Cryptocurrency is one of the fastest-growing asset classes on the planet. So in this guide, we’ll show you how to buy cryptocurrency UK and explain everything you need to know to make a cryptocurrency investment UK today.
Where to buy crypto in the UK?
Before we dive into how to buy cryptocurrency UK, you need to find the right broker or exchange. You can compare the best crypto brokers and exchanges, along with their features, fees and payment methods, below. You can even change the investment amount and cryptocurrency you’re investing in to see how much each broker charges!
Cryptocurrencies like Bitcoin, Ethereum, and Ripple now operate in a multi-billion pound trading arena. In fact, more than $250 billion worth of Bitcoin alternatives have changed hands in the last 24 hours alone. As such, it makes sense that more and more people in the UK are looking to get a piece of the crypto action. Therefore, you might be interested in how to invest in Terra or Bitcoin guides.
With that being said, you’re not buying a traditional asset like stocks or bonds here. On the contrary, cryptocurrencies are a new, innovative, and somewhat complex financial instrument. You can find non-familiar concepts like staking or ‘HODLING.’
What is a UK crypto exchange?
In order to trade cryptocurrencies, you will need to use a crypto exchange.
A crypto exchange is a type of online platform that can be used to buy and sell cryptocurrency. Exchanges have access to crypto marketplaces and are able to carry out transactions across networks. There are two types of crypto exchange: centralized exchanges and decentralized exchanges. The main difference between the two is that centralized exchanges are controlled by a third party company whereas decentralized exchanges are built on the blockchain network and provide complete autonomy.
View our list of top crypto exchanges to find out more.
Tutorial: How to buy cryptocurrency with eToro
This is a step-by-step walkthrough of how to buy cryptocurrency UK right now. We’ve used our number one recommended broker eToro, due to its low fees, wide range of cryptocurrencies and tight security, but the process is similar on most brokers and exchanges.
- 📍 Step 1: Open a Brokerage Account at eToro
- 📍 Step 2: Download the eToro App
- 📍 Step 3: Deposit Funds
- 📍 Step 4: Buy Cryptocurrency
📍 Step 1: Open a Brokerage Account at eToro
Visit the eToro website, elect to open a bitcoin account, and follow the on-screen instructions.
You will be asked a range of questions pertaining to your personal information, contact details, and prior trading experience. All in all, this part of the process should take you no more than five minutes.
📍 Step 2: Download the eToro App
Cryptocurrency prices can move in a super-volatile manner at the drop of a hat. As such, you don’t want to be outside of the house only to get back to find out your investment has nose-dived.
With this in mind, it is well worth downloading the eToro app, too. This will not only send real-time pricing updates to your phone, but you can buy and sell bitcoin and other cryptocurrencies at the click of a button.
📍 Step 3: Deposit Funds
You will now need to make a deposit. As we covered earlier, you need to deposit at least $10 at eToro. You can fund your account instantly with a debit card or you can buy crypto with PayPal and Skrill.
📍 Step 4: Buy Cryptocurrency Investment
eToro allows you to buy 40+ different cryptocurrencies. For example if you want to invest in Chainlink, Litecoin, or Dogecoin, or even buy Chiliz (CHZ), eToro has you covered. If you know which one you wish to buy, simply enter it into the search box and click on the result that loads up. In our example, we are buying Bitcoin.
On the next page, click on the ‘Trade’ button.
To complete the cryptocurrency investment process, you simply need to enter the amount that you wish to buy.
As you can see from the screenshot above, we are buying Bitcoin. Finally, click on the ‘Open Trade’ button to buy cryptocurrency with competitive fees.
The best exchanges to buy cryptocurrency in UK – Reviewed
As we have explained throughout this guide, if you want to buy cryptocurrency UK you will first need to locate a good broker. There are many providers to choose from – some good, some bad, and others outright ugly.
As such, if you’re looking for the best new altcoin to buy right now, you might want to consider Lucky Block as it has most crypto-hungry investors on edge.
To help point you in the right direction, below you will find a selection of the best cryptocurrency exchanges currently serving UK clients.
- eToro – Overall the best cryptocurrency exchange to buy crypto in UK
- Crypto.com – Popular Cryptocurrency Exchange with Low Fees
- Huobi – Best Cryptocurrency Exchange for Derivatives Trading
- Coinbase – A good user-friendly cryptocurrency exchange for beginners
- Binance – The best cryptocurrency exchange for experimented traders
- CoinCorner – Beginner-friendly & great customer service for buying cryptocurrency UK
- Coinjar – Great exchange for long-term cryptocurrency investing
- Luno – One of the best app to buy cryptocurrency easily
1. eToro – Overall the best cryptocurrency exchange to buy crypto in UK
eToro is a multi-purpose broker that covers a wider variety of investment products. This includes shares from over 17 stock exchanges, heaps of ETFs, and 16 cryptocurrencies. You can also trade CFD instruments – with the platform covering gold, oil, forex, indices, and more. Did you know that eToro is also one of the best crypto apps?
In terms of its cryptocurrency offering, all 16 coins can be purchased with tight spreads. As such you can invest in Polygon and invest in Polkadot with the click of a button.There is no monthly or annual charge either, so you can keep hold of your cryptocurrencies for as long as you wish. You will, however, incur a small 0.5% FX charge when you make a deposit. You can also sign up to get its crypto card, eToro Money Card.
This is because you will be funding your account in GBP and buying a cryptocurrency that is priced in US dollars. What we really like is that eToro supported fractional ownership. This means that you do not need to buy a full cryptocurrency – which is especially useful when you consider the price of Bitcoin. Moreover, you can purchase Ethereum in eToro to buy NFT tokens, as well as at the dedicated best NFT marketplaces. Did you know that eToro also lets you buy Bitcoin with Neteller?
There is a minimum deposit of $10 at the platform, but you don’t need to allocate this all at once. You could diversify across Bitcoin stocks, multiple coins or simply dollar-cost average on a weekly or monthly basis. An additional feature that you might want to consider is the eToro CopyPortfolio service. This a fully-managed investment portfolio that comes with several different target markets – including cryptocurrencies. Did you know that you can buy Bitcoin with Skrill?
eToro also offers a Copy Trading feature. This allows you to mirror the buy and sell orders of an experienced cryptocurrency trader. There are no additional fees to use this feature. In terms of usability, you can buy cryptocurrency UK at eToro via its website or investment app. The latter is available on both iOS and Android devices, and free to download. Also, if you’re looking for the next Bitcoin you’ll be able to find the hottest cryptos, including the latest meme coins on eToro. For example, you can invest in Shiba Inu and gain access to one of the most popular meme coins on the market.
In terms of getting started, eToro accounts take just a few minutes to set up. Once you’ve entered some personal information, you can instantly deposit funds with a UK debit card or e-wallet. You can also transfer money from your bank account, but this takes a few days. Finally, you should have no concerns regarding safety at eToro, as the platform is licensed by the FCA, ASIC, and ASIC. It also has 13 million clients on its books.
Cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply.
2. Crypto.com – Popular Exchange To Buy Crypto with Low Fees
If you’re looking to buy cryptocurrency with low fees, then Crypto.com is worth checking out. Crypto.com is one of the best crypto exchanges UK, thanks to its stellar reputation, with the platform now having over 10 million users worldwide. The platform offers over 150 cryptocurrencies to trade, all of which can be exchanged using Crypto.com’s mobile app or the web-based exchange platform. The exchange also has an NFT app for buying and selling popular NFTs.
Crypto.com’s maker/taker fees start at 0.4% on either side of the trade, although these can be reduced by 10% if users hold CRO in their wallets. Notably, Crypto.com charges no fees for depositing crypto, although crypto withdrawals will come with a cost based on the specific coin. The great thing about Crypto.com is that users can buy crypto instantly using a credit or debit card – this usually accrues a 2.99% fee, although this fee is waived during the first 30 days of using the platform.
In terms of the user experience, Crypto.com’s trading app is designed with beginners in mind and has real-time price data and trending tickers highlighted on the homepage. Users can also view price charts and certain statistics on each crypto, with various timeframes offered. Finally, users can even utilise the Crypto.com VISA card and spend their crypto as if it was FIAT currency – with no annual fees and up to 8% cashback offered!
Your money is at risk.
3. Huobi – Best Cryptocurrency Exchange for Derivatives Trading
Another top cryptocurrency exchange to consider is Huobi. Huobi is one of the top ten largest exchanges worldwide, regularly boasting over $1.2bn in daily trading volume. The platform offers over 350 crypto assets to trade, including altcoins, DeFi tokens, and crypto-to-crypto trading pairs. Notably, Huobi also provides a selection of markets to trade aside from the spot market – including futures, swaps, and USDT-margined contracts.
In terms of fees, Huobi offers a transparent cost structure for all traders, equating to a 0.2% maker and taker fee. Interestingly, users can obtain a 50% reduction in trading fees by holding and paying fees in HT – the platform’s native token. Crypto deposits are free to make, and Huobi even supports FIAT deposits. Specific payment methods for FIAT currencies are also free, although Huobi will require users to complete KYC checks before making them.
Huobi is also well-known for its security level, as the platform holds 98% of users’ crypto holdings in cold storage. The platform also has an ‘Investor Protection Fund’, which is used as insurance in case the exchange is attacked. Finally, the Huobi trading platform is also packed with valuable features, such as staking, crypto loans, auctions, and even a dedicated crypto-education service!]
Your money is at risk.
4. Coinbase – A good user-friendly exchange for beginners to invest in cryptocurrencies
Coinbase is a popular option for those who are looking to buy cryptocurrency UK for the first time. The platform interface is clean, simple, and really easy to use – making it ideal for cryptocurrency newbies.
Coinbase has an excellent reputation in the Bitcoin and wider cryptocurrency brokerage scene – with more than 35 million client accounts now in operation. The platform is heavily regulated – both in the UK and US. Much like eToro, getting started at this cryptocurrency broker takes just a few minutes. You’ll need to provide some personal data and upload a copy of your passport or driver’s license.
After that, you’re good to go. Coinbase allows you to buy a wide selection of cryptocurrencies in the UK. This includes major coins like Bitcoin, you can buy Bitcoin Cash, Ethereum, Ripple, and Litecoin. You can also buy less liquid cryptocurrencies – like Basic Attention Token, Dash, and ZCash.
In terms of fees, we should make it clear that Coinbase is arguably one of the most expensive in the cryptocurrency broker scene. This is because you will need to pay a cryptocurrency trading commission of 1.49%. This needs to be paid when you buy cryptocurrency in the UK and again when you cash your investment out.
In addition to the aforementioned commission, you will also be charged to deposit funds with a debit card. This stands at a whopping 3.99% – which is huge. As such, if you’re going to use Coinbase to buy cryptocurrency, it might be best to deposit funds with your UK bank account. Nevertheless, once you have purchased your cryptocurrency at this platform, you can withdraw the coins out to a private wallet.
Or, you can keep the funds at Coinbase. Although web-wallets are usually deemed high-risk, Coinbase does have heaps of security controls in place. For example, 98% of its cryptocurrency holdings are kept in cold storage – meaning the wallet is not connected to the internet. Access to the funds also requires several signatures from Coinbase management.
Your money is at risk.
5. Binance – The best cryptocurrency exchange for expirienced traders
Binance is more of a cryptocurrency trading exchange than a conventional broker. But, the platform does allow UK residents to buy Bitcoin and the best defi coins such as decentraland with fiat currency. This includes debit/credit cards and a bank transfer.
The former is instantly processed while the latter will take a number of days to clear. Now, you will need to pay a 2% transaction fee if you buy bitcoin UK with debit card.
While this is cheaper than Coinbase, it’s still a lot more expensive than the 0.5% charged by eToro. Nevertheless, if you are interested in buying other cryptocurrencies – Binance covers hundreds of coins. This includes all major cryptocurrencies and heaps of ERC-20 tokens.
Unfortunately, if you want to buy a different cryptocurrency at Binance, you will first need to buy Bitcoin UK. Then, it’s a case of exchange Bitcoin with your chosen cryptocurrency. After that, you can withdraw the cryptocurrency out to your private wallet – or keep it at Binance.
Your money is at risk.
6. CoinCorner – Beginner-friendly & great customer service for Buying Cryptocurrency UK
CoinCorner seems to be a popular choice for those based in the UK that wish to buy a cryptocurrency or invest in DeFi for the first time. The platform is easy to use and the end-to-end purchase process should take you no longer than 10 minutes.
The easiest way to make a deposit at this cryptocurrency exchange is with your UK debit/credit card. What we also like about CoinCorner is that the exchange allows you to initiate recurring cryptocurrency investments.
For example, you might decide to transfer £100 from your bank account at the end of each month. This is an ideal way to utilize the previously discussed dollar-cost averaging strategy. As an additional bonus, CoinCorner runs a number of cryptocurrency reward programs that kick in when you make purchases.
Your money is at risk.
7. Coinjar – Great exchange for long-term cryptocurrency investing
Coinjar is a popular cryptocurrency exchange based in Australia. However, the provider has since moved into the UK market. Coinjar offers a wide variety of cryptocurrencies – both large and small.
For example, while the likes of Bitcoin and Ethereum are covered, as is Maker DAI. Although the provider is located Down Under, you can easily deposit funds with British pounds.
Best of all, the platform charges a competitive commission structure that averages 0.08% to 0.2%. Coinjar is also a good option if you have some experience in the cryptocurrency trading scene. This is because it offers heaps of advanced charting tools and order types.
Your money is at risk.
8. Luno – One of the best apps to buy cryptocurrency easily
If you’re looking for a Bitcoin trading platform that is not only easy to use, but available via a mobile app – then you might want to consider Luno. This popular provider is great for buying and selling currencies on the move, as its mobile app is designed specifically for your operating system.
This covers both Android and iOS devices. Once you are set up, you can then deposit funds with a UK debit card. Take note, however, that this does attract a fee of 3.5%. In terms of what cryptocurrencies you can obtain, Luno supports Bitcoin, Ripple, Litecoin, and Ethereum.
When it comes to safety, Luno is regulated by the FCA. It also keeps 95% of client funds in cold storage – so external hacks are highly unlikely. We also like the interest accounts that Luno offers. Put simply, by leaving your Bitcoin at Luno, you could earn up to 4% interest annually. This is a no brainer if you are looking to hold onto your Bitcoin for several years.
Your money is at risk.
What is Cryptocurrency?
Whether you’re investing in stocks, ETFs, bonds, or any asset class for that matter – it is important that you understand the financial instrument you are interested in buying. After all, you will be risking your hard-earned money with the view of making a profit.
So, cryptocurrencies are also referred to as digital currencies, as they allow you to send, receive, and transfer funds. Everything is digital, meaning that cryptocurrencies do not exist in their physical form. Cryptocurrencies possess a range of characteristics that set them apart from traditional currencies like the British pound or Euro.
- Cryptocurrencies are not owned or controlled by any government or central bank. Instead, they are decentralized.
- Most cryptocurrencies are backed by blockchain technology. This means that all transactions are secure and anonymous
- When cryptocurrency transfers are completed, the transaction is publicly viewable on the blockchain. This makes the network 100% transparent and free from abuse.
- Cryptocurrencies operate in a borderless nature. This means that transferring coins to the other side of the world will cost the same and a domestic transaction.
Now, it is important to note that you have likely heard of Bitcoin (BTC). This is because Bitcoin was the first and still is the de-facto cryptocurrency of choice. It holds the largest market capitalization and has the greatest mass awareness. However, Bitcoin isn’t the only cryptocurrency out there as you can now gain exposure to the hottest meme coins (for example you could buy Baby Doge Coin) and invest in Dogecoin with low fees and copy trading tools on eToro.
On the contrary, there are now well over 15000 different cryptocurrencies in existence – totaling a market valuation of over $1 trillion. Of this figure, Bitcoin currently represents around 40%, Ethereum around 18%.
In terms of what you can do with a cryptocurrency – each project has a specific purpose. For example, while Bitcoin was created as a payments network, Ripple provides the technology for cross-border banking transactions. With that said, the vast majority of people buy cryptocurrency in the United Kingdom for speculative reasons. Alternatively, you could invest in the best meme coins for exposure to cryptos that are highly sensitive to social hype and impulsive investing.
That is to say, many believe that it is inevitable that cryptocurrencies will play a major role in the future of money – so it is hoped that the value of their investment will increase over time. This works much the same as any other asset class – meaning that the fundamentals of investing in cryptocurrency are relatively straightforward.
Cryptocurrency Prices and Making Money
Bearing in mind that people in the UK buy a cryptocurrency for financial gain, for example, those crypto holders who want to buy Solana, it makes sense that there is a huge marketplace that can facilitate this. Put simply, cryptocurrencies are listed on public exchanges. This allows people in the UK to buy, sell, and trade their preferred cryptocurrency.
Once again, this works the same as traditional shares – which are listed on stock exchanges. Similarly, the value of your chosen cryptocurrency will go up and down on a second-by-second basis. As the industry is borderless, the markets are open 24 hours per day, 7 days per week.
In terms of how cryptocurrency prices work, this is based on conventional demand and supply. That is to say, when there are more buyers than sellers, the price of the cryptocurrency will naturally rise. This is what allows you to make a profit, as you will hope to sell your cryptocurrency at a higher price than you paid.
- Let’s suppose that you buy £1,000 worth of Bitcoin today
- At the time of the purchase, Bitcoin is worth $19,000
- You hold on to your Bitcoin for five years
- When you eventually get around to cashing out, Bitcoin is worth $55,000
- This represents a price increase of 189%
- As such your original £1,000 Bitcoin purchase grew to £2,890
Past performance is not an indication of future results
As you can see from the above example, we quantified the value of Bitcoin in US dollars. This is because the US dollar is the de-facto fiat currency used to value cryptocurrencies in the marketplace.
As a UK investor, this shouldn’t concern you. After all, the best cryptocurrency trading sites in the UK allow you to deposit in British pounds with a debit card, bank account, or e-wallet. Then, the broker in question will simply perform a currency conversion into US dollars.
Everything you Need to Know Before Buying Cryptocurrency in the UK
Cryptocurrency has become a worldwide phenomenon, with both retail and corporate investors flocking to get involved. However, there are a few factors to consider before buying or selling any virtual currency.
Unpredictability and Liquidity
Because digital currencies are so risky, they are considered high-risk assets. Indeed, some have highlighted that they are unsuitable as a currency for this reason. For example, in the same 24-hour period, the leading crypto asset Bitcoin experiences huge market fluctuations.
If you want to purchase cryptos in the United Kingdom, you need be prepared to deal with the acute volatility.
Regulated vs Unregulated
Even though some nations, such as China, have openly outlawed cryptos, others are still developing frameworks to solve in the industry’s flaws. As a result, many crypto-related businesses are not regulated, therefore you should exercise caution when entering the crypto market via an unregulated exchange or DEX.
Threats from Hacking and Identity-Theft
Cryptos are more vulnerable to hacking attempts than traditional financial products because they are primarily available, minted and exchanged via the internet. According to statistics from Chainalysis, cryptocurrency-related crimes have jumped by almost 50% since 2020.
Why Buy Cryptocurrency in the UK?
Cryptocurrencies do not come without fault. For example, they are speculative, high-risk, and in most cases – do not offer anything in the way of regular income. However, there are many reasons why people in the UK buy cryptocurrencies – and are now doing so in their droves.
This includes the following:
Cryptocurrency Prices Continue to Outperform Other Assets
Let’s start with the obvious – the growth of cryptocurrency prices over the past few years. Put simply, investors have seen some uncanny financial gains on popular coins like Bitcoin, Ethereum, and Ripple.
- For example, while Bitcoin was priced at less than 1 cent a mere decade ago, it has since hit all-time highs of $20,000. This represents financial returns in the millions of percent.
- Then you have the likes of Ethereum, which began life at around $2.70 per coin. Fast forward to late 2017 and the same coin would have cost you over $1,400. This represents a growth of over 50,000%.
- In more recent times, cryptocurrency prices are once again on an upward trajectory. For example, while Ripple entered 2020 at $0.19 – it has since reached $0.70. That’s gains of over 260% in less than 12 months of trading.
Ultimately, there is no knowing just how big cryptocurrencies can one day get. This is especially the case with leading projects like Bitcoin and Ethereum. When you consider their global appeal and ability or solve age-old financial problems, the skies really are the limit.
Traditional Investments are Struggling
So how do cryptocurrencies compare to traditional investment classes? Well, it is no secret that leaving your money in a UK bank account will barely get you 1% in interest per year. The FTSE 100 is in dire straights too. For example, the index is worth less today than in 2015.
In fact, the vast majority of stocks listed on the London Stock Exchange have failed to recover their COV-19 losses – some of which are in excess of 50%. Even dividend stocks are having a horrid time this year – with scores of FTSE 100 companies either cutting or outright suspending their payments.
Taking all of this into account, people in the UK are looking at cryptocurrencies as an alternative to traditional investment classes.
New and Innovative Technology
As we briefly noted earlier, each and every cryptocurrency has a specific objective or purpose. In the case of Bitcoin, its anonymous founder wanted to challenge the status quo of the global monetary system. Bitcoin does this by taking control away from traditional banks and financial instruments and back into your own hands.
After all, Bitcoin – like most cryptocurrencies, are decentralized. As such, there is no single owner of the underlying network. Cryptocurrencies are also highly conducive for cross-border transactions.
This is especially useful in the case of remitting money to the third-world, where more than 2 billion people still do not have access to banking facilities. By using cryptocurrency to transfer value, the fees are super low and the transfer often takes just a few minutes.
The key point here is that when you buy cryptocurrency in the UK, you are essentially investing in a new, innovative, and highly disruptive technology. As we know from other revolutionary discoveries like online shopping or smartphones, this can often lead to serious financial gain for early backers. Recently, automated trading bitcoin robots and crypto signals telegram groups have gained momentum and interest in the crypto market, automated bitcoin trading robots such as Profit Revolution, Bitcoin Revolution, Brexit Millionaire, CryptoEngine, Immediate edge, QuantumAI, and BitIQ use algorithmic trading to place orders on crypto-based on predictions of returns.
Barriers to Entry are Low
Retail investors in the UK – meaning that you do not come from a professional or institutional trading background, are somewhat limited in the assets that can be accessed. Sure, the likes of stocks and ETFs are easy to buy – but bonds, government securities, emerging market equities are a lot more difficult to come by.
With that said, you can easily buy cryptocurrency in the UK – with the process often taking a matter of minutes. As we mentioned earlier, all you need to do at eToro is make a deposit with your debit card and decide how much you want to invest.
Diversification is Possible
While most cryptocurrency investors will stick with Bitcoin, it is also worth considering a more diversified approach to the sector. After all, there are almost 8,000 cryptocurrencies in existence, so you can easily spread out the risk by buying multiple coins.
Past performance is not an indication of future results
With that said, you’ll likely only want to focus on major cryptocurrencies – as the vast majority of tiny projects with a minute market valuation. For example, you might allocate 60% of your UK cryptocurrency portfolio to Bitcoin, 20% to Ethereum, and 10% each on both Ripple and EOS.
Cryptocurrencies are a Liquid Asset
Cryptocurrencies are an asset class with high liquidity, meaning that you can easily convert your coins back into cold-hard cash. This is because cryptocurrencies are traded on public exchanges 24 hours per day.
As such, all you need to do is exit your position by converting your cryptocurrency back to pound sterling, and then withdraw the money back to your debit card or bank account.
This is crucial, as it means your money is never locked up in times of financial need.
What Cryptocurrencies Can You Buy in the UK?
Although there are thousands of different cryptocurrencies can that be purchased, most of these are ERC-20 tokens. For those unaware, this means that the cryptocurrency was built on top of the Ethereum blockchain. In other words, the underlying technology is not proprietary to the digital currency in question, however, you can also invest in blockchain technology too.
With this in mind, very few UK cryptocurrency brokers will offer ERC-20 tokens – as demand is so low. Instead, you would need to use a crypto exchange to obtain one of these tokens – which can be a cumbersome process.
This is because conventional cryptocurrency exchanges are typically unlicensed and thus – do not have the legal remit to support fiat deposits (debit card, bank transfer, etc.). Instead, you would need to buy a popular cryptocurrency like Bitcoin, transfer it into the exchange, and then convert it to your desired ERC-20 token.
As such, you’re best to focus on cryptocurrencies that are listed in the top 20 in terms of market capitalization. This is because it is likely that your chosen UK broker offers some, if not most of these popular cryptocurrencies – which are listed below.
- Ripple (XRP)
- Bitcoin Cash
- Dogelon Mars Coin
- Binance Coin
- Ethereum Classic
- The Graph
- Samoyed Coin
- Metaverse Crypto
FCA broker eToro, for example, offers 60+ cryptocurrencies – all of which you can buy in the UK commission-free. You can also buy many new cryptocurrencies on eToro.
How to Invest in Cryptocurrency UK
Cryptocurrency isn’t just for short-term trading. You can also invest in cryptocurrencies and hold them for years to come.
The process for buying cryptocurrencies for investment is the same as for trading. However, instead of selling your cryptocurrency a short while later, you simply hold onto it. Some exchanges even offer crypto staking and interest when you deposit your cryptocurrency holdings. You could read more on this topic via our Celsius review.
Additionally, if you’re interested in crypto lending then you could read our Nexo review for everything you need to know about cryptocurrency lending in 2022. In order to invest in cryptocurrency UK, you’ll need a crypto wallet. This is a digital wallet where you can store cryptocurrencies just like you would store fiat currency in a bank account. Your cryptocurrencies can remain in your wallet safely until you’re ready to sell.
How To Buy and Sell Cryptocurrency UK Safely
If you’re wondering how to buy cryptocurrency UK safely, there are several precautions that you can take.This includes:
Only Use a Regulated Cryptocurrency Broker
By using an online broker that does not have the legal remit to sell cryptocurrencies – you are asking for big trouble. After all, you will be required to deposit your hard-earned money into the platform. As such, we would strongly suggest that you only buy cryptocurrency in the UK from a regulated provider.
The likes of eToro are regulated by three tier-one licensing bodies. On top of the UK’s Financial Conduct Authoriity, this also includes ASIC (Australia) and CySEC (Cyprus). You also have an extra set of regulatory eyes keeping you safe – as eToro is registered with FINRA in the US.
Dollar-Cost Average to Avoid Volatility
As we briefly noted earlier, not only are cryptocurrency assets speculative, but they are highly volatile. This means that the value of your cryptocurrency investment can go up and down in a parabolic manner. This is likely to put newbie investors off, as the emotional side-effects of high volatility can be daunting.
In order to counter this, it might be worth considering a dollar-cost average strategy when you buy cryptocurrency in the UK. Put simply, this means that instead of injecting a large lump sum into cryptocurrency, you invest small but regular amounts.
- For example, you might invest $25 per week when using eToro.
- In doing so, every time you make a purchase you will get a different cost price.
- Over the course of time, this cost price will average out nicely, subsequently ensuring that volatility has no impact in the long run.
After all, even if your cryptocurrency goes down in value, dollar-cost averaging allows you to take advantage of this by making a purchase at a lower price!
Consider a Hardware Wallet
Although a lot of people that buy cryptocurrency in the UK will choose to leave their coins at their chosen broker, some of you might want to withdraw them to a private wallet. In doing so, you will retain full control over your cryptocurrency, and thus – you are not relying on a third-party to store them safely.
However, both desktop and mobile cryptocurrency wallets are vulnerable to remote hacking attempts. If successful, you could lose your entire cryptocurrency portfolio in one fell swoop. If you’re wondering how to buy cryptocurrency safely and then securely store it yourself, we would suggest considering a hardware wallet.
This is as safe and secure as it gets in the cryptocurrency storage arena, as your hardware wallet is never connected to the internet. As such, this makes a remote hacking attempt virtually impossible. Industry leaders in this space include Trezor and Ledger Nano.
There are also other forms of crypto storage from hardware, software and mobile crypto wallets. You can see our full list of cryptocurrency wallet reviews below:
What Payment Methods Can You Use to Buy Cryptocurrency UK?
A time not so long ago, UK cryptocurrency exchanges could not accept fiat currency deposits. This made it really hard to buy cryptocurrency in the UK from the comfort of your home. Then, a number of exchanges popped up that allowed you to deposit funds via bank transfer. At the now-defunct exchange MTGox, the bank deposit process often took up to one month to process.
Fortunately, the cryptocurrency scene has since opened up to regulated brokerage sites – meaning that they have the legal remit to accept a full suite of popular payment methods. For example, the likes of eToro allow you to buy cryptocurrency in the UK with the following options: Visa, Visa Electron, MasterCard, Maestro, PayPal, Skrill, Neteller, Trustly, and UK Bank Transfer.
Best of all, each of the above payment methods – with the exception of a bank transfer, are instantly processed. This means that as soon as you confirm the deposit, you can buy cryptocurrency in the UK straight away.
For more relevant reading, be sure to check out the following guides on how to buy crypto with various payment methods:
Risks When You Buy and Sell Cryptocurrency UK
Whether you’re looking to invest in cryptos or trade tokenised cryptocurrencies, it is only right that we also discuss the risks.
You can Lose Money
Sure, all investments can potentially result in you losing money. However, the risk of loss is substantially higher in the world of cryptocurrencies. This is especially the case with smaller coins – such as the previously discussed ERC-20 tokens.
For example, there are thousands of cryptocurrencies that during the boom of 2017 saw triple and even quadruple-digit percentage gains.
However, the vast majority of these collectively burned out – subsequently resulting in losses as high as 95%. This means that by investing £1,000 into one of these virtually-dead cryptocurrencies, you would now be left with just £50.
Take note, such as nose-dive is not relevant to just ERC-20 tokens. On the contrary, major cryptocurrencies – including Bitcoin, have encountered huge losses in recent years. For example, had you bought 1 Bitcoin in late 2017, you would have paid a price of just under $20,000. Fast forward just 12 months and the same 1 Bitcoin was worth $3,000.
This means net losses of 85%. As we now know, Bitcoin has since recovered. At the time of writing, the digital currency is inching very close to its previous all-time high of $20,000. All in all, this also highlights that you need to be patient when you buy cryptocurrencies in the UK – much like you do with stocks and shares.
Cryptocurrency Regulation is a Grey Area
Not only is cryptocurrency regulation a grey area in the UK, but globally. This is because in most jurisdictions there is no cryptocurrency-specific legislation. Sure, you have the likes of Malta, Japan, and Gibraltar that have since enacted laws and regulations, but most countries – including the UK, haven’t.
So what does this mean for you and your UK cryptocurrency investment?
- Well, the FCA has taken somewhat of a lead in providing cryptocurrency guidance. This does make sense when you consider the multi-billion pound trading scene that digital currencies operate in.
- However, this is largely linked to anti-money laundering regulations – such as brokers being required to verify all UK cryptocurrency buyers.
- The key problem is that the UK – or any nation for that matter, cannot truly regulate Bitcoin in the truest form.
- After all, it is a decentralized technology meaning that no single person or entity controls the network.
On the other hand, there is always the risk that the UK government could one day ban cryptocurrency transactions outright.
Although technically it could not prevent you from sending coins from one wallet to another, it could easily place an outright ban on brokers offering cryptocurrency services. If it did, this could have a major impact on your ability to get a return on your cryptocurrency investment.
Risk of Hacking Attempt
Although we briefly discussed third-party hacks earlier, it is important to clarify that should you encounter one yourself – your entire cryptocurrency balance could be stolen. This is because whoever has access to the wallet itself has the ability to transfer coins out. As soon as this happens, your coins will be gone forever. Some wallets like the Neo wallet have multi layer security.
This is in stark contrast to having your bank account hacked. In the vast majority of cases, UK banks are legally required to reimburse you for the loss – and quickly. However, no such third-party exists when you decide to store cryptocurrencies in a private wallet, so do bear this in mind.
Selling Cryptocurrency and Making a Profit
Once you have made a cryptocurrency purchase in the UK, you are then at the mercy of the markets. That is to say, in order to make a profit, you need the value of the cryptocurrency to increase. The only way that this can happen is if demand outpaces supply and thus – there are more people buying your cryptocurrency than selling it.
Here’s a basic example of what a profitable cryptocurrency investment might look like:
- You buy £2,000 worth of Ethereum coins at a market price of $200
- You leave the coins at eToro for 3 years
- The value of Ethereum is now at $2,000
- This means that the cryptocurrency has increased by 900%
- As such, your £2,000 Ethereum purchase is now worth £20,000
Now, as you opted to buy the cryptocurrency at eToro, realizing your profit is easy. All you need to do is click on the ‘Sell’ button within your portfolio, and that’s it – the sale will be executed instantly. Then, the £20,000 proceeds would be added to your eToro cash balance – and available for withdrawal back to your debit card, e-wallet, or bank account.
On the other hand, if you withdrew the coins from your chosen cryptocurrency exchange into a private wallet, you would need to add an extra step. This is because you would first need to transfer the coins from your wallet back into the exchange, convert them to USD, and then make a withdrawal. This would incur additional fees, so do bear this in mind.
Conclusion – How to Buy Crypto UK
This how-to buy cryptocurrency in UK guide has covered all bases. As you now know, there are many brokers and exchanges that now allow you to buy cryptocurrency with a debit card, bank transfer, and even an e-wallet.
You do, however, need to spend some time finding a platform that meets your needs. If you’re looking for the best FCA-regulated broker to buy cryptocurrency from today, eToro gives you access to 60+ digital coins – all of which can be purchased with low fees and tight spreads.
You can get started at eToro by clicking on the link below!
Cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply.