Even though Ether handled the market turmoil very well in early 2018 and can still be seen as an attractive investment: Anyone who has bought Ether (ETH) wants to resell Ethereum at some point.
A distinction must be made between an exchange in fiat currency, such as the euro or the US dollar, and an exchange in another cryptocurrency. In addition, there is also the possibility of concluding a forward transaction by selling Ether (without actually owning the coins) and thus profit from the fall in prices. I will go into the three cases in more detail below.
1. Exchange ether for fiat money (eg euro or USD)
Fiat currency exchange is simply the sale of your Ether and crediting the returns in Euro or USD to your bank account, credit card, or other payment method of your choice.
Step 1: Determine the best exchange rate
First you need to know which provider offers you the most fiat currency (EUR or USD) for your Ether. While many price tickers typically display a similar price per Ether, the prices on individual exchanges can differ significantly. For this reason, it is advisable to first take a look at the various online exchanges and their current prices.
Cryptowatch is a service that offers great insight. Here you can see the most important crypto exchanges at a glance, and even almost in real time the price at which Ether has been sold here recently. Below is a screenshot showing the price of Ether on the various exchanges. Only exchanges that trade in Euros and / or USD are listed. Exchanges that also support other currencies can also be displayed if needed.
In this example from Cryptowatch (from 2017), we can see that there is a price difference of more than 20 EUR per Ether. With Kraken you get 148.09 EUR and with Quoine only 126.74 EUR for each Ether. In addition, the EUR / US Dollar exchange rate should always be taken into account. With Coinbase¹, for example, a change at a rate of 174.96 USD is the best price per Ether also in EUR, because this corresponds to approx. 154 euros. However, there is also the currency risk, and later a small USD to EUR exchange fee in case you want to get the Euro. However, these amounts are usually insignificant and depend on the bank or fiat money institute making your withdrawal.
Step 2: Sign up for a crypto exchange
Once you have determined the best exchange rate on a crypto exchange, you need to create an account there. This is usually free.
Note: If you plan to trade Ether on the exchanges more frequently, we also recommend an account with a service like Cryptowatch. There you can buy or sell your Ether directly at the desired exchange with just a few clicks. However, this service costs around $ 15 / month. So it’s only worth it if you want to trade Ether on a more regular basis.
Step 3: Sell Ethereum on a crypto exchange
After registering with a crypto exchange or a service provider for Ethereum, for example Coinbase, you can sell your ETH there.
If you want to sell Ethereum there from your local offline wallet, you must first ‘transfer’ it to your Coinbase online wallet. First, determine the ETH address of your online wallet.
Then open your offline wallet (eg MIST) and click “send” there.
Then enter the ETH address of your Coinbase online wallet. Then enter the amount of Ether you want to transfer and click “Send”.
The set amount of Ether is then transferred to your Coinbase online wallet. In Coinbase, you can then sell Ethereum to Coinbase through the “Sell” menu item. The amount in Euro or USD will then be credited to your bank account.
2. Exchange Ethers for other cryptocurrencies
The process of selling Ether in other cryptocurrencies is a bit easier than exchanging it for fiat money. There are basically two possibilities.
Option 1: Exchange via the exchange platform
Similar to exchanging Ether for fiat currency, an exchange platform can also be used when trading for other cryptocurrencies. Cryptowatch helps you find the best platform for a currency pair. The following example shows under what conditions Ether can be exchanged for Ripple on Binanceor Bittrex.
This option may make sense if you have already deposited your ETH credit to an online account on one of the crypto exchanges. Please consider that this is not advised. Credit can disappear very quickly from the platform in the event of a hacker attack. However, in this example, due to the availability of coins in the platform’s online wallet, you are just one transaction away from owning the new currency.
Option 2: Exchange via crypto-exchange
If you keep your ETH balance in your own wallet and therefore not under the control of a central institution (which is recommended), it would be quite complicated to make the exchange via an exchange platform. You will need to transfer the Ether balance to an exchange first, trade it there, and then transfer the new currency to another wallet. Additionally, transferring credit between different wallets and service providers may incur fees that make the exchange very expensive. If you want to trade Ether directly from one wallet to another currency (and another wallet), trade service providers like Changellyare recommended.
Consider: In addition to the Ethereum wallet, you will also need a wallet for the currency you want to buy.
After entering both currencies and wallet addresses, the transaction can be initiated. The exchange rate offered by Changelly was quite similar to that offered by crypto exchanges at the time we tested it. At Changelly, we obtained 98.5 waves for 0.1044 ethers. With a direct trade at Binance, we got approx. 1.5 ripple (about 1.5% more) at the same time. You are not required to register with Changelly and you save the costs that may be incurred when transferring from the bureau de change to the wallet.
3. Conduct a futures contract for the sale of Ether
As a third option, I have included the sale of Ether as a futures transaction through the use of CFDs. CFD stands for Contract for Difference. It is an agreement between two parties on the difference between the present and future value of an object. The parties specify the underlying purpose of the transaction. The object is therefore often referred to as an underlying. For example, stocks, commodities or even cryptocurrencies can serve as an underlying. It is important to note that when you trade CFDs you do not physically own the underlying (in our case Ether). The value of the CFD is only linked to the performance of Ether.
Assuming you want to bet on a drop in the price of Ethereum. Then you would take a short position on an Ethereum CFD. If the Ethereum price at the end of the contract period is lower than the price at the start, you will receive the difference. As an option, leverage can often be defined for such a transaction. The leverage effect multiplies the gain made, but also a possible loss of value.
Opportunities and Risks in CFD Trading
As described above, it is possible to profit from both rising and falling prices with a CFD (and losing money if the price goes in the wrong direction). Other advantages of trading cryptocurrencies with CFDs are that no wallet is required, CFD traders are generally regulated and there is often the possibility of multiplying profits with leverage. These advantages are contrasted by the fact that the functionality of CFDs is not easy to understand. Because of this, the loss rate (up to a maximum of 100% of the capital investment) is often slightly underestimated when using leverage.
For this reason, it is very important that you familiarize yourself with the functionality of CFDs before trading. A CFD broker offering a training account and a 24/7 information hotline for this purpose is Plus500². The service provider also has a very clear platform and does not charge any commission for CFD trading. The financing is done via the spread, that is to say the difference between the purchase price and the sale price of the contracts.
|² Affiliate link. 76.4% of retail investor accounts lose money when trading CFDs with this provider. You should ask yourself if you can afford to take the high risk of losing your money. Plus500CY Ltd licensed and regulated by CySEC (# 250/14). CFDs are complex instruments and come with the high risk of losing money quickly due to leverage. Between 74% and 89% of retail investor accounts lose money when trading CFDs. You have to ask yourself if you understand how CFDs work and if you can afford to take the high risk of losing your money.|
If you want to exchange ETH for fiat currency, you must first check which exchange platform offers you the best price. Cryptowatch can be of great help here. Then you can register with the respective exchange service provider, such as Coinbaseand exchange your Ether for Euro.
If you want to exchange Ether for another crypto currency, you can do so either through a crypto exchange like Binanceor via a crypto exchange service like Changelly. Which option is advantageous for you depends on where your Ethers are stored and in which cryptocurrency you wish to exchange them.
If you don’t want to physically sell Ethereum, but want to profit from falling prices in the short term, CFDs are the right instrument. For example, you can trade Ethereum-based CFDs on Plus500². The platform also gives you the opportunity to learn more about how CFDs and other financial products work.
Note: Just like cryptocurrencies themselves, CFDs are subject to strong price fluctuations (volatility). This means that you should only invest the money that you are prepared to lose in the worst case scenario. In addition, this contribution does not constitute investment advice.
I wish you lots of fun and success!
|¹ Affiliate link|
|Note: The content of ethblog.de is for informational purposes only and does not constitute investment advice or any other recommendation within the meaning of the Securities Trading Act.|