While it’s true Bitcoin’s total value in circulation is second to none, Ethereum (ETH) is not that far behind. Not only is it far quicker than Bitcoin in terms of transaction speed, but it’s also a profitable investment. For instance, if you’d invested only $1,000 in ETH back in 2015, it’d be worth over $2 million today.
One of the advantages Ethereum has over other cryptocurrencies is that there are entire sectors (DeFi, NFTs, and other layer 2 solutions) built on it. That unique quality makes it a *very* useful protocol. It also is why there is a two-tier system making cryptocurrencies like XRP, Cardano, and Dash different from Bitcoin and Ethereum
In fact, Ethereum is the most traded crypto after Bitcoin and is widely accepted as a medium of exchange across exchanges and ICOs. Therefore, it’s no surprise many are wondering how to buy and sell ETH to obtain the best value for their money. If you’re one of them, keep on reading this article!
1. Choose a Trading Platform
Before you can start buying or selling any crypto, you need to consider several factors to determine what platform can best satisfy your requirements. Specifically, you can either choose a regular crypto exchange or an OTC desk. Let’s take a look at those factors one by one:
Even though it appears cryptocurrencies have been around for a long time, the market is still in its early stages. Consequently, the amount of liquidity on regular exchanges isn’t large enough for people to buy or sell high volumes of a coin without significantly shifting the price of that coin in an unfavorable direction.
As regular exchanges break down large orders into a series of smaller ones, and the price of each order goes slightly higher. However, that problem doesn’t exist with OTC desks because traders can buy and sell crypto at significantly higher volumes than regular exchanges.
Regular exchanges impose limits on the number of daily trades or the total deposit/withdrawal amount, crucial in determining the performance of a trader. As a trader, you need to have a great degree of freedom to turn profits, especially if you operate on a large scale.
Considering the low liquidity issue, exchanges have taken such actions to maintain the balance and indirectly discourage traders from shifting the market.
You may be an active trader or just someone waiting to sell at the best possible price. To do that, you need speed, which is severely lacking among regular crypto exchanges. For instance, if you want to sell Ethereum for Bitcoin, you need to continuously monitor the exchange rates and strike at the best possible time before the opportunity slips away.
Some exchanges may take several days to complete a single trade based on their liquidity, nowhere near good enough in this highly volatile market.
The multitude of security problems with crypto exchanges has driven so many people towards looking for other options. There’s been case after case of exchanges acting as scams or falling victim to cyber-attacks. That’s a scary situation for traders who need to provide a substantial amount of sensitive financial and personal data before being able to utilize these exchanges.
OTC desks have eliminated that concern because users aren’t required to share their personal information on the platform. They can contact the other party directly by phone, email, online messengers, or any method they choose. In a nutshell, OTC desks are a much safer, quicker, and cheaper option to proceed with.
2. Create an Account & Make a Deposit
Once you decide on a trading platform, you need to open an account to safely make trades. Here, you will fill out the onboarding form and go through the Know Your Client (KYC) process to verify your account. Depending on your place of residence, you may be required to participate in the anti-money laundering (AML) procedure as well.
Once you’ve finished the onboarding process and verified your account, you need to make a deposit to ensure there’s enough to trade.
To Sell Ethereum: You need to transfer your desired amount from your wallet into your account.
To Buy Ethereum: you must deposit fiat money to make a purchase.
Compared to traditional exchanges, OTC desks handle such transactions much faster.
3. Place Order & Confirm Trade
Once you deposit funds, you can communicate via various methods and place your order to buy or sell a specific amount of Ethereum. The OTC desk manager will come back to you with an offer. If you decide to buy/sell Ethereum at the offered price, the deal is confirmed, and all you need to do is make the transfer.
Next, both sides will receive an email confirming the trade along with the instructions and a deposit address that can be either the OTC bank account or a crypto wallet. Once the exchange is made, the deal is completed, and you’re done!
When you’re wondering how to buy and sell ETH, you don’t need to focus that much on the step-by-step process because it’s somewhat straightforward. You open an account, make a deposit, place the order and wait for the trade to be completed. The most crucial element is selecting the right platform, which we discussed in detail in this article.
For all the reasons above, choosing an OTC desk will help you better perform as a trader. You get enhanced security, faster transactions, more freedom, and better rates to make healthy profits.
At Secure Digital Markets, we can provide you with all of that via our low-latency software to help you make better trades much faster and do so at highly competitive prices.