How to Buy Cryptocurrency in the UK
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Last Updated 16/11/2024
Explore our curated list of reputable exchanges for buying crypto, each rigorously tested with real funds. All brokers are accessible to traders in the United Kingdom.
To Buy Cryptocurrency in the UK, you'll need to:
Simply put, the easiest way to invest in cryptocurrency in the UK is through a crypto exchange like eToro, Coinbase, or Uphold. These platforms allow you to conveniently buy and sell crypto right from your smartphone, tablet, or computer.
Featured Platform - eToro
- Copy Trading
- User Friendly Platform
- Regulated & Trusted
- 30 Million+ Users
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
Crypto seems to be on the tip of everybody’s tonge at the moment after the bullish sentiment following the 2024 US election.
There are some do’s and don’t when it comes to crypto, that I will share here.
Fortunately buying cryptocurrencies is now simpler than ever.
I have designed this guide to provide a clear and practical approach to buying Crypto in the UK.
A Step-by-Step Guide on Investing in Cryptocurrency in the UK?
Step 1: Choose a Cryptocurrency Exchange
To start investing in cryptocurrency, the first step is choosing a cryptocurrency exchange. An exchange is a platform where you can buy, sell, and trade cryptocurrencies. Here’s what to look for in a reliable exchange:
- Security: Look for exchanges that have strong security measures like two-factor authentication (2FA) and cold storage for funds. This helps protect your assets from hacks.
- Fees: Different exchanges charge different fees for trading and withdrawing funds. Compare fees to find an exchange that offers good value for your transactions.
- User Experience: A user-friendly platform makes it easier to navigate and understand. Look for an exchange with a straightforward interface and good customer support.
Top UK-Friendly Exchanges:
- eToro: Best for beginners and social trading.
- Coinbase: Ideal for casual users with simple tools and strong security.
- Coinbase Advanced Trade: Suited for experienced traders with lower fees and advanced tools.
- Uphold: Great for fee-free trading with higher spreads and cross-asset options.
| Feature | eToro | Coinbase | Coinbase Advanced Trade | Uphold |
|---|---|---|---|---|
| Ease of Use | Beginner-friendly, social trading features | Simple interface, ideal for beginners | Advanced tools, suited for experienced traders | Straightforward, easy-to-navigate app |
| Fees | 1% trading fee | 1.49% transaction fee | Lower fees (0.4% maker, 0.6% taker) | 0% trading fee, but higher spreads |
| Funding Options | Bank transfer, debit/credit card | Bank transfer, debit/credit card, PayPal | Bank transfer, debit/credit card | Bank transfer, debit/credit card, Apple/Google Pay |
| Crypto Selection | 75+ cryptocurrencies | 240+ cryptocurrencies | 240+ cryptocurrencies | 200+ cryptocurrencies |
| Security | FCA-regulated, 2FA, cold storage | Insured funds, 2FA, cold storage | Insured funds, 2FA, cold storage | Strong security, but not FCA-regulated |
| Extras | CopyTrading, multi-asset platform | Educational tools, staking | Advanced charting, order types, lower fees | Multi-asset platform with cross-asset trades |
#1 eToro - Best in class for ease of use, multiple asset classes and quick sign up
eToro is a top choice for UK investors due to its simple sign-up process and intuitive platform. With FCA regulation and its unique CopyTrader feature, beginners can mimic experienced traders, while its built-in wallet provides added convenience for securely storing Ethereum.
Pros & Cons
- Pros: Easy to use, FCA-regulated, CopyTrader feature, beginner-friendly.
- Cons: Higher fees than advanced trading platforms.
What are the Fees?
eToro charges a 1% trading fee on crypto purchases and sales, with additional withdrawal fees (£5) and potential currency conversion charges for non-USD deposits.
What Cryptocurrencies are Available?
eToro offers over 75 cryptocurrencies, including popular options like Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Solana (SOL), and XRP (Ripple).
How Safe is the Exchange?
eToro ensures fund security with 2FA, cold storage, and FCA compliance. The platform also offers insurance coverage for assets in case of cyber breaches.
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
#2 Coinbase - The go-to platform for beginners
Coinbase’s clean interface and robust security features make it ideal for first-time Ethereum buyers. With over 240 cryptocurrencies, simple navigation, and educational tools, Coinbase is widely trusted in the crypto community.
Pros & Cons
- Cons: High transaction fees for smaller purchases.
- Pros: Beginner-friendly, strong security, wide asset range.
What are the Fees?
Coinbase’s standard platform charges a 1.49% transaction fee. For larger or more frequent trades, its Advanced Trade option offers lower fees starting at 0.4% (maker) and 0.6% (taker).
What Cryptocurrencies are Available?
Coinbase supports over 240 assets, including major cryptocurrencies like Bitcoin, Ethereum, Solana, Dogecoin, and Polkadot.
How Safe is the Exchange?
Coinbase employs 98% cold storage for digital assets, uses 2FA for account security, and complies with FCA regulations for UK investors, ensuring a secure trading environment.
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
#3 Best Wallet - Hot Wallet, Spot Intergration
Best Wallet stands out for its multi-asset versatility, offering Ethereum alongside a wide range of cryptocurrencies, fiat currencies, and digital assets. With a low minimum deposit requirement, Best Wallet caters to budget-conscious users while delivering a seamless and user-friendly platform for managing and trading Ethereum.
Pros & Cons
- Low Fees: Best Wallet offers some of the lowest fees, ensuring users can maximize their cryptocurrency value.
- Regulation Concerns: Not regulated by major financial authorities in some regions.
What are the Fees?
Best Wallet boasts some of the lowest fees in the industry, with no hidden charges for basic transactions and competitive rates for advanced features like staking or swaps.
What Cryptocurrencies are Available?
Best Wallet supports over 60 blockchains and thousands of tokens, including popular ones like Bitcoin, Ethereum, and Solana, ensuring users have access to a wide variety of assets.
How Safe is the Wallet?
Best Wallet implements advanced encryption, multi-signature technology, and cold storage solutions to protect user funds, making it one of the most secure wallets available.
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
Step 2: Register and Verify Your Identity
After selecting an exchange, you’ll need to create an account. This involves providing personal information and verifying your identity, a process known as KYC (Know Your Customer).
Why KYC is Important:
- Security: KYC helps prevent fraud and ensures that only legitimate users can use the exchange.
- Compliance: Exchanges are required to comply with regulations to prevent money laundering and other illegal activities.
How to Complete Registration and Verification:
- Sign Up: Visit the exchange’s website or app and click on ‘Sign Up.’
- Provide Information: Enter your name, email address, and create a password.
- Verify Identity: Upload a government-issued ID and possibly a selfie for identity verification.
- Set Up Security: Enable two-factor authentication (2FA) for added account security.
Step 3: Deposit Funds into Your Account
Once your account is set up and verified, you’ll need to deposit funds to start buying cryptocurrency.
How to Deposit GBP:
- Bank Transfer: Link your bank account to the exchange and transfer GBP. This method usually has lower fees but might take a few days.
- Credit/Debit Card: Some exchanges allow you to use a card to buy cryptocurrency instantly, but this may come with higher fees.
Potential Fees and Processing Times:
- Bank transfers may have lower fees but take longer (1-3 business days).
- Credit/debit card transactions are faster but may have higher fees (2-4% of the transaction).
Step 4: Placing Your First Order
Now that your account is funded, you can place your first order to buy cryptocurrency.
How to Place a Buy Order:
- Choose a Cryptocurrency: Select the cryptocurrency you want to buy (e.g., Bitcoin).
- Enter Amount: Decide how much you want to invest in GBP or the amount of cryptocurrency you want to buy.
- Select Order Type: Choose between a market order or a limit order.
- Confirm Purchase: Review the details and confirm your purchase.
Market vs. Limit Orders:
- Market Order: Buys the cryptocurrency immediately at the current market price. This is simple and quick.
- Limit Order: Allows you to set a specific price at which you want to buy. The order will only execute if the market reaches that price.
Step 5: Securing Your Investment in a Crypto Wallet
After purchasing cryptocurrency, it’s important to store it securely. This is where a crypto wallet comes in.
What is a Crypto Wallet? A crypto wallet is a tool that allows you to store, send, and receive cryptocurrencies. It stores your private keys, which are like passwords that give you access to your cryptocurrency.
For mor on the Best Crypto wallets click here.
Types of Wallets:
- Hot Wallets (Online): These are connected to the internet, such as exchange wallets and mobile apps. They’re convenient for quick access but are more vulnerable to hacks.
- Cold Wallets (Offline): Hardware wallets and paper wallets that are not connected to the internet. They provide enhanced security but are less convenient for frequent trading.
Should You Keep Your Crypto on an Exchange or in a Wallet?
You have two main options for storing your cryptocurrency: keeping it on the exchange or transferring it to a private wallet.
Keeping Crypto on an Exchange:
- Pros: Convenient for trading and easy access.
- Cons: More vulnerable to hacks since exchanges are common targets.
- Security Tip: If you keep crypto on an exchange, ensure you enable all available security features, like 2FA.
Transferring to a Private Wallet:
- Pros: Provides greater control and enhanced security, especially with a hardware wallet.
- Cons: Slightly less convenient since you need to manage your private keys.
- Security Tip: Always back up your wallet’s recovery phrase and store it in a safe place.
Summary Table: Exchange vs. Wallet Storage
Storage Option | Pros | Cons | Security Level |
Exchange | Easy access, convenient for trading | Higher risk of hacks | Moderate (with 2FA) |
Private Wallet | Greater control, enhanced security | Less convenient for frequent trades | High (especially with cold storage) |
By following these steps, you can start investing in cryptocurrency in the UK securely and efficiently.
How to Choose Which Crypto to Buy
Choosing the right cryptocurrencies to invest in requires careful research and a clear strategy. Here’s how to make an informed decision:
- Understand the Use Case: Evaluate the cryptocurrency’s purpose—payment system (Bitcoin), smart contracts (Ethereum), or privacy (Monero).
- Market Position: Check its market capitalisation, trading volume, and ranking on platforms like CoinMarketCap.
- Community and Development: Strong developer activity and an active community often indicate longevity.
- Roadmap and Goals: Review the project’s roadmap to ensure its vision aligns with emerging market needs.
- Diversify: Spread your investments across different types of coins to reduce risk.
What Are the Most Popular Crypto
While there are thousands of cryptocurrencies, a few dominate in terms of adoption and market capitalisation:
- Bitcoin (BTC): The first and most recognised cryptocurrency, often seen as digital gold.
- Ethereum (ETH): Powers smart contracts and DeFi applications, with strong developer support.
- Tether (USDT): A stablecoin pegged to the US Dollar, widely used for trading.
- Binance Coin (BNB): Fueling transactions on the Binance Smart Chain.
- Cardano (ADA): Focused on scalability and sustainability for blockchain projects.
What is Crypto
Cryptocurrency is a digital or virtual currency that uses cryptography for security. Unlike traditional currencies, cryptocurrencies operate on decentralised networks using blockchain technology, making them immune to centralised control.
- Decentralisation: No single authority governs the network.
- Peer-to-Peer Transactions: Direct transfers without intermediaries.
- Types: Payment tokens (Bitcoin), utility tokens (Ethereum), and stablecoins (Tether).
Cryptocurrencies are reshaping finance, offering a new way to store, transfer, and generate value globally.
What to Consider Before Investing in Crypto
Investing in cryptocurrency can be rewarding, but it comes with risks. Before diving in:
- Research Thoroughly: Understand the technology, use case, and team behind the cryptocurrency.
- Volatility: Be prepared for significant price fluctuations.
- Regulation: Ensure compliance with local laws and consider FCA-registered platforms.
- Long-Term Potential: Evaluate the coin’s roadmap, utility, and adoption prospects.
- Risk Tolerance: Only invest what you can afford to lose.
Is it Legal to Invest in Cryptocurrency in the UK?
Yes, investing in cryptocurrency is legal in the UK. Use FCA-registered platforms for added safety. While cryptocurrencies aren’t FSCS-protected, profits may be subject to Capital Gains Tax. Always follow regulations and ensure you understand the risks involved.
FAQs
As a beginner, it’s wise to start with a small amount of money that you can afford to lose. The cryptocurrency market is highly volatile, so investing a small sum helps you get familiar with the market dynamics without risking a significant portion of your savings.
- Start Small: Consider investing an amount that you’re comfortable with, such as £50 to £100. This allows you to learn about the process and market behaviour.
- Gradual Increase: As you gain more experience and confidence in your investment strategy, you can gradually increase your investment. Always do thorough research before putting more money into the market.
Cashing out your cryptocurrency means selling it for a traditional currency like GBP and withdrawing it to your bank account. Here’s how you can do it:
- Sell Your Cryptocurrency:
- Go to your exchange account where your cryptocurrency is stored.
- Navigate to the ‘Sell’ or ‘Trade’ section.
- Choose the cryptocurrency you want to sell and the amount.
- Select the currency you want to receive (e.g., GBP) and execute the sale.
- Withdraw Funds to Your Bank Account:
- After selling, your GBP balance will be available in your exchange account.
- Go to the ‘Withdraw’ section.
- Choose the bank transfer option and enter your bank account details.
- Confirm the withdrawal. Processing times may vary, but bank transfers usually take 1-3 business days.
Note: Be aware of withdrawal fees, which can vary depending on the exchange you use.
Yes, in the UK, profits from cryptocurrency investments are subject to capital gains tax (CGT). Here’s what you need to know:
- Capital Gains Tax: When you sell, trade, or exchange your cryptocurrency for a profit, it may be considered a taxable event. You will need to pay capital gains tax on the profit made.
- Allowances: Each individual has a capital gains tax allowance (£12,300 for the tax year 2023/24). If your total gains for the year are below this amount, you may not have to pay CGT.
- Income Tax: In some cases, if you receive cryptocurrency as payment for services or mining, it might be considered income and subject to income tax.
Importance of Keeping Accurate Records:
- Keep detailed records of all your cryptocurrency transactions, including dates, amounts, and the value in GBP at the time of each transaction.
- Accurate records are essential for calculating your gains or losses and ensuring compliance with HMRC regulations.
Table: Quick Tax Guide for Cryptocurrency
Tax Type | When It Applies | Allowance for 2023/24 |
Capital Gains Tax | Selling or trading crypto for a profit | £12,300 annual allowance |
Income Tax | Receiving crypto as payment or mining | Based on income tax brackets |
Make sure to consult with a tax professional or refer to HMRC guidelines for the most accurate and up-to-date information on cryptocurrency taxation in the UK.
Top 5 Exchanges
1
eToro
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
2
Coinbase
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
3
Best Wallet
Link toWebsite
4
Uphold
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
5
OKX
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
References:
At The Investors Centre, our writers/contributors are required to underpin their work with primary sources. These sources range from government records and white papers to direct reporting and expert interviews in the field. Where suitable, we also integrate research from other distinguished publishing sources. This approach ensures our content remains both accurate and unbiased, as detailed in our editorial guidelines.
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Our #1 Recommended Crypto Wallet & Exchange Platform in the UK
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.