you would by investing in a stock.
Let us help you clear the mist with an example of how an investment in Ethereum Classic works in practice:
- You open a trading account with an online broker that sells Ethereum Classic.
- You deposit trading funds of $1,000 and decide to invest the full amount into the Ethereum Classic coins.
- At the time of the purchase, the price of ETC coins stands at $10.
- You choose to hold on to the Ethereum Classic investment for two years.
- When ETC is worth $50, you decide to cash out.
- This shows a price increase of 400%.
As you can see, this is a significant profit that you made in just two years. On your $1,000 stake, you made a profit of $4,000!
While investing in Ethereum Classic, it is best to use a regulated online broker who can guarantee the safety of your funds.
We will get into the details of how this works later in the article.
Why Should you Invest in Ethereum Classic?
With thousands of cryptocurrencies to choose from, you need to assess whether or not Ethereum Classic is a good investment. After all, you will be risking your own money - so doing your homework is crucial.
To help you along the way, below, you will find some key metrics to help you evaluate Ethereum Classic's viability as a long-term investment.
1. Adoption of Ethereum Classic
The cryptocurrency industry is still relatively young, and it has enormous growth potential in the future. Ethereum Classic is often the currency of choice used by ICOs - meaning it serves as a launchpad for developers to build new tokens.
Although Ethereum Classic has been overshadowed by Ethereum in the past, there is still a chance that the coin will get more exposure with the development of the crypto-sector.
ETC is also one of the top 10 cryptocurrencies used for daily transactions. Given these factors, it is possible that this popular digital currency could witness an increase in price over the coming years.
2. Blockchain Developments
The Ethereum Classic network, being the original Ethereum blockchain, also plans for notable improvements in the future. Though there are other blockchains competing with this project, the right set of developments could be good news for the price of ETC.
For instance, the Ethereum network plans to switch to a Proof-of-Stake (PoS) system from its original Proof-of-Work (PoW) mechanism.
To explain in simple terms - these systems are used to verify transactions on the blockchain.
However, PoW is relatively more expensive and requires more computing power. If the Ethereum Classic network also shifts to PoS, this will make it more cost-efficient and decentralized.
As such, the network will become more efficient and thus - this could increase user demand.
3. High Volatility
The cryptocurrency market is known for its volatility, and Ethereum Classic is no different. In fact, historically, this digital asset has regularly experienced double-digit fluctuations in a single day.
Therefore, short-term traders can capitalize on such fast market movements of the cryptocurrency.
As we have mentioned earlier, if you are trading Ethereum Classic CFDs - you can benefit from both the rising and falling prices of the digital asset.
- If you think the price of ETC coins will rise soon, you will place a buy order first. When the price rises - you will place a sell order to cash out your gains.
This is called going long on Ethereum Classic.
- If you think the price of ETC coins is going to drop, you will place a sell order first. When the price falls, you will place a buy order to cash out your gains.
This is called going short on Ethereum Classic.
This way, you do not have to concern yourself with the long-term market outlook. But rather, you can profit from short-term market volatility.
In short-term trading, you will be placing numerous trades regularly to make modest profits.
Note that there are a number of factors that contribute to the short-term volatility of ETC coins - including global finances, the economy, cryptocurrency regulations, market competitors, and more.
Would You Consider Investing In Ethereum Classic?
How to Invest in Ethereum Classic Coin - Various Options Available
There are two main options for you to start investing in Ethereum Classic - through cryptocurrency exchanges or online brokers.
Here is an overview of how the process works on both these platforms.
As Ethereum Classic is one of the most popular cryptocurrencies globally, you will find that most cryptocurrency exchanges support it. As such, you can trade ETC against another cryptocurrency.
With that said, most cryptocurrency exchanges do not allow trading through fiat currencies. This means - you cannot deposit funds with a bank card or e-wallet. Instead, you will have to fund your account with another cryptocurrency.
If this is the route you choose, here is how it works:
- You open a trading account at a cryptocurrency exchange that supports ETC.
- Deposit funds with a cryptocurrency like Bitcoin.
- You can then exchange Bitcoin for Ethereum Classic.
- The trade will include a small commission - typically within the range of 0.1% to 0.6%.
- Once the purchase is completed, you withdraw the ETC coins to your private cryptocurrency wallet.
As is evident, you will first have to procure a cryptocurrency before you can start trading on these exchange platforms. This makes the whole process a bit inconvenient. In addition, you also need a private digital wallet to store the digital currency.
In other words, you will be completely responsible for the safety of your Ethereum Classic assets.
This is only one part of the trade. When you want to cash out your ETC coins, you will have to repeat the whole process but in reverse.
Considering the effort, we recommend taking the second route and investing in Ethereum Classic through an online broker.
Ethereum Classic Broker
By now, it should be evident why an online broker is a better choice for your investment plans. It is not only efficient but also a cost-effective alternative to cryptocurrency exchanges.
Before we go ahead, we should mention that it is best advised to trade only through regulated online brokers. This will allow you to trade in a safer and secure environment, in addition to investor protections and KYC verifications.
Furthermore, if your broker is licensed, you can easily fund your trading account with a fiat currency method - such as a debit card.
For instance, reputable online broker eToro holds licenses from CySEC, the FCA, and ASIC. For US citizens, the platform is registered with FINRA.
On eToro, you can process transactions using an assortment of payment methods - including bank cards, e-wallets, and bank transfers. Moreover, there is no deposit fee for funding in USD. You only have to pay 0.5% for non-USD deposits, which is much cheaper than the 3.99% charged by Coinbase when using a debit card.
Most importantly, there is absolutely no trading commission to invest in Ethereum Classic. Once you purchase the coins, you can store them for free on the eToro wallet.
How to Choose a Platform to Invest in Ethereum Classic
If you're an investor interested in Ethereum Classic, the first question that probably comes to mind is - where do you start?
The first step is to find a cryptocurrency broker that is reputable and suits your trading goals. To simplify the process, below you will find a list of parameters that you should consider while choosing your online cryptocurrency broker.
1. Licensing and Reputation
It is crucial that your online broker is licensed under a well-known regulatory body. Namely, this should include the likes of the FCA, ASIC, CySEC, or FINRA. This will ensure that the broker follows strict guidelines implemented by these governing organizations.
For instance, a licensed broker must:
- Get their books audited regularly
- Collection and verification of all new account holders as per KYC norms
- Keep your funds in separate bank accounts
- Be transparent and display the risks of investing in cryptocurrencies.
On the other hand, if you choose an unregulated broker, you will be inviting unnecessary risk.
2. Fees to Invest in Ethereum Classic
As with most financial activities, you will be required to pay some sort of commission when investing in Ethereum Classic. In most cases, brokers charge this as a percentage - calculated against the size of your stake.
- For instance, say your chosen online broker charges you a commission of 1.2% per trade. This means - on your stake of $1,000 on ETC coins, you will pay a $12 commission.
- If you sell your Ethereum Classic investment when it is valued at $2,000 - your commission will come to $24.
This commission will vary widely from one broker to another. As we covered earlier, eToro allows you to trade Ethereum Classic at a zero commission rate - thus helping you save on trading fees.
Additionally, apart from the trading commission, you should also look into other fees - such as transaction costs. For instance, your broker might charge you a fee on deposits or withdrawals. At eToro, you only have to pay a 0.5% deposit fee - and this is only applicable to payment methods that are not backed by USD.
3. Minimum Ethereum Classic Investment and Payments
Many brokers require you to have a minimum deposit in place to start trading Ethereum Classic. This amount will often be higher when depositing using credit/debit cards compared to wire transfers.
That said, wire transfers can take up to 7 business days to process the transaction. If you want your payments to be processed instantly, it is worth choosing credit/debit cards or e-wallets such as PayPal.
You also need to consider what the minimum stake required is to invest in Ethereum Classic.
Similar to fees, these conditions will also differ from one broker to another. To give you an idea, at eToro, you can start trading ETC coins from as little as $25.
4. Storage and Cashing Out
As previously mentioned, with long-term investment plans, you need to withdraw your digital asset and move them into a private wallet. However, if your broker gives you access to a wallet, you do not have to worry about storing your coins elsewhere.
Unfortunately, even the most popular cryptocurrency exchanges that offer wallets do not hold any regulatory licenses, including Binance.
Therefore, it is always safer to store your coins with a regulated broker. eToro comes with its own cryptocurrency wallet and allows you to safeguard your digital assets at no extra cost.
Ready to Invest in Ethereum Classic?
How to Invest in Ethereum Classic Today - Step-by-Step Walkthrough
Are you ready to plunge into the world of Ethereum Classic? If so, all you need to set up your trading account is 5 minutes of your time!
As you have already noticed, we have used eToro as a reference throughout this guide on how to invest in Ethereum Classic. That is because eToro is one of the best beginner-friendly online brokers available for cryptocurrency investing.
As such, in the sections below, we show you how to invest in Ethereum Classic at eToro - commission-free.
Step 1: Open an eToro Account
Go to the eToro website, and click on 'Join Now'. You will be asked to provide an email address and personal information - including your full name, home address, date of birth, and phone number.
Step 2: Upload Some ID
As a regulated broker, eToro will also request a valid photo ID to verify your identity. You can provide your passport or driver’s license. Once verified, your account will be confirmed and approved.
Note: You can start investing in Ethereum Classic on eToro without completing this step. However, you will have to come back to it if you wish to make a deposit of more than $2,250 or withdraw your funds.
Step 3: Make a Deposit
The minimum deposit is set at $200 on eToro. You can add funds using one of the following payment methods:
- Debit card
- Credit card
- Bank Wire
All of the payment options listed above will be processed instantly - with the exception of a bank transfer.
Step 4: Search for Ethereum Classic
eToro gives you access to 16 different cryptocurrencies and nearly 100 different crypto-trading pairs. You can find your Ethereum Classic trading instrument by simply searching for 'ETC'.
You can choose your preferred market and click on the 'Trade' button to proceed.
Step 5: Complete Ethereum Classic Investment
Now you can go ahead and enter the amount of money you want to invest in Ethereum Classic - ensuring you meet a $25 minimum.
When you are ready, click on the 'Open Trade' button to complete your Ethereum Classic investment!
Step 6: Cash Out Your Ethereum Investment
At eToro, cryptocurrency trading is possible around the clock. When you think it's the best time to cash out your ETC investment, simply head over to your portfolio. There, you can find the 'Sell' button next to your Ethereum Classic investment.
You will find the cash instantly updated to your eToro account, and you can make a withdrawal when needed.
How to Invest in Ethereum Classic - The Bottom Line
Ethereum Classic might have had a slow growth process, but it still expected to play a significant role in the future of decentralized finance platforms.
Following the split of the Ethereum community in 2016, Ethereum Classic has managed to gain traction on its own. Today, it stands as one of the largest cryptocurrencies globally.
At its core, ETC functions the same way as any other financial asset - with its value dictated by the supply and demand of the market.
Whether you choose to invest in ETC for the long-term or short-term depends entirely on your trading goals. All in all, it is best to do your homework before you think about how to invest in Ethereum Classic - especially when it comes to choosing a suitable broker.
At eToro, you have the opportunity to invest in Ethereum Classic at a minimum stake of just $25 - and you won’t pay any commission!
eToro – Best Broker to Buy Ethereum Classic ETC
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
What is the minimum amount required to invest in Ethereum Classic?
It is best to limit your investment to an amount that you can afford to lose. If you are a beginner, consider starting with a small stake. At eToro, you can start investing in Ethereum Classic with a minimum of $25.
Is Ethereum Classic a good investment choice in 2021?
Ethereum Classic had an unfavourable start to the year in 2020, hitting lows of $4.81 in March. However, in early January 2021, the price of ETC stands at $8.77. That said, the future value of the asset depends on the role ETC plays in the wider blockchain development.
How to start investing in Ethereum Classic?
At eToro, you can start investing in ETC coins in under 5 minutes. All you need to do is to open your account, deposit funds, and you are ready to start investing in Ethereum Classic.
Can I invest $100 in Ethereum Classic?
The minimum investment amount required to invest in Ethereum Classic is just $25 at eToro. You can choose any amount beyond that based on your trading budget.
Can I lose money on Ethereum Classic?
Yes, if you speculate incorrectly and the price of ETC falls, you will end up losing money. This is no different from investing in other assets like stocks or mutual funds.