Cryptocurrency is now well and truly on the radar of many Australian investors. But while Bitcoin is overwhelmingly the most popular digital asset currently available, Ethereum also has a lot going for it.
To start with, it is the world’s second-largest cryptocurrency by market capitalisation. It also powers thousands of decentralised applications, financial services, and blockchain projects, which means it offers a different proposition from many other options on the market.
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If you are interested in purchasing ETH, it’s worth understanding a few things about Ethereum. This includes how it works, what influences its value, and how Australians can access the market using Australian dollars. All of which we’ll outline in this post.
What Is Ethereum?
Officially launched in 2015, Ethereum is a blockchain network that allows developers to build and operate applications without relying on a central authority. The network’s native cryptocurrency is Ether (ETH), which is used to pay transaction fees and support activity across the blockchain.
While Bitcoin was primarily created as a digital form of money, Ethereum was developed with broader functionality in mind. Notably, this includes “smart contracts”, which are self-executing agreements that automatically carry out actions when certain conditions are met.
This technology has enabled Ethereum to be the foundation for many blockchain-based projects. Typically, they include everything from decentralised finance platforms and digital collectibles to gaming ecosystems and tokenised assets.
Thanks to its widespread use and rapid ongoing development, many investors view Ethereum as one of the most important cryptocurrencies in the market. Its ability to support applications is attracting sizeable numbers of developers, businesses, and investors from around the world.
Why Are More Australians Buying Ethereum?
In recent years, cryptocurrency has grown significantly across Australia. Primarily, this is because, as awareness of digital assets increases, many investors are looking beyond traditional investments to explore opportunities in the crypto sector. Due to its strong market position and broad range of applications, Ethereum is often among the first cryptocurrencies Australians research.
For those looking to enter the market, there is a lot to learn. But one of the first things is how to buy ETH on Independent Reserve or another reputable Australian crypto exchange that supports AUD deposits.
Overall, many investors are attracted to Ethereum because it provides exposure to both cryptocurrency markets and blockchain technology. It also offers various opportunities, as some long-term investors may purchase ETH and hold it for years. Others might take a more active approach to trading on short-term price movements.
What Factors Influence the Price of Ethereum?
Like with any financial asset, Ethereum’s value is influenced by a range of factors, the main one of which is supply and demand. As you would expect, when demand for ETH increases, prices often rise. But when selling pressure outweighs buying activity, then prices, of course, can fall.
That said, network developments can also have a significant impact on price. Ethereum is a cryptocurrency that regularly undergoes upgrades aimed at improving various aspects, including its performance, scalability, and security. When a positive development occurs, it often generates enthusiasm among investors, which can influence market sentiment.
In addition, cryptocurrency prices can also be influenced by broader economic events such as inflation data, interest rate announcements, and movements in global financial markets.
Interestingly, Ethereum is considered a risk asset by many investors. This means that shifts in market confidence can create periods of both strong growth and sharp volatility.
How Can You Buy ETH With AUD?
There was a time when buying Ethereum with Australian dollars could be quite problematic. However, today, it is much more straightforward.
Indeed, most Australian cryptocurrency exchanges allow you to do this in three stages. Namely:
- Create an account
- Complete identity verification
- Deposit AUD via bank transfer or PayID
Once the funds have been deposited, users can then purchase Ethereum through the ETH/AUD trading pair.
When selecting a cryptocurrency exchange in Australia, investors should evaluate several factors. Specifically, these include the platform’s:
- Security
- Customer support
- Trading fees
- Liquidity
- Ease of use
The best and most trusted exchanges make buying Ethereum very easy for first-time investors. They also allow investors to either keep their holdings on the exchange or transfer them to a personal wallet after purchasing ETH.
What Fees Should Australian Traders Expect When Buying ETH?
Fees are an important consideration for anyone planning to enter the cryptocurrency market. You should be aware that most exchanges charge trading fees whenever users buy or sell digital assets. Typically, these fees are calculated as a percentage of the transaction value. However, the exact amount varies between platforms.
In addition to trading fees, some exchanges may charge you for deposits or withdrawals, although this often depends on the payment method being used. Something else investors should also be aware of is blockchain network fees, which they might be hit with when transferring Ethereum between wallets.
These costs may seem relatively small on individual transactions. But they can add up over time, particularly for active traders. That’s why it’s a good idea to compare fees between platforms before committing to using one.
How Can You Store Ethereum Safely?
Once you have purchased Ethereum, security should become a major focus. Currently, cryptocurrency ownership is controlled by private keys, which are stored in a crypto wallet. These wallets can either be “hot”, which means they are connected to the internet, or “cold”, in other words, kept offline.
Generally speaking, hot wallets are preferred by active traders because they provide quick access to their funds. Cold wallets, by contrast, are commonly used by long-term investors, mainly because they give them an additional layer of security.
Regardless of what type of wallet is chosen, it is essential to use strong passwords. You should also enable two-factor authentication and keep backup copies of important recovery information.
What Risks Should You Understand Before Buying Ethereum?
All cryptocurrencies carry a degree of risk, and Ethereum is no different. While it has delivered strong growth over certain periods, you should be aware that it remains a volatile asset. This means that prices can move dramatically over a short timeframe. There is also no guarantee that past performance will continue. For this reason, anyone considering an Ethereum investment should be comfortable with the possibility of market fluctuations.
Additionally, there are security risks within the broader cryptocurrency industry which you should be aware of. These include numerous fraudulent schemes, fake investment opportunities, and phishing attacks targeting inexperienced users. That’s why you should take time to research platforms thoroughly and exercise caution when sharing personal information or transferring funds.
Here’s how you should stay vigilant against crypto scams.
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