How to Buy Bitcoin UK – Beginner’s Guide

Where to Buy Bitcoin & Find the Best Rates UK

Before we show you how to buy Bitcoin, you need to find the right broker or exchange. You can compare the best crypto brokers and exchanges, along with their fees and features, below. You can even change the investment amount and cryptocurrency you’re investing in to see how much each broker charges!

If you’re based in the UK and wish to buy Bitcoin – the process is now simple. All you need to do is find a good online broker that offers competitive fees, deposit some funds with a debit/credit card, and decide how much you wish to invest.

In fact, some platforms allow you to buy just $25 worth of Bitcoin – which is about £18. But, many people in the UK still haven’t invested in Bitcoin because they simply don’t understand how this innovative technology works.

As such, this guide on How to Buy Bitcoin UK will tell you everything you need to know. We’ll discuss which brokers you should consider using to buy Bitcoin, how a cryptocurrency investment works, and the steps required to get started with a purchase today.

How to Buy Bitcoin UK Today – Step by Step Guide

Looking to buy Bitcoin in the UK right now but have no idea where to start? If so, follow the simple step-by-step walkthrough outlined below.

Step 1: Open a Brokerage Account at eToro

You’ll first need to head over to the eToro website and open an account. This takes just a few minutes and simply requires some personal information.

eToro sign up

This includes your full name, date of birth, home address, and national insurance number. You’ll also need to supply your UK mobile number and email address.

Step 2: Download the eToro App

Although not compulsory, it’s also worth downloading the eToro trading app. In doing so, you’ll be able to buy and sell Bitcoin no matter where you are located – as long as you have an internet connection. The app can be downloaded for free from the eToro website and is compatible with both iOS and Android devices.

Step 3: Deposit Funds

Assuming you are not looking to deposit more than $2,250 (about £1,800) right now, you can upload your photo ID at a later date. As such, it’s now time to make a deposit. This needs to be at least $200 (about £160) and you can choose from a UK debit/credit card, e-wallet, or bank transfer.

Step 4: Search for Bitcoin

If you opted for an instant payment method like a debit/credit card or e-wallet, you can now buy Bitcoin at eToro. To go straight to the respective trading page, search for ‘Bitcoin’ and click on the top result that loads up.

Buy Bitcoin on eToro

On the next page, click on the ‘Trade’ button.

Step 5: Buy Bitcoin

You will now see an order form like the screenshot below. All you need to do here is enter the amount of Bitcoin that you want to buy. Make sure you meet the $25 minimum. You can invest any amount of your choosing above this figure.

Buy Bitcoin on eToro

Finally, click on the ‘Open Trade’ button to complete your commission-free Bitcoin investment. There is nothing more for you to do until you decide to cash your Bitcoin investment out. You can check the value of your Bitcoin investment any time you want by heading over to the ‘Portfolio’ section of your eToro dashboard.

What is Bitcoin?

Bitcoin (BTC) is a highly speculative asset class that many people in the United Kingdom still do not understand. As such, it is important that you first acquire a bit of background knowledge on what Bitcoin is before you make an investment.

  • In its most basic form, Bitcoin is a digital currency that was first launched in 2009.
  • The technology is was created by an unknown developer that goes by the name of Satoshi Nakamoto.
  • The main concept of this innovative cryptocurrency is that it is not owned or controlled by any single person, organization, government, or central bank.
  • On the contrary, it is decentralized.

This means that unlike traditional fiat currencies – like the British pound or US dollar – Bitcoin cannot be manipulated or printed. Instead, a new Bitcoin is created by code every 10 minutes.

This will incur continuously until the digital currency reaches 25 million Bitcoin – which is expected to happen in 2140. By holding Bitcoin, you can transfer your coins to another user. More and more places actually accept Bitcoin as a payment method, too.

However, the vast majority of people that buy Bitcoin in the UK do so as an investment vehicle. That is to say, they hope that the value of Bitcoin will increase over the course of time, and thus – they cash out at a much higher price.

Why Buy Bitcoin?

As we noted above, the vast bulk of people buy Bitcoin in the UK as an investment. Make no mistake about it – it is a high-risk investment at that, not least because the price of Bitcoin is super-volatile.

Nevertheless, let’s explore some of the specific reasons why you might want to buy Bitcoin in the UK right now.

Note: Although you can easily buy Bitcoin in British pounds, the value of the cryptocurrency is usually discussed in US dollars. 

Bitcoin is Growing Faster Than Any Other Asset Class

First and foremost, you might be here reading this guide because you’ve heard about the speed at which the price of Bitcoin has been growing recently. Before we get to that, we should make it clear that back in 2009 – Bitcoin was worth just a fraction of $0.01.

Fast forward to late 2017 and Bitcoin reached all-time highs of just under $20,000. Although the cryptocurrency then went on a poor run of form that lasted a couple of years (hitting lows of $4,000-ish), Bitcoin once again breached $19,500 in November 2020.

bitcoin price since 2013

To put that into perspective, this means that had you invest just £100 back in 2009, your investment would now be worth over £195 million! While you might have missed the boat to buy Bitcoin for a few cents, the cryptocurrency is still performing far better than most asset classes right now.

For example, had you bought Bitcoin in March 2020 – you would have paid around $5,000. This means that in the 8 months to follow Bitcoin has increased in value by over 290%. In comparison, the FTSE 100 is worth less now than it was five years ago. Crucially, this is why people in the UK are looking to buy Bitcoin in their droves.

The Supply of Bitcoin is Limited and Cannot be Manipulated

An additional factor that many newbie investors in the UK are unaware of is that Bitcoin is a finite asset class like gold. As noted earlier, this is because there will only ever be 21 million Bitcoin in circulation. In theory, this means that over the course of time, the value of Bitcoin should continue to rise indefinitely.

Of course, this is based on a lot of core assumptions – notably, that Bitcoin is a phenomenon that is here to stay in the long run. But, if it is, then its finite characteristics are attractive to a lot of investors.

how does bitcoin work uk

For example, when the Bank of England decides to print more money, this devalues the British pound. As Bitcoin is decentralized and not controlled by any single party, creating more coins than the underlying code allows is not possible.

Similarly, when you invest in stocks, the respective company has the ability to issue new shares. When it does, this dilutes your investment, as there are more shareholders in circulation. Once again, this isn’t possible with Bitcoin and its underlying blockchain technology.

Bitcoin can be Fractionized – So you can Invest Small Amounts

The price of a single Bitcoin now runs into the thousands of dollars. For example, when it recently hit $19,500 – that amounts to about £14,500. Now, it’s highly unlikely that you are going to want to invest this much to own a single digital currency. The good news, however, is that you don’t need to.

On the contrary, as Bitcoin is a digital currency it can easily be ‘fractionalized’. In plain English, this means that you can buy a fraction of 1 Bitcoin. In fact, Bitcoin can be broken down to 0.00000001 – meaning a $19,500 coin turns into just a few cents.

However, the minimum amount of Bitcoin that you can buy in the UK will be dependent on your choice of brokerage site. FCA-regulated eToro, for example, allows you to invest just $25. This is crucial, as Bitcoin is speculative and volatile – so you’ll likely want to start off with smaller amounts before you understand how things work.

You are in Full Control of Your Bitcoin Investment

bitcoin logoWe also find that a lot of bitcoin buyers enter the market because of philosophical reasons. That is to say, when you buy Bitcoin in the UK, you will own the digital currency 100% outright.

In fact, if you decide to withdraw the coins out of your chosen broker and into a private bitcoin wallet, nobody other than you will ever have access.

This is because you will be the only person that has control of your private keys. This is like a secret password that not only gives you access to your Bitcoin funds but allows you to transfer it to another wallet.

This is in stark contrast to how a traditional currency works – as you are always required to entrust a bank to look after your money. The bank in question has full control over the funds – meaning that they have the capacity to restrict access. As long as you store your Bitcoin safely, nobody will ever be able to touch your coins without your say so.

How Much Does it Cost to Buy a Bitcoin?

Like any other asset class such as stocks and shares – the price of Bitcoin is determined by market forces. Put simply, ever-changing demand and supply results in Bitcoin going up and down in price on a second-by-second basis.

As such, when there is a lot of positivity and good feeling surrounding Bitcoin, there will be more buyers in the market. In turn, this increased demand will see the price of Bitcoin increase. And of course, if the opposite happens, Bitcoin will go down in price.

bitcoin price now

In terms of how much it will cost you to buy 1 Bitcoin, your chosen broker will likely price this is US dollars. For example, at the time of writing in late 2020, eToro is quoting $19,447 per Bitcoin. This translates into £14,767 based on current GBP/USD exchange rates.

However, and as we noted earlier, you only need to invest $25 at eToro. This means that you are buying just over 0.12% of a single Bitcoin. As such, were Bitcoin to increase by 10% – your $25 investment would be worth $27.50.

How to Buy Bitcoin with PayPal

A lot of investors in the UK seek to buy Bitcoin with Paypal. This is because Paypal is a really simple, safe, and convenient way of making purchases in the online space that offers faster payments than bank transfers and debit cards. Very few brokers in the UK actually allow you to use e-wallets to make an investment. Instead, they typically focus on debit cards and bank transfers.

With that said, FCA-regulated trading platform eToro not only supports Paypal deposits and withdrawals but Skrill and Neteller too. All you need to do is meet a $200 minimum deposit (about £160) and then decide how much Bitcoin you want to buy (minimum $25).

How to Buy Bitcoin Stock

Bitcoin is a decentralized digital currency, meaning that it is a completely different kettle of fish to traditional stocks. However, the underlying principles remain the same. For example, Bitcoin is listed on third-party crypto exchanges – much like stocks are. Similarly, the price of both stocks and Bitcoin is based on demand and supply and this – will rise and fall.

Buying Bitcoin Safely

bitcoin fca safeOver the past few years, there have been many, many Bitcoin scandals. Whether that’s cryptocurrency exchanges getting hacked for millions of dollars worth of coins or Bitcoin-related Ponzi Schemes, a small minority of this industry are nothing short of unsavory.

With this in mind, it is absolutely fundamental that you know how to buy Bitcoin in the UK safely. In fact, we would go one step further by ensuring that you only use a regulated platform.

For example, eToro is licensed by the UK’s Financial Conduct Authority, as well as regulators in Australia and Cyprus. This means that you can rest assured that the platform allows you to buy and sell Bitcoin in a safe and secure environment. For example, you can use your debit/credit card or e-wallet and not worry about your sensitive financial details getting into the wrong hands.

At the other end of the spectrum, the majority of Bitcoin brokers and exchanges operate without a license. This means that you are putting your hard-earned funds at risk. As such, how to buy Bitcoin safely can only be achieved via a regulated platform.

Risks of Buying Bitcoin

As is the case with any investment that you make – there are several risks of buying Bitcoin that you need to be made aware of.

This includes:

Risk of Financial Loss

When you buy Bitcoin in the UK, you will be doing so because you think the value of the digital currency will rise. If it does, you make a financial return. However, things don’t always go to plan when we invest in the financial markets. As we noted earlier, the FTSE 100 is worth less today than it was five years ago.

UK banking stocks are in even greater dire straights, with the likes of HSBC worth 62% less than 18 years ago! When it comes to Bitcoin, this digital currency has generated obscene financial returns over the past 10 years.

However, there is no guarantee that this will be the case moving forward. After all, past performance is never a 100% indicator of future results. Taking this into account, if you end up selling your Bitcoin for less than you originally paid, then you will make a financial loss.

Regulatory Future of Bitcoin is Unknown

Other than a few exceptions, Bitcoin is still not regulated in most countries around the world – including the UK. Various bodies have released guidance on the digital currency – such as HMRC.

However, if and when the UK does eventually enact cryptocurrency-specific legislation, it remains to be seen whether this will embrace or hinder the future of Bitcoin.

For example, the FCA itself recently announced that from January 2021, cryptocurrency CFDs will no longer be permitted in the UK. The FCA said that this was due to the speculated and high-risk nature of cryptocurrencies and thus – the ruling was installed to protected UK retail clients.

Theft or Loss of Bitcoin

We mentioned earlier that a lot of people buy Bitcoin in the UK because they like the thought of owning an asset outright without needing to entrust their funds with a third-party. In order to achieve this, you would need to store the coins yourself in a private digital wallet.

However, the main risk that this presents is that were the wallet to be remotely hacked by a bad actor, your Bitcoin would be stolen. If this did happen, then your Bitcoin would be gone forever. After all, it’s not like you can call your bank to ask them to reimburse the funds.

Additionally, if you were to lose your wallet private keys or passphrase, it would be virtually impossible to regain access to your funds. Once again, this would mean that your Bitcoin would be gone forever.

Selling Bitcoin

When you eventually get around to cashing your Bitcoin out, the process will vary depending on how you bought it and how you are storing it.

For example, if you made the Bitcoin purchase at eToro, the process would look like the following:

  • You buy £500 worth of Bitcoin at eToro with a UK debit card
  • The Bitcoin is held by eToro on your behalf
  • A few years later you sell the Bitcoin when it is worth £2,000
  • You instruct eToro to sell the Bitcoin – which is executed at the click of a button
  • The £2,000 proceeds are added to your eToro cash balance, which you can then withdraw back to your debit card

However, if you used a traditional cryptocurrency exchange to buy Bitcoin, the cash out process would look like this:

  • Once you purchase the Bitcoin, you withdraw the coins to a private wallet
  • You opt for a desktop wallet – meaning it is stored on your laptop
  • When you decide to sell your Bitcoin, you need to transfer the coins back to the exchange
  • You then need to convert Bitcoin back to pounds
  • Finally, you transfer the proceeds back to your bank account

As you can see from the above, it’s far easier to use an FCA-regulated broker like eToro. In doing so, you don’t need to worry about storing the Bitcoin in a private wallet. And of course – this means that you cash your Bitcoin investment out instantly whenever you see fit.

Where to Buy Bitcoin in the UK

So now that we have covered the ins and outs of how this digital currency works, we now need to discuss where to buy Bitcoin. We have narrowed our list of platforms down to just three, which you will find below.

1. eToro – Overall Best FCA Broker to Buy Bitcoin in the UK

etoro logoeToro is by far the best option when it comes to buying Bitcoin in the UK. First and foremost, you will be using a heavily regulated brokerage firm. It holds licenses with three key bodies – including the FCA, ASIC, and CySEC. eToro has since attracted over 13 million investors, so this in itself gives the platform credibility.

In terms of fees, we haven’t come across a more competitive Bitcoin broker than eToro. This is because you can buy Bitcoin in the UK without paying a single penny in commission. Instead, the broker makes its money by charging a small 0.5% FX when you make a deposit. Before we get to funding, we should note that eToro allows you to invest from just $25 into Bitcoin.

eToro Bitcoin Price Chart

This is crucial, as it allows you to invest small, but regular amounts. If you want to diversify into other cryptocurrency trading markets, eToro offers 15 altcoins. This includes the likes of Ethereum, Ripple, and Bitcoin Cash. Outside of cryptocurrencies, you can also invest in over 1,700+ stocks and 150+ ETFs. CFD trading is also offered, but as per new FCA rules, this won’t be available on Bitcoin from January 2021.

Nevertheless, eToro is also the stand-out platform if you are a complete crypto-newbie. This is because it is simple to use and requires no prior investment knowledge. All you need to do is search for Bitcoin and enter the amount you wish to invest. Additionally, eToro offers automated trading services which are also great for beginners. For example, it offers a cryptocurrency CopyPortfolio  – which is professionally managed.

etoro crypto copyportfolios

You can also use the Copy Trading feature to mirror an expert Bitcoin investor. In doing so, you will copy their trades like-for-like. In terms of getting started, eToro requires a minimum deposit of $200. You can meet this requirement with a UK debit/credit card, e-wallet, or bank transfer. Finally, you can buy Bitcoin at eToro via its website or through the platform’s investment app.

Pros

  • Offers Bitcoin and 15 other top cryptocurrencies
  • Buy Bitcoin 100% commission-free
  • More than 13 million people using the platform
  • Accepts debit/credit cards, e-wallets, and bank transfers
  • Minimum investment of just $25
  • Supports copy trading to automate your Bitcoin trades
  • Fully regulated in the UK by the FCA
  • Over 1,700 stocks and 150+ ETFs

Cons

  • Small withdrawal fee  of $5
  • Platform operates in US dollars

Cryptoassets are highly volatile unregulated investment products. No EU investor protection.

2. Coinbase – User-Friendly Bitcoin Broker With Over 35 Million Customers

coinbase logoWhen it comes to reputation, Coinbase is potentially the best-known cryptocurrency broker in the space. Launched in 2012, this broker has since attracted over 35 million customers from over 100 countries. The platform holds an Authorized Payment License in the UK, meaning that it is regulated by the FCA.

As such, you should have no concerns about buying Bitcoin at Coinbase. In particular, and much like eToro, Coinbase is a good choice if you are looking for a super user-friendly platform to buy Bitcoin. This is because the end-to-end purchase process should take no more than 15 minutes and it requires no knowledge of how investments work.

Coinbase Bitcoin Exchange

You can also get started with small amounts – with minimums depending on your choice of payment method. Supported options include a debit card and UK bank transfer. However, the main drawback of choosing Coinbase is that it is one of the most costly ways to buy Bitcoin.

For example, while eToro charges just 0.5% on deposits, Coinbase will take a 3.99% commission on debit card payments. Then, when it comes to trading commissions, Coinbase charges 1.49%. At eToro, you’ll pay no commission at all. In terms of security, Coinbase operates institutional-grade systems.

coinbase uk review

At the forefront of this is that 98% of its coins are held in cold storage. This means that they cannot be hacked by an external actor, largely because the coins are never connected to a live server. Finally, we should note that unlike eToro, Coinbase does give you the option of withdrawing your Bitcoin to a private wallet.

Pros

  • Over 35 million customers and a great reputation
  • Very user-friendly
  • Deposit funds with a debit card or via bank transfer
  • Ability to withdraw your coins out to a private wallet
  • Handy mobile app
  • Holds a license from the FCA

Cons

  • 3.99% fee on debit card deposits
  • 1.49% Bitcoin trading fee

Your money is at risk.

3. Binance – Popular Bitcoin Exchange That Supports UK Debit/Credit Cards

Binance LogoBinance is now one of the largest cryptocurrency exchanges in terms of trading volume. The platform is mainly focused on trading services – meaning that you will be buying and selling digital currency pairs on a short-term basis. It is also involved in more complex financial products like Bitcoin futures and options.

However, Binance has since expanded into traditional brokerage services. This means that you can buy Bitcoin in the UK on the platform with your debit/credit card or bank account. All you need to do is open an account, upload some ID, and decide how much you wish to deposit.

binance buy bitcoin uk

Once you have completed the purchase, you can either leave the coins at Binance or withdraw them. Binance is well-known for its top-notch security controls, and it even has a Secure Assets Fund for Users (SAFU). This operates like a contingency reserve pot in the event that the platform encountered a hack. In other words, the funds would be used to reimburse those affected.

When it comes to fees, the trading side of Binance is very competitive. This is because you will pay a commission of just 0.1% per slide. However, using your debit/credit card will come at a much higher fee. Ordinarily, this stands at a transaction fee of 2%. But, Binance is currently running a promotion that reduced this to 1%. This covers all deposits made with Visa and MasterCard.

Pros

  • Largest cryptocurrency exchange in terms of trading volume
  • Hundreds of cryptocurrency pairs supported
  • Trading commission of just 0.1%
  • Supports UK debit/credit cards and bank transfers
  • Great reputation in the cryptocurrency scene
  • Ideal for advanced traders that seek sophisticated tools and features

Cons

  • Not great for newbie investors
  • Standard charge of 2% on debit/credit card deposits

Your money is at risk.

Conclusion

Although you might not understand the fine intricacies of cryptocurrencies – the actual process of buying Bitcoin in the UK has never been easier.

In fact, opening a broker account, depositing funds with a UK debit/credit card, and investing in Bitcoin should take you no more than 10 minutes when using eToro.

Best of all, this popular FCA broker charges no commissions when you buy Bitcoin in the UK – and you can cash out your investment whenever you want.

eToro – Best Broker to Buy Bitcoin in the UK

 

Cryptoassets are highly volatile unregulated investment products. No EU investor protection.

FAQs

What Can You Buy with Bitcoin?

Most people in the UK buy Bitcoin as an investment vehicle. In other words, it's a speculative investment that they hope to make a profit from. With that said, Bitcoin is a digital currency that allows you to send and receive funds. As such, if you find an online merchant that accepts Bitcoin, you can easily make a purchase.

How can I buy Bitcoin anonymously?

The days of buying Bitcoin in the UK anonymously are slowly but surely coming to an end. This is to counter the threat of money laundering. The only way that you might be able to do it is to purchase Bitcoin directly from another user. This does, of course, come with its own risks - as you won't be using a regulated broker.

Can you buy Bitcoin in the UK with pounds?

Yes, you can, but your chosen broker is likely to perform an FX exchange. This is because the de-facto currency that Bitcoin is priced against is the US dollar. This shouldn't be a problem as UK Bitcoin brokers allowed you to deposit funds with your debit/credit card or bank account.

What is the UK Bitcoin minimum investment?

The minimum Bitcoin investment in the UK will be determined by your chosen broker. For example, at eToro, this stands at just $25 (about £18).

How do you sell Bitcoin in the UK?

Selling Bitcoin works in the same way as buying it - but in reverse. For example, if you keep the coins at your chosen broker, you simply need to execute a sell order. Once you do, the proceeds will be added to your cash balance, which you can then withdraw out.

Where is the best place to buy Bitcoin?

We think the best place to buy Bitcoin is eToro due to its low fees and FCA licence. Other popular platforms include Coinbase, Binance, LocalBitcoins, CEX, Coinfloor, Coinmama, Kraken, Bittylicious and Bitstamp.

Kane Pepi

About Kane Pepi PRO INVESTOR

Kane Pepi is a British researcher and writer that specializes in finance, financial crime, and blockchain technology. Now based in Malta, Kane writes for a number of platforms in the online domain. In particular, Kane is skilled at explaining complex financial subjects in a user-friendly manner. Academically, Kane holds a Bachelor’s Degree in Finance, a Master’s Degree in Financial Crime, and he is currently engaged in a Doctorate Degree researching the money laundering threats of the blockchain economy. Kane is also behind peer-reviewed publications - which includes an in-depth study into the relationship between money laundering and UK bookmakers. You will also find Kane’s material at websites such as MoneyCheck, the Motley Fool, InsideBitcoins, Blockonomi, Learnbonds, and the Malta Association of Compliance Officers.

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