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eToro is an excellent brokerage platform for acquiring Ethereum Classic from USA
Why do we recommend it?
- There are uncountable investment options
- Leverage is allowed
- It's really simple and intuitive
- Allows to learn from other investment moves
- Accepts “shorting” or short-selling
Go to the official site in English: www.etoro.com/ethereum-classic
In case you are considering it, eToro is probably the best option nowadays to purchase Ethereum Classic from USA.
eToro is famous for making “social trading” a trend. Social trading is a revolutionary way of investing in which traders can emulate the strategies of other investors who have been making profits for years.
eToro is very useful if you don't have much experience in trading. You can rest assured that you are doing a smart investment move when replicating those from subjects with a great deal of expertise. And for those skilled investors willing to share their techniques with the community, eToro pays for it.
Besides, the interface of this platform is amazingly intuitive, ideal for those who want to begin in the Ethereum Classic world, without ending up overwhelmed with tons of numbers and information.
What are Contracts for Difference?
It is possible that you have found the initials CFD more than once if you entered eToro before. Before we explain this further, you must know that CFDs on eToro are only possible when you go short or use leverage over x2 (but the platform does not even allow this).
For the record, and if you want to know about day trading cryptocurrency or other advanced practices, next you will also find out about terms such as going short and leverage.
Even if you aren't “in the black”, you can still operate on eToro with CFDs. In a hypothetical case: you believe that the Ethereum Classic will fall, so probably you consider that the best thing to do is refrain from getting in until it does. But if it really falls, it might mean extra money for you.
You can accomplish that by “going short”. Basically, it works like this:
- You ask someone to lend you, for instance, 100 units of Ethereum Classic, which cost $ 5,000 at the moment (obviously, these numbers aren't real)
- You sell the 100 units and earn $ 5,000
- The Ethereum Classic devaluates from $ 50 to $ 30
- You buy all 100 units one more time, but at the current price, $ 3,000
- You give back the 100 units
- You will have made $ 2000, since you keep the difference
It all seems more tricky than it really is. Just keep in mind that by trading in Ethereum Classic on eToro, with CFDs you can make a profit when you anticipate the price will fall.
Futures Vs CFD
In case you are interested, next you have some major differences between CFDs and Futures:
- Which are the counterparties? In the case of Futures, the counterparty is another investor. In CDFs, it’s the broker (eToro)
- Date of expiry Futures have a determined expiration. CFDs don’t have expiry date
- Markets available for trading Futures include fewer options to trade. CFDs include a wide range of possibilities.
- Minimum deposit amount or “trade size” Costs for Futures are higher than costs for CFDs.
- Leverage With Futures, you can’t leverage; while with CFDs it is always possible.
In case you still don't know what “leverage” is, we'll describe it briefly: it is, simply, the possibility to use a higher amount than you actually have. For example, you can enter with $ 100, but if you leverage x2, your initial investment will be $ 200.
What you should know about leverage
Let's say that you have complete certainty that Ethereum Classic will rise, and you consider “going long, but you only have $ 1,000 available. However, you have the option of investing more money and earn higher profits.
Possibly, you could ask a financial company for a loan, wait for it to be accepted, wait for the money, send the money to eToro, confirm that it arrived, and then acquire Ethereum Classic… Nevertheless, when you finish doing all that, probably Ethereum Classic would be already much higher (if your prediction got confirmed), and it wouldn't be a good idea to invest.
Using leverage, you can get that amount of money with two clicks. It's just like a loan, but much better: from eToro itself. You can get financing to invest much more money than you actually have on the eToro Wallet. As in the image below, you will see the different options you have:
With other assets, the ability to leverage is greater. Why? Because leverage is most common in short-term operations, and cryptocurrencies tend to be a medium or long-term investment. Let's talk a bit more about how leverage works:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 are a “loan” from eToro).
- A few days later, Ethereum Classic does rises, as you assumed, and now the cost of your investment is $ 2,400 (20% higher), so you decide to sell back because you want to play it safe.
- The $ 1k of leverage will be deducted, and you will have $ 1,400 left; which means you've earned $ 400, since the other $1,000 was yours initially.
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is pretty decent.
It may sound too good to be true. The thing is, you can also lose. If everything goes according to plan and the price goes up, you will earn more money in less time; however, if the value of the asset goes in the opposite direction, you will also lose more in less time.
For instance: if the price falls by 10%, you won't lose $ 10, but twice that figure, which means $ 20. Therefore, when using leverage it is very important to know other two terms: Take Profit and Stop Loss.
Take Profit is used as a form of reducing risks when trading. When you enter, you can set a profit limit and ask that your position is automatically closed when the asset reaches a price.
If you purchased Ethereum Classic at $ 100, you can ask eToro to close your operation when it reaches $ 120. That way, you make sure you won't change your mind and decide to wait a bit longer in case it keeps going up, which could be a mistake since the price could go down again.
Also, if you use leverage you absolutely need to place a Stop Loss order (take into account that any small loss is greater with leverage). You always need to mark a Stop Loss lower than that suggested by eToro.
What are ETFs?
What do you know about Exchange-traded funds or ETFs? They are passively managed funds, known for combining the advantages of stocks and mutual funds, because they can be exchanged regularly at market price, but include a much wider diversity of assets and the fees are significantly lower.
Shares
Now let's talk about the most well-known financial assets: stocks. Stocks are fractions in which a company can be shared, and you can be a shareholder of a company and obtain a profit, but you must know where to invest your money.
We could say that there are two basic kinds of shares: those that pay dividends and those that do not. Those that pay, at the end of the fiscal year, distribute profits among the stockholders; the latter, on the contrary, do not. But that doesn't mean that those of the second type have less to offer. If a company does not pay every year but has a lot of potential, it can still represent a good inversion, since selling the shares eventually could pay a lot more.
If you invest in stocks that pay out dividends, you will receive them into your account on eToro. Then, you can collect that money or you can choose to reinvest it. However, you can take advantage of compound interest, so our suggestion is that you reinvest.
Remember that when investing in shares on eToro you can “dope” your trades with leverage, but in that case, you will not receive returns as the trade would be a CFD. That is why for long-term investments, it is better not to use leverage: you can end up not gaining at all, because you will not receive interest and also you will have to pay fees while your position is open.
ETFs
ETFs or Exchange-Traded Funds are a type of passively managed fund, similar to index funds. They can be described as a merge between stocks and mutual funds. They can be traded like regular stocks, but include a wide diversity of assets and the rates are much lower than those of an actively managed fund.
Index Funds
This is the best option for people who can invest in the long term, especially for those who are starting to trade, because it is less expensive, diversified, and safer.
Perhaps you have a different idea, but it is very hard to beat the market (yes, you have surely heard of managers who obtain huge profits).
But except for Warren Buffett and a couple more, not everything is as good as it sounds: when someone brags about having beaten the benchmark, they have probably done so for a short time, or the rates are so high that it ends up being better for you to index (whit minimal commissions). Besides, if something happened in the past it doesn't mean necessarily that it will happen again in the future.
The good thing about index funds is that they perfectly solve these two issues: their fees are insignificant and in the long term they almost always beat active managers.
Investment strategies
You can operate cryptocurrencies in many different ways: for example, you can buy and hold, or you can day trade (taking advantage of market volatility).
If you are just beginning in the world of investment, my suggestion is something in the middle: when you open your position, set a stop-loss 15-20% under the highest price, and let the magic happen.
For instance, if you purchase a cryptocurrency when its price is $ 15, then it rises up to $ 25 and decreases back to $17, the stop-loss will close your position at $ 21 or $ 22. Thus, you will obtain a fine profit.
It may sound more appealing to sell when the price is at its maximum, right before corrections, but unless you're a fortuneteller, that is not possible. The above method is much more down-to-earth and, well applied, it can work very well.
And when you have gained more experience, you will be ready for more advanced trading techniques, like going short or using leverage.
Can you rely on eToro?
eToro is very meticulous with the information about past performances from investors, and its reliability has been tested many times by independent organizations.
The main headquarters of eToro is in Cyprus, and therefore the broker is approved by the Cyprus Securities Market Commission (known as CySEC), which covers debts up to € 20,000 from its clients, including those from USA. On the other hand, eToro meets all the strict requirements of the European Union.
eToro responds to the European Financial Instruments Market or MiFID, and to the Financial Conduct Authority or FCA in the USA. Apart from the above, it has a trajectory of fifteen years, with more than 20 million users around the world. So, yes, it is a safe broker.
It is also important to mention the great customer service. You can reach them by phone or use their online chat.
How to use eToro
We mentioned previously that eToro is very friendly and intuitive. Anyone can start using it without having to read endless explanations.
Everyone who has used social networks like Twitter or Pinterest, knows enough to operate with the eToro interface.
Now we will detail the sign-up process and the sections of the eToro interface that you should familiarize yourself with.
You will have to provide some personal data when registering.
Before you end up with the sign-up process, you will also find some questions about your previous investment activities.
But don't feel intimidated. The only intention is to know more about you and be clear about which financial instruments they should recommend according to your knowledge and experience.
Let's review the different tabs of the interface.
In “Set Price Alerts” you can set alerts on the price of certain securities. You just have to click on the three points at the end of the line and you will be able to program a price alert. It is a very useful tool for when you are after an asset that is falling, but perhaps you think that it will decrease even more.
“News Feed” is the more “social” section. There, users can interact and share their knowledge.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. As we discussed in this guide, the types of financial instruments available on are:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Forex
- Index funds
The concept “social trading” comes to life within “People”: there, you can duplicate the movements of the users you find most inspiring.
You will be able to search and find users according to your interests. You can apply filters like country, average profits, or financial market. When you choose an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, in proportion. If you invest $ 1000 and the user puts 20% of their funds in an asset, eToro will also invest 20% of your money in the same company or instrument, in this case, $ 200.
Finally, you will also see the CopyPortfolios divided into three main categories: “Top Trader”, “Market” and “Partner”.
The advantage of copying to CopyPortfolios instead of individuals is that this way you will diversify the risk. There are all kinds of portfolios that you can identify easily and are classified by sectors. Thus, in case you suspect a specific industry, like e-commerce or healthcare, will prosper in the future, you should look for that specific portfolio.