Anyone looking to buy cryptocurrency in the UK has a wealth of options. There are many cryptocurrencies available, and a large variety of purchasing platforms. It has definitely been an excellent time to get involved with the cryptocurrency market, due to the vast increases in value experienced by many of the top tokens. A wide number of payment methods are also supported by most platforms in the UK.
So in this article, we’re going to assess all of the issues related to purchasing cryptocurrencies in the UK, as well as discussing some of the most important investment options.
Why Trade Cryptocurrency instead of Buy Cryptocurrency?
No wallet needed
Trading does not require a wallet since you are betting on the underlying price of crypto rather than purchasing the coin.
Use usual payment methods
Most crypto brokers allow trading in crypto through the usual payment methods such as debit/credit cards, direct bank transfers and third-party payment services such as PayPal.
Easy & fast
Trading is quick and can even be done through the use of robots. It allows you to use the rapid rise and fall in the price of crypto to make quick profits.
The Best Places to Buy Cryptocurrency in the UK in 2021
There is a significant amount of evidence that purchasing cryptocurrency as an investment is becoming popular in the UK. For example, a recent poll found that nearly 20% of the British people have now purchased tokens. This figure has increased massively in recent years, as only 3% of the population had owned a token back in 2018.
This popularity of cryptocurrencies means that they have become a particularly viable investment niche. You can purchase coins through a broker or an exchange, so we have shortlisted our recommendations of the top platforms in the following table.
How to Buy Cryptocurrency With the Best Broker in the UK
When it comes to cryptocurrency brokers, there are many options available, which can make choosing the best broker a tricky proposition. Fortunately, there are several reputable brokers that have been involved in the crypto business for several years and have thus built up extensive experience with executing trades on behalf of investors. So in this section, we will examine some of the factors that you should take into consideration before choosing a particular broker.
1. Register with a Reputable Broker
Registering with a broker is relatively straightforward, but there are numerous platforms available in the UK, and the process is very user-friendly and intuitive. Registering with a broker simply requires you to identify a suitable broker, before entering into a contractual agreement with them. All you need to do is enter a username, email ID and phone number to open an account.
2. Verify your Identity (KYC Process)
The Know Your Customer (KYC) verification process has become an important part of cryptocurrencies in recent years. All regulated brokers make KYC an important part of their registration process, and it is, therefore, important to ensure that you do indeed seek out a regulated broker before trading cryptocurrencies. The verification process will involve the submission of documents such as a driving license or passport and a utility bill.
3. Deposit Funds with your Preferred Payment Method
Depositing funds with a broker is not particularly complicated, and usually simply requires the usage of a straightforward user interface. Most brokers support common payment methods such as direct bank transfers and debit/credit cards.
4. Open a Position to Long/Short Bitcoin
Bitcoin remains the most popular crypto token on the market, and certainly the most valuable. This means that many investors choose to enter long and short positions in Bitcoin, using exchanges such as eToro.
When you enter into a long position, it means that you believe the crypto token will increase in value over a period of time. Whereas those taking a short position in Bitcoin believe that the token will decline in value in the foreseeable future.
When choosing a long position on eToro, it is important to note that you'll be buying the actual coin, if you choose a long position without leverage. Otherwise, users can also trade through CFDs on the price of the underlying coin.
Finally, it’s important to understand that investors have several possibilities in order to guide the trading process, including market orders, limit order, stop losses, trailing stop losses, and other instructions to brokers. These order types communicate various market activities, which brokers will then take into consideration while executing trades.
5. Close your position
Possibly the most important of the orders communicated to the brokers is the stop-loss order which is an automated setting. It instructs your broker to cease activity when certain market conditions have been satisfied. This effectively closes your position automatically. This can happen for a variety of reasons, but there are certain situations in which investors may wish to close their position early. This would most likely occur when an investor is happy with the profits that they have accrued, but can also be implemented when a trader cannot afford any further losses. A position can be closed manually at any time.
How to Buy Cryptocurrency With the Best Exchange in the UK
There are a range of reasons to purchase cryptocurrencies via exchanges in the UK, and this is definitely becoming a more popular activity. There are nearly 2 million UK owners of altcoins at the time of writing, and over 500 shops and bars in the UK now accept Bitcoin as a payment method. The FCA also found in a study that in 2020, 27% of UK residents learned of cryptocurrencies through traditional media.
It’s therefore important to familiarise yourself with the crypto market if you wish to maximise your potential as an investor.
1. Set up a Wallet
Setting up a wallet for cryptocurrency trading is relatively straightforward, and there are usually instructions provided by the developers. However, there are decisions to be made regarding whether you opt for a software or hardware wallet, or indeed choose to store cryptocurrencies on an exchange website. Hardware wallets with cold storage are usually considered to be the most secure option.
2. Choose and Join an Exchange
Registering with an exchange simply requires an investor to provide some personal details, before confirming identity and address. Fees and security are important factors that tend to differ between platforms and should be factored in during any decision over the best deal available. Regulation can also be an issue, with, for example, certain platforms are not always available in all territories. Select an exchange that meets your needs.
3. Choose Your Payment Methods
Most payment methods are available with cryptocurrency, such as direct bank transfer, credit cards, debit cards and even Bitcoin itself.
Credit cards are widely available but can incur fees, whereas debit cards tend to be free, but don't offer the same protection and policies associated with credit cards. Bank transfers are slow but incur lesser fees as compared to other methods.
4. Place an Order to Buy Cryptocurrencies
Placing an order to purchase a cryptocurrency involves several steps, but isn't as complicated as one might imagine. Firstly, you need to register for the site in question, which will require you to confirm your identity and address. Next, you will need to deposit funds on the website, via one of the approved payment methods. The next part of the process will be to locate your required investment, which can be achieved via the user interface included on the website.
Then you will purchase the coin by clicking on the buy button but confirm that all details are correct before finally placing the order.
5. Safely Storing Your Cryptocurrency in a Wallet
Storing your cryptocurrencies in a wallet requires you to go through the following process. Firstly, log on to your exchange of choice. There is usually a sidebar available on one side of the screen, which will include a wealth of options. Typically you will need to pick “withdraw”, before choosing an appropriate currency.
Next, select “My Wallet” in the Destination Address field, or other similar option depending on the platform. Enter the amount and hit “Send”. It should be noted that this is entirely optional, and probably only necessary for those investors that are dealing with large amounts of tokens.
What if I Want to Buy Cryptocurrency With Cash in My City in the UK?
Although it is possible to purchase cryptocurrencies with cash through a peer-to-peer platform, there is simply less protection than with other payment methods. It’s also difficult to find someone willing to sell crypto tokens for cash payments, which means that it’s generally much better to purchase through a regulated platform.
Nonetheless, there are several avenues available for purchasing altcoins via cash, such as ATMs, peer-to-peer exchanges, or even simply face-to-face meetings.
Crypto ATMs are available at many locations in the UK. Some of the prominent cities where crypto ATMs are available are Aberdeen, Basildon, Belfast, Birmingham, Brighton, Bristol, Cambridge, and Cardiff, Edinburgh, Glasgow, Leeds, London, Newcastle upon Tyne and Oxford.
Cryptocurrencies are regulated in the UK for money laundering purposes. The Financial Conduct Authority is responsible for any laws related to anti-money laundering and counter-terrorism financing activities.
The buying and selling of cryptocurrencies is perfectly legal in the UK, but recent regulatory moves made by the UK authorities have seen the trading of cryptocurrency derivatives outlawed.
It should also be noted that any profits made from cryptocurrency trading are deemed taxable, as they are legally considered to be commodities.
3 Tips to Buy Cryptocurrency
Next in this article, we will assess three important tips to purchase crypto effectively.
Choose the Right Time and Do Your Own Research
Firstly, it's important to select an opportune time in the market, as this will lead to improved profits. Researching the market diligently is certainly an important part of this process. In doing so, investors should take into account factors that could move the market in the immediate future, while technical analysis of stock charts is also possible.
Comparing Costs to Buy Cryptocurrency
Comparing costs across crypto platforms is also useful, as it can enable investors to acquire the best deal possible. Different platforms impose varying fees for cryptocurrency purchases, so it’s important to clarify these before progressing. The fee structure can really make a big difference to profits, particularly if you are implementing a short-term trading strategy.
Safety and Security
Safety and security are also extremely important criteria when it comes to the cryptocurrency market, and so it’s therefore vital to investigate the security provisions made by a platform before committing to an investment. Any credible cryptocurrency platform should have this information included on its website, but you can also approach customer services to clarify key details.
Can I Buy Cryptocurrency With Pound Sterling?
Virtually all brokers accept popular currencies such as dollars, euros, and pound sterling. Thus, there is no reason to expect any platform to disallow purchasing cryptos with pounds. It is particularly attractive, and there should be no exchange rate issues for pound sterling purchases. Simply use the methods described above and start your crypto journey.
Other Ways to Buy Cryptocurrency in the UK?
Use a Cryptocurrency ATM to Buy Cryptocurrency:
As mentioned previously, there are numerous cities in the UK in which cryptocurrency ATMs are available, and this is thus a viable option for UK investors.
Other Ways to Get Cryptocurrency:
Other possible ways of purchasing cryptocurrencies include mining the coin directly from the source, staking, and P2P exchanges.
In conclusion, purchasing cryptocurrencies in the UK has become extremely popular, due to its convenience and increasing media profile. Most veteran investors believe that it is an excellent time to invest in cryptocurrencies and begin your investment journey.
Frequently Asked Questions
Generally speaking, there is no particular advantage to buying cryptocurrencies with US dollars over pound sterling. However, this can be dependent on the exchange rate, as there can be market conditions during which it is preferable. Furthermore, the US dollar is the most recognised currency in the world and may be available as a payment method in some areas where the pound sterling cannot be used.
Yes. Most platforms will insist on identity checks as part of the KYC norms.
Yes, in some cases. The biggest coins, particularly Bitcoin, are accepted by many retailers, but this also depends on the policy of individual retailers.
These are widely available from major retailers. In the UK, a hardware wallet typically retails at around £50.
This is dependent on many factors, including if you're buying or mining (there are no direct fees associated with mining) and where you're buying them from. If you purchase from an exchange, they should have transparent information available on fees.