How to buy Ethereum with Bitcoin? This guide will show you the 4 best options in buying ETH by using different perspectives.
Bitcoin and Ethereum are both cryptocurrencies that only can be traded or held in a digital environment. In other words, they only exist in cyberspace and are using a blockchain network to transfer value.
This is contrary to fiat currencies like USD, EUR, or GBP that are fungible assets and can be used as cash in the real world. In the last decade, cryptocurrencies like BTC or ETH made an impressive rise and are here to stay to be used as money like the EUR or USD.
Although Ethereum and Bitcoin can be used as online digital money they are not the same. Moreover, Bitcoin as the oldest cryptocurrency can only be used as ‘online money‘ or as a store of value. On the other hand, there is Ethereum that also uses a token called ETH to transfer value.
However, this decentralized network is also using smart contracts that can have infinite uses cases and uses ETH and GAS to settle transactions.
In this guide, I’m not going into detail about the differences and benefits of both cryptocurrencies or blockchain technology. In fact, I will explain to you the best options you have in buying Ethereum with Bitcoin as they are both cryptocurrencies that can be traded for each other. So let’s go 😀!
Why Buy Ethereum with Bitcoin?
As stated above, Ethereum and Bitcoin are both digital cryptocurrencies and can be exchanged for another. If you are a cryptocurrency investor that already bought some BTC and wants to diversify your portfolio. Additionally, to acquire ETH it’s possible to use the crypto market to trade BTC for ETH instead of just buying ETH with USD or a credit card. Here are three reasons:
1. Buying Ethereum with Bitcoin is cheaper and faster
So, why buy Ethereum with Bitcoin instead of just fiat currency? One of the main reasons to do this it’s simply quicker and cheaper to purchase ETH with BTC. For instance, if you want to buy new Ethereum(ETH) with a credit card you have to pay additional fees of about 3,5 to 5% for using the Visa or Mastercard network.
Also, bank deposits or wire transfers to exchanges like Binance or Kraken could take days where buying Ethereum with Bitcoin just takes minutes(more on this later on).
2. Ethereum can be staked
Another good reason to buy ETH with BTC is that Ethereum 2.0 can be used as passive income to acquire more ETH. How does this exactly work?
With Bitcoin as an investment, your only option would be to just HODL and wait for the price to go up over time. On the other hand, there is Ethereum that uses a Proof-of-Stake technology to mint new coins and to secure the network.
One of the main benefits of this technology is that you can lock up your coins into a smart contract for a certain period of time(at least 180 days). In addition to locking up your coins, you get rewarded with new cryptocurrency and can be ranging from 5 to 15% APY.
3. Ethereum can be used on DeFi platforms
The last reason to acquire Ethereum with Bitcoin is to use this ETH on DeFi platforms. As explained above Bitcoin and Ethereum are using both different blockchain networks to transfer coins.
The Ethereum network uses smart contracts which enables countless new opportunities to organize your finances. One of these opportunities is DeFi platforms like Uniswap where you can transfer your ETH tokens and exchange/swap them for DeFi tokens.
Best Ways To Buy Ethereum with Bitcoin
How to buy Ethereum with Bitcoin? In general, buying a cryptocurrency like Ethereum(ETH) isn’t that complicated anymore compared to 5 years ago. For instance, nowadays hundreds of centralized cryptocurrency platforms exist where you can trade BTC for ETH.
In this specific case, you already own some Bitcoin and want to acquire Ethereum with it. Therefore, in this chapter, I will list the best options you have to buy Ethereum with Bitcoin regardless of where you live in the world.
#1 Buy Ethereum with Bitcoin on a Centralized Exchange
As stated above, nowadays, hundreds of different platforms exist where you can trade Bitcoin and acquire Ethereum with it. We call it a centralized exchange because you have to deposit your Bitcoin at their platform and trust them for holding it.
The entire crypto industry is still very young and also cryptocurrency exchanges have to suffer from hacks or other attacks. Additionally, this is the main risk when depositing your Bitcoin there. Therefore, it is strongly advised to withdraw your crypto immediately when you are not using the platform anymore.
Advantages of holding Bitcoin at Exchanges
- High liquidity – Centralized crypto exchanges are very popular these days and being used by millions of traders. As a result, it’s very easy to trade any crypto you want almost immediately.
- Security – Your crypto will be held in custodian wallets and you don’t need to worry about securing your own assets(This can also be a dis-advantage).
- Depositing fiat – Most modern exchanges offer depositing fiat currencies like USD, EUR, GBP or BRL. Also, depositing is very cheap and can mostly be done within 1 business day.
How to buy Ethereum with Bitcoin on Exchanges?
In general, if you want to trade Bitcoin or other cryptocurrencies you have to sign up at a centralized cryptocurrency exchange first. Next, to proceed you will have to undergo a sign-up process once that is very straightforward. The steps are as follows:
- Sign up for a free account
- Verify your account by email or mobile phone
- Create a new Bitcoin wallet in your account
- Send Bitcoin to this wallet-address
- Trade Bitcoin for Ethereum(easiest way is to perform a market buy order)
After you have traded BTC for ETH, the platform will automatically create a new Ethereum wallet for you and send the funds there.
Most Trusted Cryptocurrency Exchanges: Comparison
Below an overview of the most trusted crypto exchanges to buy, trade, and sell Bitcoin and other altcoins. The assessment is based upon thorough research into the platform’s features, trading pairs, and payment options. Also, supported currencies, trading fees, customer support, and security methods.
|Platform||Maker fees||Taker fees||Rating|
#2 Buy Ethereum with Bitcoin from Cold Storage
You are not planning to trade your Ethereum for any other cryptocurrency? Also, you don’t mind holding and secure your private keys? A good option would be to send your Ethereum(ETH) into cold storage.
What does cold storage mean? Cold storage is considered hardware wallets that are not connected to the internet. They will allow you to hold your funds without being worried about being hacked. Hardware wallets tend to look like pen drives that connect to your smartphone or computer and help you handle your digital assets.
You will have a seed phrase (24 words) that will help you recover your funds in case you lose the device. This seed phrase should be kept in a safe place and should never be revealed to anybody else.
Finally, a good example of a quality hardware wallet is Ledger Nano, which is an external USB drive and uses BlueTooth for connectivity. Besides holding BTC or ETH on the Ledger device it is also possible to trade or swap cryptos without sending your crypto elsewhere.
How to buy Ethereum with Bitcoin on Ledger
- First, install the firmware of the Ledger Nano device
- Start installing the Bitcoin App by opening the ‘Manager’ on Ledger
- Next install the Exchange App
- Connect and unlock the Ledger device
- Select Bitcoin and click receive Tab
- Use QR code or copy public key to deposit BTC here
- Wait for you Bitcoin to arrive
- Start the Exchange App on Ledger Live
- Next click ‘Swap’ in the Exchange App
- Choose exchange BTC for ETH
Remember that the Ledger wallet uses a built-in exchange feature. Additionally, this feature uses a third party(Coinify) so buying comes at a cost: 4.5% credit card fees or 1.7% for bank transfers.
For more information on how to use the Exchange App on Ledger go here.
#3 Buy Ethereum with Bitcoin instantly
Are there platforms available that don’t require you to deposit BTC first before you can exchange Bitcoin for Ethereum? The answer is yes, certainly!
In particular, there are several platforms available that offer widgets to buy or swap crypto immediately at the cheapest rate. A good example of such a widget app is Changelly.
Swap crypto with Changelly
Notably, the Changelly cryptocurrency platform can be very useful for those wanting to buy Ethereum and other virtual currencies instantly. As you can see in the image above, you will be able to acquire digital assets as soon as you enter the site.
The widget will ask you which currency you want to use and it will immediately offer you the amount of the virtual currency you want to receive in your wallet. The process is very simple and straightforward where the interface makes it intuitive as well.
Changelly is certainly a leader in terms of its offering to users. Dealing with and handling digital assets in such an easy way is going to be very pleasant. Users will not have to be worried about learning how to trade, placing market or limit orders, or withdrawing their funds to their wallets.
At the same time, Changelly will have a smartphone application available that can be downloaded using Google Play or the App Store. Both of these applications will work as smoothly as the web version and will allow you to get access to the same services you would normally get using the web platform.
The advantages of using Changelly
- Very fast, buying crypto can take minutes
- More than 140 cryptocurrencies available
- Very secure
- Integrated with many wallets and other exchanges
#4 Buy Ethereum with Bitcoin by using a Software wallet
Last in the list of options to buy Ethereum with Bitcoin is by using a software wallet.
Software wallets are very easy to use. That’s definitely the best thing they offer. However, they do not have the security features of hardware wallets like the Ledger Nano explained earlier. You could be affected by a computer virus or targeted by a phishing scam.
If the hacker has access to your computer, they could eventually control your software wallet. That is something to consider. So why use a software wallet instead?
For instance, if you are a cryptocurrency user that prefers to spend digital assets, a software wallet could work better. Software wallets can be relatively secure and are also very easy to use. Furthermore, they can be used to make daily payments in virtual currencies and to send and receive transfers.
How to buy Ethereum with Bitcoin by using a software wallet? In this specific case, you want to exchange BTC for ETH and unfortunately, there are not many software wallets that have this function built-in.
Luckily for you, there is an option in the Exodus wallet that uses a third-party provider to instantly exchange BT for ETH without sending your funds elsewhere.
Exchange crypto by using the Exodus wallet
This wallet has been there for a while and has a proven track record of being very secure. Therefore, the Exodus Wallet allows you to store your crypto offline(with Trezor) and when needed, connect with their software wallet app.
Another interesting feature of Exodus is the number of cryptocurrencies(130) that can be stored in the app and offline.
Besides holding or storing Bitcoin it’s also possible to buy and sell with a built-in exchange feature that uses the Changelly platform.
Although Bitcoin and Ethereum are both cryptocurrencies their tokens(BTC and ETH) live on different blockchain networks. Therefore, acquiring ETH with BTC can be complicated if you don’t want to use a regular cryptocurrency exchange.
In this guide on the best options to buy Ethereum with Bitcoin, I have given you all scenarios possible to do so. In summary, these are the best ways to do this:
- Acquire ETH with BTC at a cryptocurrency exchange
- Swap BTC for ETH by using a widget app
- Buy Ethereum with Bitcoin from cold storage
- Use a software wallet to purchase ETH
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