Looking for a secure and simple place to buy Bitcoin in the UK? CoinSmart has your back!
Twenty years ago, the idea of paying for goods and services with a cryptocurrency wallet would have sounded…bizarre. Now, cryptocurrencies provide an attention-grabbing, volatile trading market, as we’ve seen through the rise and crash of the bitcoin market.
The U.K. bitcoin market, while not as liquid as other markets, still provides ample opportunities. The U.K. tax structure also supports speculation, gambling and trading in cryptocurrencies, although capital gains taxes continue to be assessed. The positive U.K. tax treatment on speculation and gambling profits makes trading in CFDs and cryptocurrency futures more attractive.
Also, opening an account with an online broker to trade cryptocurrency CFDs does not require a wallet or an exchange account, since you never take possession of the cryptocurrencies. A word of caution: The bitcoin market, which continues to dominate trading activity as the best cryptocurrency and cryptocurrency markets in general, often trade with extremely high volatility.
Protect yourself from losses by learning how to trade cryptocurrency in a demo account first before risking your capital in a funded account.
Overview: How to Buy Bitcoin in the U.K.
In addition to a number of well-known cryptocurrency exchanges, U.K. cryptocurrency traders can purchase bitcoins through peer-to-peer websites and groups or via bitcoin ATMs. If you decide to go the trading route, many online brokerages in the U.K. now offer cryptocurrency CFDs and futures trading.
Consider whether it makes more sense for you to trade bitcoins or invest in them for long-term gains or to use them. If you only want to speculate or gamble on bitcoin fluctuations, then you would not need an exchange or a wallet since you do not need to take possession of them. On the other hand, if you plan to invest in bitcoins for the future and/or spend them, you’ll need a wallet and probably an account at a cryptocurrency exchange as well.
When dealing directly with a cryptocurrency asset, you have to pay in full for each unit. Nevertheless, when trading CFDs or cryptocurrency futures through some online brokerages, such as XTB for example, you can take advantage of leverage that can be as high as 300:1. Follow our step-by-step outline for buying bitcoins in the U.K.:
- Open an Account at a Cryptocurrency Exchange
Bitcoins can be purchased at virtually all cryptocurrency exchanges. Bitcoin is also the most common cryptocurrency used to purchase other cryptocurrencies. The U.K. hosts a number of first-rate cryptocurrency exchanges, such as CoinSmart, that offer bitcoins for sale, in addition to cryptocurrency gambling and spread-betting brokers that let you gamble on the movement of a cryptocurrency pair.
- Get a Cryptocurrency Wallet (optional)
In order to maintain full control over your bitcoins and other digital assets, you should ideally withdraw them from the exchange, ATM or peer-to-peer group to a personal crypto wallet and subsequently back up and protect your wallet’s private key. The wallet’s main function consists of notifying the exchange or other source than you wish to send and receive transactions.
Crypto wallets share some of the same characteristics as email accounts. A crypto wallet offers a public key, which allows you to receive payments and gifts, and the private key that gives you the ability to make purchases and must remain confidential. Wallets can be installed on your desktop computer or laptop, as well as on an Android or iOS smartphone or tablet. In addition to the wallets mentioned above, a web-based wallet does not require a download and gives you access to your bitcoins anywhere you can get an internet connection.
For added security, you can opt for a hardware wallet that consists of a peripheral device that plugs into a computer like a USB memory stick. Once you have a wallet, make a backup by either saving it to a USB drive or on printed paper and store it in a safe place. Make note that this type of “cold storage” can have drawbacks. You run the risk of losing your USB drive or the paper wallet and consequently, the contents of your wallet.
- Withdraw Bitcoins to Your Wallet
After buying your bitcoins on an exchange or from another source, you can 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 you do not have control of your private keys and exchanges can be hacked. If your bitcoins are not in your personal possession, they could be subject to theft by hacking. Therefore, keep your bitcoins in your personal wallet with your own private key. Once you have withdrawn your bitcoins from the exchange or other source, you have successfully bought your bitcoins.
Best Bitcoin Exchanges
You can find a selection of some popular U.K. bitcoin exchanges below:
CoinSmart makes investing in Bitcoin, Ethereum, and altcoins simple and 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. The exchange is also one of the 1st 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.
BC Bitcoin focuses on providing excellent customer service and fast deposits and withdrawals. In addition to Bitcoin (BTC or XBT), the exchange supports Ethereum (ETC), Litecoin (LTC), Ripple (XRP), Monero (XRM) and many others.
The exchange requires a minimum deposit of £500 that can be made through a SEPA credit or bank transfer. In addition, clients must pay a deposit fee of $10, €10 or £10, depending on the currency used to open the account.
Coindirect is an international peer-to-peer marketplace similar to localbitcoins.com, which publishes buyers and sellers of bitcoin and other cryptocurrencies in real time. The exchange makes note of your IP address and locates buyers and sellers in your area. Along with the buyer or seller, the exchange publishes the price and the payment method, which in most cases consists of bank transfers. Coindirect supports Bitcoin (BTC or XBT), Ripple (XRP), Ethereum (ETH), EOS.io (EOS), Stellar Lumens (XLM) and Tether (USDT).
Bitcoin ATM Automatic Tellers
In addition to peer-to-peer groups and cryptocurrency exchanges, bitcoins can be sourced through a bitcoin ATM. In the U.K. a total of 213 bitcoin ATMs can be found in select cities. The London metropolitan area hosts a total of 134 bitcoin ATM locations, as well as 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:
- Enter a mobile number.
- Receive a validation code and enter it at the ATM.
- Select the cryptocurrency you wish to buy.
- Choose whether you already have a bitcoin wallet. If not, a new paper wallet will be generated.
- Finally, you must scan the QR code on your wallet and insert the cash bills to pay for the bitcoins you want to buy.
Best Crypto Wallets
Below, you can find listed some popular wallets used by U.K. bitcoin traders and investors:
Bitcoin Core Wallet
Bitcoin Core Wallet offers the highest level of stability, privacy and security. This wallet acts as the backbone of the entire Bitcoin network, taking up a large amount of space and memory. If you choose this wallet, you will have to download the entire bitcoin blockchain.
This Android mobile app has intuitive features for ease of use in addition to being fast and secure. The company’s vision consists of decentralization and zero trust, which means that no central service is needed for Bitcoin-related transactions. This app makes a good choice for people with little technical background.
Ledger Nano S
A very popular hardware wallet, the Ledger Nano S supports over 40 different cryptocurrencies including Bitcoin (BTC aka XBT), Ethereum (ETH) and Ripple (XRP). The wallet was designed around a chip similar to those used in credit cards and passports for the highest security and protects your assets with a PIN code.
The Coinomi mobile and desktop wallets offer a single platform that supports over 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 supported. The main advantage of this wallet is its ability to exchange cryptocurrencies at no cost.
As the world’s premier cryptocurrency, Bitcoin has the most liquidity and accessibility both in the U.K. and around the world. Therefore, traders and investors buying bitcoins in the U.K. will generally have no trouble finding sellers in a normal market.
You can also source bitcoins through bitcoin ATMs, local active peer-to-peer bitcoin trading groups and via cryptocurrency exchanges. Knowing your intentions for getting into the crypto market, whether to operate as a speculator, investor or spender, will determine if your best option will involve buying a wallet and opening an account at a crypto exchange or opening a brokerage or gambling firm account. Buying bitcoins is easy, but what matters most is the exchange or broker you choose.
If you just prefer to trade Bitcoin’s price, you can opt for opening an account at one of the many online brokers that offer cryptocurrencies on trading platforms such as XTB.
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