How to Buy Cryptocurrency in the UK

Contributor, Benzinga

Looking for an all-in-one solution for buying, selling and using crypto? CoinSmart let’s you buy cryptocurrency in the U.K!

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.

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 cryptocurrencies or buy them for investment and spending purposes.

Interest in actively trading, gambling and investing in cryptocurrencies 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 may be another opportunity for those with the patience and vision to profit from the next bull move. 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, as well as a personal wallet to withdraw them from that source. The U.K. hosts many cryptocurrency exchanges, cryptocurrency gambling firms and online brokerages that specialize in cryptocurrency transactions.

Also available to U.K. traders are cryptocurrency ATMs, machines where you can easily buy a variety of coins and tokens for cash.

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. 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.

  1. 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 gamble on the movement of a cryptocurrency pair such as GBP/BTC.

  2. 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.

  3. Withdraw BTC to your 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.

Best For
Crypto + Forex Courses

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

Here are some options for you to consider.

CoinSmart

CoinSmart is on a mission to make cryptocurrencies like Bitcoin, Ethereum, and altcoins like Doge and Solana easily accessible to everyone. With a crypto trading platform designed to break down the barriers of complex and confusing crypto transactions, CoinSmart offers simplicity, learning tools for all levels, as well as 24/7 omni-channel support. 

CoinSmart is a regulated, Canadian-headquartered crypto asset trading platform registered with the Ontario Securities Commission and securities regulators across Canada, allowing Canadians to buy and sell crypto in as little as 5 minutes. CoinSmart is also one of the first Canadian-run trading platforms to have an international presence, accepting customers across 40+ countries at a time when the digital asset industry continues to rapidly expand.

get started securely through CoinSmart’s website
Best For
Advanced Trading Tools
N/A
1 Minute Review

The crypto industry is booming, and CoinSmart is on a mission to make cryptocurrency such as Bitcoin, Ethereum, as well as alt coins like Doge and Solana, accessible to everyone. With a crypto trading platform designed to break down the barriers of complex and confusing crypto transactions, CoinSmart offers simplicity, learning tools for all levels, as well as 24/7 omni-channel support. CoinSmart is a regulated, Canadian-headquartered crypto asset trading platform registered with the Ontario Securities Commission and securities regulators across Canada, allowing Canadians to buy and sell crypto in as little as five minutes. CoinSmart is also one of the first Canadian-run trading platforms to have an international presence, accepting customers across 40+ countries at a time when the digital asset industry continues to rapidly expand.

Best For
  • Beginner and advanced cryptocurrency investors
  • Investors using an unsecured platform seeking a regulated and secure trading platform
  • Mainly investors in Canada, the U.K., Germany, Spain, France and The Netherlands
Pros
  • Makes crypto less cryptic
  • Simple, safe, secure and regulated
  • One of only two Canadian crypto trading platforms to receive marketplace registration, allowing Canadians to buy and sell crypto directly on a regulated platform
  • Available to more than 40 countries
Cons
  • Their deposit/withdrawal/trading fees are slightly high, but they make it up with their overall service and support.
  • Not available in the US

BC Bitcoin

U.K.-based BC Bitcoin focuses on fast deposits and withdrawals and provides excellent customer support. Supported cryptocurrencies include Bitcoin (BTC), Ethereum (ETC), Litecoin (LTC), Ripple (XRP) and Monero (XRM).

BC Bitcoin requires a minimum deposit of £500 that can be made through a SEPA credit or bank transfer. Clients must pay a deposit fee of $10, €10 or £10, depending on the currency used to open the account.

get started securely through BC Bitcoin’s website

CEX.IO

The U.K. based CEX.io exchange offers BTC and other cryptocurrencies that can be purchased with EUR, USD and GBP. You can trade nine forex currency pairs and the company offers leverage of 3:1 and a competitive fee structure. CEX.io accepts Crypto Capital, Visa and MasterCard credit cards, SEPA credit transfers and bank transfers to fund cryptocurrency purchases. The company charges an instant trade fee of 7% and 3.5% + $0.25 for Visa transactions.

Coinfloor

This U.K.-registered exchange provides users with the option of trading various national currencies against several cryptocurrencies, despite the fact that the U.K. market favors the BTC/GBP currency pair. Other pairs offered by Coinfloor include LTC/GBP, ETC/GBP, XRP/GBP, XBT/GBP, XBT/EUR, XBT/USD, BCH/GBP and ETH/GBP.

While the exchange has a comprehensive fee structure, the minimum GBP deposit for an account at the exchange could be somewhat steep for some traders at £5,000. Deposits can be made with Bitcoin (BTC) and Bitcoin Cash (BTH), as well as through bank transfers in EUR, USD or GBP.

Coindirect

An international peer-to-peer marketplace similar to localbitcoins.com, Coindirect publishes buyers and sellers of different cryptocurrencies and digital assets to users in your area.

The webpage lists the buyer or seller along with the price and payment method, which in most cases consists of bank transfers. 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 40 different cryptocurrencies including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP). 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.

buy now securely through Ledger Hardware Wallet’s website
Best For
ERC-20 tokens
N/A
1 Minute Review

Launched in 2014, Ledger has transformed into a fast-paced, growing company developing infrastructure and security solutions for cryptocurrencies as well as blockchain applications for companies and individuals. Born in Paris, the company has since expanded to more than 130 employees in France and San Francisco.

With 1,500,000 Ledger wallets already sold in 165 countries, the company aims at securing the new disruptive class of crypto assets. Ledger has developed a distinctive operating system called BOLOS, which it integrates to a secure chip for its line of wallets. So far, Ledger takes pride in being the only market player to provide this technology.

Best For
  • ERC-20 tokens
  • All experience levels
Pros
  • Easy to set up and use
  • Supports more than 1,500 different digital assets
  • Tamper proof
  • Portable
  • Long-lasting battery
  • Bluetooth connectivity features
Cons
  • Can be quite pricey
Best For
Serious Crypto Investors

Bit2Me

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.

Coinomi

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.

Final Thoughts

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.

Ready to learn more? Check out Benzinga’s guides to the best cryptocurrency exchange, best cryptocurrency and best crypto wallets.

Frequently Asked Questions

Q

Is buying cryptocurrency in the U.K. illegal?

1
Is buying cryptocurrency in the U.K. illegal?
asked
A
1

The Financial Conduct Authority (FCA) banned the sale of cryptocurrencies on January 6.

answered
Q

How can I buy cryptocurrencies in the U.K.?

1
How can I buy cryptocurrencies in the U.K.?
asked
A
1

The best approach is to use an overseas digital currency exchange such as Coinbase, Luno or CoinJar.

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Related content: FOREX TRADING IN THE UK

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