Home » cryptocurrency » bitcoin investment

Bitcoin Investment UK – How to Invest in Bitcoin

Where to Invest in Bitcoin & Find the Best Rates UK

Before we show you how to invest in Bitcoin, you need to find the right broker or exchange. You can compare the UK’s best Bitcoin investment platforms, 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 platform charges!

Since Bitcoin was introduced in 2009, this digital currency has promised to transform the way the world uses money. While it hasn’t supplanted traditional currency yet, Bitcoin has grown from an asset that few people had ever heard of to one worth around £150 billion. In fact, Bitcoin has a higher market cap than even the largest companies in the FTSE 100.

Bitcoin investment in the UK presents an opportunity to get in early on an asset that still hasn’t reached its full potential. On top of that, it allows for diversification away from the stock market. Although Bitcoin’s price has its ups and downs, this cryptocurrency has so far continued to gain in value over the long term.

In this guide, we’ll cover everything you need to know about how to invest in Bitcoin in the UK.

What is Bitcoin Investment UK?

BitcoinBitcoin investing in the UK means buying Bitcoin and holding it for the long term. With long term investing, the goal is to buy Bitcoin now and then hold it for months or years before selling. During that time, you might also add to your Bitcoin position when the price dips to get even more exposure to this digital currency in your portfolio.

Notably, Bitcoin investment in the UK is different from cryptocurrency trading. Active trading, whether day trading or a longer-term type of trading, involves actively buying and selling Bitcoin based on price volatility.

You can invest in Bitcoin in much the same way that you would invest in stocks. Simply buy Bitcoin through a Bitcoin exchange to hold it in your portfolio. Some Bitcoin investment sites, like eToro, are even full-fledged UK stock brokers so you can keep your Bitcoin digital wallet and your stock portfolio side by side.

Is Bitcoin a Good Investment?

Investors in the UK and around the world have been debating whether Bitcoin was a good investment ever since the currency and blockchain were introduced as alternatives to fiat currency in 2009. While many investors were initially skeptical of digital currencies like Bitcoin, cryptocurrencies are now mainstream trading digital assets in many ways. Many UK brokerages offer Bitcoin trading and it is easier than ever before for Bitcoin investors to add to their positions.

So why should you invest in Bitcoin in the UK? There are a couple reasons why Bitcoin is a good alternative investment.

Price Appreciation

The number one reason for Bitcoin investment in the UK is that this digital currency has enormous potential for long term price appreciation. Since blockchain technology was came into focus in 2009, the price of Bitcoin has skyrocketed over 9 million percent. Last year, Bitcoin not only crushed the stock market, but even generated higher returns than gold.

In 2020, Bitcoin has returned 170% since the start of the year and recently hit a new all-time high of over £14,000. With performance like that, it’s hard to argue with Bitcoin’s investment potential.Bitcoin Price Chart

To be sure, there are no guarantees that this upward trend will continue or that Bitcoin will continue to outpace the stock market. However, there are a couple reasons to be bullish on the future of Bitcoin.

First, the availability of cryptocurrencies is increasing as central banks around the world come to terms with digital currency and blockchain technology. As Bitcoin wallets and Bitcoin trading become more accessible, interest in Bitcoin investing will rise and the price of the coin will follow.

Second, Bitcoin’s success can breed more success. As the price of the coin rises and it continues to beat the stock market and gold, Bitcoin is increasingly gaining popularity among everyday investors. The day may come when Bitcoin is a part of any ETF or mutual fund that contains gold, and that will mean investment of trillions more pounds globally in Bitcoin.

Finally, we have likely only seen the beginning of Bitcoin’s potential. Bitcoin is increasingly being used throughout the developing world, which for now doesn’t have play a huge role in global investment. That could change in coming decades as the developing world grows and gets richer, and Bitcoin will be a familiar target for new investors across Africa, Asia, and South America.

Diversification

Another major reason why UK Bitcoin investing is worth considering is that digital currency offers portfolio diversification. Bitcoin often rises in value when other assets, like stocks and forex, fall. During the coronavirus pandemic, for example, Bitcoin rebounded much faster than the global stock market.

By adding Bitcoin to your portfolio, you can be protected against sudden drops in traditional investments.

Volatility

It’s impossible to talk about Bitcoin without talking about volatility. The price of this coin can and has swung wildly over the past few years. If you’re going to invest in Bitcoin in the UK, you need to have a strong stomach.

The good news for long term investors is that you can ignore short term price volatility. If you’re planning to buy Bitcoin and hold it for years to come, it doesn’t matter whether the price drops 5% one day or rises 10% the next. All that matters is that the price of Bitcoin rises over the full timespan of your investment.

However, you should know going in that Bitcoin is typically considered a high risk investment because of the coin’s price volatility.

Bitcoin vs Ethereum Investment

Bitcoin vs Ethereum investmentBitcoin isn’t the only cryptocurrency you can invest in. The blockchain technology that Bitcoin utilizes powers thousands of different digital coins, although few of them are as well-known or as widely used.

One competitor to Bitcoin that is well-known among UK investors is Ethereum, the second largest cryptocurrency by market cap. Ethereum is more than just a digital payments system like Bitcoin. It’s also a full-fledged operating system that enables anyone, anywhere in the world to manage financial transactions like loans, banking, and more.

Many Bitcoin investors in the UK also invest in Ethereum. The two coins are different enough that they represent completely independent investments.

However, if you can only buy one, we recommend investing in Bitcoin over Ethereum. That’s because Bitcoin is more widely accepted in mainstream financial circles. Money from institutional investors plays a big role in driving up the price of cryptocurrencies, and Bitcoin has a lot more support from central banks and other major financial players than Ethereum.

In addition, Ethereum has some tweaks to its blockchain technology that make it less appealing to investors. The currency can be controlled by a single group of investors, which means it is less trustworthy in the long run than a digital currency like Bitcoin.

How to Invest in Bitcoin UK

When it comes to how to invest in Bitcoin in the UK, you have options. The most common Bitcoin investment in the UK is simply to buy Bitcoin outright through a cryptocurrency exchange. If you use an exchange, you can set up a Bitcoin wallet and hold your currency securely until you want to spend it or sell it via Bitcoin transactions. Check out our reviews of the six best Bitcoin exchanges in the UK to find the one that’s best for your Bitcoin investment.

However, there are other ways to invest in Bitcoin. Many UK stock brokers offer exposure to this currency through Bitcoin investment trusts and Bitcoin investment funds. With a Bitcoin investment fund like the Grayscale Bitcoin Trust (GBTC), you can buy shares of the fund just like you would any other stock in the UK. The fund buys Bitcoin directly, so you get a Bitcoin investment without having to open a Bitcoin wallet.

The advantage to using a fund like GBTC is that it you can invest in it through tax-advantaged accounts like an ISA or SIPP. However, beware that a Bitcoin investment trust comes with an annual management fee. For the GBTC trust, you’ll pay 2% of your total investment per year towards the fund itself.

Most Bitcoin investment sites, by comparison, just charge a one-time spread when you buy Bitcoin and don’t have any recurring fees. So, if you don’t need to hold Bitcoin in a retirement account, we recommend using a Bitcoin exchange as opposed to a Bitcoin investment trust.

How to Invest in Bitcoin Stock

It’s also worth noting that you can invest in Bitcoin indirectly through the stock market. Companies that have exposure to the cryptocurrency market include computer chip makers like Nvidia and digital payments companies like PayPal and Square. Of course, keep in mind that there are many factors that affect the price of these shares and you lose out on the diversification benefit of a UK Bitcoin investment.

Bitcoin Investment Strategies

Investing in Bitcoin for the long term is relatively simple. You can just buy Bitcoin and hold it for a predetermined time horizon, such as 10 years.

However, adding some more complexity into your Bitcoin investment strategy can help you increase your profitability and reduce your investing risk.

One of the best ways to approach Bitcoin investing is to use pound-cost or dollar-cost averaging. Say you have £1,000 to invest in Bitcoin. Instead of investing all of it at once, you might invest £250 today and then an additional £250 over each of the next three months.Pound cost averaging Bitcoin

The advantage of this method is that the average price you paid for Bitcoin represents the currency’s average price over that four-month period. It reduces the chances that you put all your money into Bitcoin just as the price is hitting a new high before a pullback.

Another way to invest in Bitcoin is to scale in and out of your position. First, use pound-cost averaging to buy Bitcoin over a period of several weeks or months. As the price goes up, use fundamental and technical analysis to determine whether the price of Bitcoin might temporarily pull back. If you think it will, sell a portion – say, 25% or 50% – of your position. That locks in profits if you’re right about the pullback. But if you’re wrong, you’ll still reap some of the benefits of the continued price rise.

Over time, you can maintain your investment in Bitcoin by buying every time there’s a pullback. If you sold 50% of your position at the last peak, for example, buy back roughly that amount of Bitcoin at the next price trough. Remember to use pound-cost averaging when buying back into your Bitcoin position.

Best Bitcoin Investment UK Platforms Reviewed

Part of the key to Bitcoin investing is getting the best Bitcoin investment platform. The top Bitcoin investment sites minimize fees while offering actionable investing tools to help you monitor Bitcoin’s price movements and performance.

With that in mind, let’s take a closer look at three of the best UK Bitcoin investment platforms:

1. eToro – Low-cost Bitcoin Trading with a Social Network

etoro logoeToro is our top pick for UK investors looking to get into Bitcoin. This online Bitcoin exchange offers a very inexpensive fee structure that’s among the most favourable we’ve seen for UK traders. Every time you buy and sell Bitcoin, you pay just 0.75% per roundtrip trade. The cost is adjusted based on the price you sell Bitcoin for, so you’re never overcharged for a trade that doesn’t go your way.

Another benefit to eToro is that it offers a fairly wide range of trading and investing tools. You have access to technical price charts for Bitcoin that include over 100 technical indicators and drawing tools. On top of that, the platform allows you to modify your Bitcoin orders to place stop losses and take profit levels that can reduce your trading risk.

The platform also gives you insight into what analysts and other investors think about Bitcoin. eToro displays a range of price targets for Bitcoin from top global analysts. Plus, it leverages data from all the traders on its platform to offer a market sentiment score, which shows the proportion of people who are buying Bitcoin as opposed to selling it. The only thing missing from eToro as far as analysis goes is a depth-of-market chart, but this is more important for cryptocurrency traders than for long term investors in any case.

As well as Bitcoin, eToro offers a wide variety of altcoins, including Ethereum, Litecoin (LTC), Bitcoin Cash (BCH), and Ripple (XRP).

Bitcoin Market Sentiment on eToro

eToro is particularly good for beginner Bitcoin investors thanks to its social trading network. You can follow other traders on the platform and ask questions to learn more about how Bitcoin works and what drives its price movements. eToro also offers copy portfolios, so you can automatically mimic the positions of expert Bitcoin investors or build a diversified cryptocurrency portfolio in seconds.eToro Social Trading Network

eToro is regulated by the UK’s Financial Conduct Authority (FCA) and is considered to be highly trustworthy. In addition, the exchange offers customer support 24 hours a day, 5 days a week.

Pros

  • Fixed roundtrip spread for Bitcoin trades
  • Technical charts with 100+ indicators
  • Access to analyst research
  • Social network with copy portfolios
  • 24/5 customer support

Cons

  • No depth-of-market information
  • Inactivity fee after 12 months

Disclaimer: Your money is at risk.

2. Coinbase – Comprehensive Cryptocurrency Investment Platform

Coinbase LogoCoinbase is one of the most popular Bitcoin exchanges in the world, with over £19 billion in assets under management. It’s a particularly good option if you’re thinking about investing in cryptocurrency beyond just Bitcoin. The platform offers more than 3,000 digital coins.

The best thing about Coinbase for long term UK Bitcoin investors is the platform’s charting tools. Coinbase offers a user-friendly, yet highly advanced trading platform that includes robust technical charts with dozens of built-in studies. We also liked that you can monitor the Bitcoin order book and plot depth-of-market charts. While these are most useful for Bitcoin traders, they can also be helpful for pound-cost averaging as you buy into a Bitcoin position.Coinbase Pro

Coinbase also has some tools that are unique to investing in cryptocurrencies. For example, the platform offers a mobile Bitcoin wallet that you can use to monitor your investment. What’s nice about this is that you can also use the wallet to send Bitcoin to friends and merchants, allowing you to leverage your Bitcoin investment as a day to day spending account when needed.Coinbase Mobile Bitcoin Wallet

Coinbase isn’t as inexpensive for Bitcoin investing as a platform like eToro. The platform charges a fixed commission that varies based on the amount of Bitcoin you buy and sell. If you trade less than £7,400 per month, the commission is a somewhat pricey 0.50% per buy and 0.50% per sell. The upside is that Coinbase doesn’t charge any other account fees like an inactivity fee.

This exchange has gone to pains to prove that it can be trusted by UK investors. It holds a specialised e-money license from the FCA and supports Faster Payments for deposits and withdrawals. In addition, Coinbase support is available 12 hours a day, 5 days a week.

Pros

  • Invest in Bitcoin and 3,000+ other cryptos
  • Advanced trading platform with depth-of-market information
  • Free mobile Bitcoin wallets available
  • No inactivity fee for long term investing
  • Holds an e-money license from the FCA

Cons

  • Moderately expensive fee structure
  • Relatively little market analysis

Your money is at risk.

3. Binance – Most Advanced Bitcoin Trading Platform

Binance LogoIf you’re looking for a highly advanced Bitcoin investment platform, take a look at Binance. This cryptocurrency trading platform offers a wide variety of tools for experienced cryptocurrency investors, as well as over 3,000 digital coins to invest in.

To start, Binance has three different trading interfaces for different levels of investors. You can use the Basic view to buy and sell Bitcoin without much fuss, or use the Classic and Advanced platforms to access in-depth charts and analysis. Both charting interfaces support dozens of technical indicators and display Bitcoin order book, trade history, and depth-of-market information.Binance Bitcoin Trading Platform

Another thing that’s worth noting about Binance is that it allows you to trade Bitcoin with leverage up to 5:1. Most investors will want to avoid leverage since it comes with interest fees and overnight charges when holding extended positions. However, it can be useful if you’re planning a shorter-term investment in Bitcoin.

We’re also impressed by Binance’s research and education tools. The platform offers access to institutional-grade reports from top Bitcoin analysts. You can dive deep into Bitcoin’s history as well as find out more about how current market events will impact the price of this digital currency. Binance Academy, meanwhile, is filled with videos and explainers to help you navigate the cryptocurrency market.

Binance charges trading fees starting at 0.1%, which are incredibly low. However, the pricing scheme can be a little bit confusing as your Bitcoin investment fee will depend on your monthly trading volume and whether you hold Binance’s in-house cryptocurrency, BNB. The platform doesn’t charge any account fees that investors need to worry about and it offers 24/7 customer support.Binance Fee Structure

Pros

  • Over 3,000 cryptocurrencies available
  • Three different trading platforms
  • Invest in Bitcoin with leverage up to 5:1
  • Access to institutional-grade reports
  • Extremely low fees for buying and selling Bitcoin

Cons

  • More complex than other Bitcoin exchanges

Your money is at risk.

How to Invest in Bitcoin UK on eToro

Ready to make your first Bitcoin investment in the UK? We’ll show you how to get started with eToro, which offers low roundtrip spreads for Bitcoin trades and robust analysis tools.

Step 1: Create an Account

In order to buy Bitcoin with eToro, you’ll need to create an account. Head to the exchange’s homepage and click ‘Join Now,’ then enter a username and password and your email. You can also create an account using Google or Facebook.Create an eToro account

In order to comply with UK financial regulations, eToro requires you to verify your identity before you can start trading. To complete this step, just upload a copy of the photo page of your passport or your driver’s license, along with a copy of a recent utility bill or financial statement that shows your address.

Step 2: Deposit Funds

Next, you can deposit funds to your eToro trading account. eToro accepts a wide variety of payment methods, including UK bank account transfer, credit card, debit card, and e-wallet (such as Neteller and Skrill). Just keep in mind that eToro requires a minimum deposit of £140 when you first create an account.eToro deposit

Step 3: Buy Bitcoin

Now you’re ready to invest in Bitcoin with eToro. Search ‘BTC’ in the account dashboard and click ‘Trade’ when Bitcoin appears in the menu.

In the order form, enter how much money you want to invest in Bitcoin. You can select a stop loss level or take profit level for your trade if desired. Leverage is set at X1 since eToro does not allow you to trade Bitcoin outright with leverage.Buy Bitcoin on eToro

When you’re ready, click ‘Open Trade’ to complete your Bitcoin investment.

Conclusion

Investing in Bitcoin in the UK is a good way to diversify your investment portfolio and get in early on an asset that has the potential to transform the way the world uses money. While Bitcoin can be volatile, long term investors can largely ignore day-to-day fluctuations in the price of this coin and reap the benefits of price appreciation over the years to come.

Ready to open a Bitcoin investment? Click the link below to get started today!

eToro – Invest in Bitcoin in the UK Today

 

Your money is at risk.

FAQs

How safe is Bitcoin investment?

Bitcoin is a high risk investment. This currency is highly volatile and there are no physical assets backing the value of Bitcoin. However, you don’t have to worry about the technical aspects of investing in Bitcoin. Most major exchanges are highly regulated and Bitcoin is closely monitored by financial institutions.

How does Bitcoin investment work?

Investing in Bitcoin means buying this digital coin and holding it for the long term. You can buy and hold Bitcoin for months, years, or even decades. Investing in Bitcoin is easy if you use a cryptocurrency exchange or a UK stock broker that offers Bitcoin.

What payment methods can I use to invest in Bitcoin?

Most Bitcoin exchanges accept common payment methods like credit card, debit card, or bank transfer.

How do I sell Bitcoin?

If you want to sell Bitcoin to realize your investment gains, you can do so using the same broker or exchange that you used to buy Bitcoin in the first place. The selling process works just like the buying process, except you’ll enter a sell order instead of a buy order.

Is there a minimum Bitcoin investment?

Any minimum investment in Bitcoin will be set by your exchange or broker. Most UK Bitcoin exchanges require a minimum investment of £25.

Who created Bitcoin?

Bitcoin was created by Satoshi Nakamoto.

All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Michael Graw

About Michael Graw

Michael Graw is a freelance journalist based in Bellingham, Washington. He covers finance, trading, and technology. His work has been published on numerous high-profile websites that cover the intersection of markets, global news, and emerging tech. In addition to covering financial markets, Michael’s work focuses on science, the environment, and global change. He holds a Ph.D. in Oceanography from Oregon State University and worked with environmental non-profits across the US to bridge the gap between scientific research and coastal communities. Michael’s science journalism has been featured in high-profile online publications such as Salon and Pacific Standard as well as numerous print magazines over the course of his six-year career as a writer. He has also won accolades as a photographer and videographer for his work covering communities on both coasts of the US. Michael has been a member of the LearnBonds team since March 2020.