Buying cryptocurrencies in the U.K. has never been easier. Whether you want to get started cryptocurrency investing, speculate on market moves or participate in crypto gambling, you can access plenty of websites and cryptocurrency resources now available in the U.K. Digital currencies could help grow your portfolio, but how does a cryptocurrency exchange work in the UK? Are virtual currencies scams, and can crypto exchanges make it easier to diversify your investments? Read on for the answers to these questions and many more.
Even though the U.K. cryptocurrency market lags behind other more vibrant markets, investing and trading in the U.K. is a lot less complicated than you might think. This gives you a significant number of options if you want to actively trade digital assets or buy them for investment and spending purposes.
Interest in actively trading, gambling and investing in cryptocurrencies (or other financial assets) has skyrocketed in the U.K. since 2016 when the start of the rally in Bitcoin — considered by many the best cryptocurrency to trade — made fortunes for those who bought into them early.
The subsequent crash in the crypto market was painful but, more importantly, it was an incredible opportunity for those with the patience and vision to profit from the incredible 2021-2022 bull run. Bitcoin is down again from its all-time highs but things are looking up for now at least. The cryptocurrency market generally has extremely high volatility. It’s important to learn how to trade cryptocurrencies before taking high risks on them, ideally by trading in a demo account first.
How to Buy Cryptocurrency in the UK
First, you must have a source for coins and tokens. The U.K. hosts many cryptocurrency exchanges, cryptocurrency gambling firms and online brokerages that specialize in cryptocurrency transactions. OKX, Uphold and Coinmama are all superb options for all kinds of investors. Before you start trading cryptos, however, you may want to pick up a crypto wallet. You can go for a less-secure type of wallet - a software wallet - that is usually free and easy-to-use like Exodus Wallet. If you want to make sure your cryptos are safe from hackers and all kinds of cyberattacks you should look into getting a hardware wallet. Hardware wallets like Ledgers are physical devices that don't connect to the internet, keeping them safe from cyberattacks.
Also available to U.K. traders are cryptocurrency ATMs, machines where you can easily buy a variety of coins and tokens for cash. These ATMs are rarely the best choice, however, as they usually charge hefty fees.
Another option involves locally sourcing cryptocurrencies made available through sites such as localbitcoins.com, which publishes bids and offers of buyers and sellers in your area. U.K. investors, traders and speculators have much to gain from the cryptocurrency market, especially since taxation laws in the U.K. do not require you to pay capital gains taxes on your profits.
On the other hand, if you just want to purchase cryptocurrencies as an investment and subsequently sell them at a profit once they appreciate, capital gains taxes must be paid. Decide whether you want to invest or trade cryptocurrencies to know what approach to take.
If you decide to trade them, then you do not have to take possession of them or get a wallet since you will be trading derivatives known as cryptocurrency CFDs. This can be done by opening an online brokerage account with a broker.
Trading cryptocurrency CFDs versus trading the actual coins gives you the advantage of leverage. Because so many financial products intersect with crypto, the blockchain connects easily with foreign currency after foreign currency. When you deal directly with a cryptocurrency asset, you have to pay in full for each unit. When you trade CFDs through some online brokerages, you can take advantage of leverage that can be as high as 300:1. Here’s a step-by-step outline for buying cryptocurrencies in the U.K.
- Open an account at a cryptocurrency exchange.
The most common way to acquire cryptocurrencies is to open an account at a cryptocurrency exchange. The U.K. hosts a number of excellent cryptocurrency exchanges, in addition to cryptocurrency gambling and spread-betting brokers that offer cryptocurrencies for sale, or you can bet on the movement of a cryptocurrency pair such as GBP/BTC. 3 of the best cryptocurrency exchanges available today are OKX, Uphold and Coinmama.
- Get a cryptocurrency wallet (optional).
To retain full control of your cryptocurrencies, you must withdraw them from their source, be it an exchange, peer-to-peer group or ATM, to a personal crypto wallet and then protect your wallet’s private key.
The wallet notifies the crypto exchange or another source that you wish to send and receive transactions. Crypto wallets work sort of like an email account, with two keys: a public key and a private key, which serve as the equivalent of your public email address and private password. You can give out your public key freely to receive gifts and payments.
The private key, which must be kept confidential, acts like your wallet’s password. Wallets can be installed on your desktop computer, laptop or tablet, as well as on an Android or iOS smartphone. Another type of wallet that does not require a download is a web-based wallet. This wallet type gives you access to your cryptocurrencies and other digital assets anywhere you can get an internet connection.
For added security, a hardware wallet can be used instead that consists of a peripheral device which plugs into a computer like a USB memory stick. Once you have acquired a wallet, you should back up your wallet by saving it to a USB drive or on printed paper and then store it in a safe place. This type of “cold storage” has drawbacks, however. You run the risk of losing your USB drive or the paper wallet.
- Withdraw BTC to your cryptocurrency wallet.
After buying your bitcoins on an exchange or another source, you may withdraw the currency to your personal bitcoin or multi-currency wallet with a QR code. Leaving your bitcoins with an exchange can be risky since exchanges can get hacked, and you do not have control of your private keys.
In other words, unless your cryptocurrency is in your personal possession, it will generally be subject to theft by hacking. It makes sense to store your bitcoins in a wallet with your own private key. After you have successfully withdrawn your currency from the exchange, you have successfully purchased cryptocurrency.
Tip From A Pro
We’ve got top forex & crypto trader Ezekiel Chew, who makes 6 figures a trade and trains the bank traders behind the scenes, to share with us about crypto trading and what exactly it takes to be successful in investing in crypto.
Ezekiel believes there are three key aspects to successful crypto investing:
1. Don’t enter based on hear says. There are many people touting different coins. Do your analysis first before jumping on a hear say. New coins are popping up everyday, don’t risk your entire savings on a small coin because a lot of them are going to burst. Have a diversified portfolio if you want to dabble into the small alternate coins.
2. Read the market. The crypto market moves in cycles. It has always been that way and so do other markets. Learn and read up on the stage the current cycle you are at when you are investing into crypto. This is to prevent you from the possibility of getting in at the top before the big drop.
3. Have a plan. It’s easy to be overwhelmed by the profits that crypto is going to give you when the coin pumps. You need to have an exit plan, a target. Follow that plan and stick to it. You may not be able to catch the coin and get out at the highest point. But you certainly don’t want to get out when the market dips and it’s too late.
Most of all, Ezekiel has a famous trading mantra – “Win big, lose small” that he and his students abide by.
“Trading is all about having an edge in the game and knowing the mathematical probability behind each trade”. By winning big and losing small, a single win can potentially cover 3 or more losses. If you apply this methodology in the long run, you will be a winning trader.
To learn more about Ezekiel’s method of trading backed by mathematical probability, you can check out his one core program.
Crypto Exchanges in the UK
- Best for Active and Global Traders: Interactive Brokers
- Best for Inexperienced Traders: CoinJar
- Best for a Fast Trading Experience: Uphold
Now that you know how to buy crypto in the UK, you can use these exchanges to access the crypto market. Remember, too, to place your assets in a digital wallet or hardware wallet for their protection.
Best for Active and Global Traders: Interactive Brokers
Interactive Brokers offers crypto trading opportunities and much more for the active or beginning investor. You can save money with no added spreads, no markups and commissions that help keep money in your pocket. You can choose from a healthy range of crypto assets and others like stocks, bonds, futures and more. This is a holistic site that can help you access any market, especially crypto, which can be confusing for novices.
- IBKR is cheaper and simpler than most of the competition
- You can buy into practically any asset you like
- This may not be the right place for new traders to invest
Best for Inexperienced Traders: CoinJar
- Best For:Inexperienced Traderssecurely through CoinJar's website
**Disclaimer: 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.
CoinJar allows you to get into digital asset management without investing in a platform that’s too complicated. The platform is quite intuitive, allows you to learn and keep fees as low as possible.
- This is a good place to move your crypto assets when you need a home base
- You can pay less and start investing more in crypto
- People with large portfolios or clients may want to look elsewhere
Best for a Fast Trading Experience: Uphold
- Best For:A Fast Trading Experiencesecurely through Uphold Crypto's website
Terms Apply. Cryptoassets are highly volatile. Your capital is at risk.
Uphold is one of the top cryptocurrency exchanges in the world with an incredible variety of supported cryptocurrencies. It also offers precious metals and forex trading with special trading pairs like Gold/Bitcoin which lets you trade directly between gold and Bitcoin without having to swap to a fiat currency first. It also offers fractional stock trading, but this feature isn't available for U.S. and U.K. users due to regulatory constraints.
The ease-of-use of Uphold is pretty much unmatched in the crypto market. The account set up process is extremely quick and there are no withdrawal or deposit fees for most regions and payment methods. You can also easily stake your cryptocurrencies right after you buy them on the Uphold platform. It even offers higher crypto staking interest rates than most of its competitors.
- Investing in Bitcoin through a platform that offers more options can make your portfolio that much easier to build
- The lack of withdrawal and deposit fees makes this platform much easier to use
- There are certain restrictions that could impact particular traders
If you want to purchase cryptocurrencies without opening an account at a cryptocurrency exchange, you can use one of the 213 bitcoin ATM installations in the U.K.
In London alone, a total of 134 bitcoin ATMs offer Bitcoin (BTC), Bitcoin Cash (BTH), Ethereum (ETH), Dash (DASH), Litecoin (LTC), Zcash (ZEC), Monero (XMR) and Dogecoin (DOGE). To use an ATM for buying bitcoins with cash you must enter a mobile number, then receive a validation code and enter it at the ATM.
You then select the cryptocurrency you wish to buy and choose whether you already have a Bitcoin wallet. If not, a new paper wallet is generated. You must scan the QR code on your wallet and then insert the cash bills to pay for it.
Crypto Wallet Options
You can select a hardware or software wallet to store your cryptocurriences.
Ledger Nano S
Among the most popular hardware wallets, Ledger Nano S supports over 1,000 different cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), Ripple (XRP) and all ERC-20 tokens. The wallet was designed around a chip similar to the ones used in credit cards and passports and protects your assets with a PIN code.
bit2Me allows you to manage your cryptocurrencies and traditional currency in one place — think of bit2me like a bank that loves cryptocurrency. You can purchase cryptocurrencies, deposit cash and use a Mastercard Crypto Debit Card for purchases. bit2me also allows you to secure custody of blockchain assets, exchange cryptocurrencies, accept cryptocurrency as a business owner and/or find locations that accept cryptocurrency as legal tender.
The Coinomi mobile and desktop wallet offers a single platform with more than 500 cryptocurrency wallets and tokens. The wallet provides native support for as many as 125 blockchains plus 382 tokens for a total of 507 digital assets. The advantage of this wallet consists of its ability to exchange cryptocurrencies at no cost.
With Bitcoin ATMs, cryptocurrency exchanges and with an active local peer-to-peer market, buying cryptocurrencies in the U.K. is much easier than in many other parts of the world. In addition, many online brokers either have their base in the U.K., or they can easily be accessed by U.K. residents via online trading platforms.
Knowing how you intend to approach the cryptocurrency market — whether as a speculator, gambler or investor — will determine whether your best option will involve opening a brokerage account, placing a wager with a cryptocurrency gambling firm or buying a wallet and opening an account at a crypto exchange.
Frequently Asked Questions
Is buying cryptocurrency in the U.K. illegal?
The Financial Conduct Authority (FCA) banned the sale of cryptocurrencies on January 6.
How can I buy cryptocurrencies in the U.K.?
The best approach is to use an overseas digital currency exchange such as Coinbase, Luno or CoinJar.
Related content: FOREX TRADING IN THE UK
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