How & where to buy cryptocurrency in the UK
This in introductory guide takes you through a step-by-step guide on how to buy cryptocurrency from brokers in the United Kingdom. Learn about what crypto is and how it works, then compare the top trading platforms.
What are the best UK exchanges to buy cryptocurrency on?Copy link to section
If you just want to find a broker to get coins right away, you can find the top platforms in the table below. Sign up by following one of the links, or read on to learn more about how everything works.
77% of retail CFD accounts lose money.
82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
What is cryptocurrency?Copy link to section
Cryptocurrency is digital money that can be sent directly to another person without the need for a financial institution. Rather than a bank, cryptocurrencies use digital signatures and online public ledgers (blockchains) to track and verify every transaction. As well as being used to buy and sell goods, cryptocurrencies are also assets that can be traded like stocks and shares.
The first and most popular cryptocurrency is Bitcoin. It was created in 2009 by the pseudonymous Satoshi Nakamoto, who explained the concept in his white paper Bitcoin: A Peer-to-Peer Electronic Cash System. Now, there are hundreds of different cryptos available to buy and sell online.
How does cryptocurrency work?Copy link to section
Cryptocurrency works by using a blockchain to store and verify transactions. A blockchain is like a public database and includes a history of all transactions. Every new transaction is added to the end of the chain and once it’s there, it cannot be changed.
In this way, the blockchain is irreversible proof of who owns what. The best way to understand it is to start with how Bitcoin works, but the technology has developed a lot in the decade since that was first established.
Now there are platforms like Ethereum that use a different, less energy-intensive system to create something more like an decentralised internet. Even that technology has been taken a step further, to create whole systems of things like decentralised finance, all of which use a version of ‘the blockchain’ but in a variety of ways.
How to buy crypto online – a step-by-step guideCopy link to section
Step 1. Find an exchangeCopy link to section
There are many different types of crypto exchanges; centralised and decentralised, ones that accept fiat currency deposits and some that only accept crypto, and ones that stick to the top cryptos while some offer a variety of altcoins.
Most exchanges are open to users from around the world but there are some which are more suited to users who want to buy crypto in Pounds. Our favourite option for British crypto investors is below:
- Binance: The most popular crypto exchange around, Binance can handle millions of transactions per second and offers hundreds of different coins. Join Binance today >
Step 2. Sign up and fund your crypto accountCopy link to section
Before you start buying crypto you need to sign up for an exchange account. You need to provide some contact details to do this and most require a form of photo ID as well, such as your driving license or British passport. The biggest exchanges, like Binance, let you fund your account with GBP and you can deposit via a bank transfer or card payment.
Step 3. PurchaseCopy link to section
To buy a coin you need to search for its ticker symbol on your chosen exchange. If you were trying to find Bitcoin, for example, you’d search for the BTC symbol and look for the GBP/BTC pair. Then you enter the details of how much you want to buy and then execute the trade.
Many altcoins can only be bought with another cryptocurrency. Bitcoin and Ethereum are usually the best cryptos to use for this, but there are others, like Binance Coin (BNB) and Tether (USDT) that work just as well. If that’s your plan, first find the GBP/BTC or GBP/ETH pair to buy some crypto, and then swap it for your chosen altcoin.
Step 4. (Optional) Get a suitable walletCopy link to section
A wallet is the most secure place to store cryptocurrency. It’s not a must: you can leave your coins in an crypto exchange account and feel confident they’ll be safe. But the best place to take control of them and add an extra layer of security is a wallet. They come in different forms, from wallet apps to full-blown hardware wallets that store coins offline.
Take a look at the options to see which one is best for you. Here are a couple of leading wallet providers to start with:
- CoolWallet: CoolWallet is a hardware wallet that keeps your coins in ‘cold storage’, safe from an internet connection. It also has an app that lets you access your coins via a bluetooth connection. Sign up with CoolWallet >
- StrongCoin: StrongCoin is a ‘hybrid’ wallet, combining the functionality of an online option with additional security. It stores your private keys on your browser and encrypts it before it’s stored on StrongCoin’s servers. Get StrongCoin now >
How to trade cryptocurrency in the UKCopy link to section
Step 1. Find a brokerCopy link to section
Trading crypto means making lots of trades to try to profit from price swings. To do this you want to find a broker that charges low trading fees, so you don’t see your money eaten away by the cost of trading. More brokers now offer completely free trading and it can make a big difference to your bottom line.
Financial regulators in the UK have put some limits on how British users can trade crypto. You need to pick a broker that lets you buy the ‘underlying asset’, as opposed to a CFD (contract for difference).
Step 2. Deposit moneyCopy link to section
You have to fund your broker account with a fiat currency, like GBP. This is easily done through a bank transfer or debit/credit card payment. Look out for the fees, though, as some brokers charge for deposits and others for withdrawals.
Step 3. Decide how you’d like to tradeCopy link to section
There are many different ways to trade crypto. You can trade with a very short term focus, buying and selling coins many times over the course of a single day, or take a slightly longer view and hold onto the coin for a few days.
Each approach is based on analysis of a coin’s price. By studying it you can identify trends and use these to predict how the price might move in the future. One of the most common trends to look out for is support and resistance levels – where a coin repeatedly hits a certain price and reverses course.
Read up on the different strategies and trading indicators that you can use before you start trading. It’s a good idea to have a fixed set of rules to guide you so that you make decisions based on hard analysis rather than emotion.
Step 4. Start tradingCopy link to section
If you’re new to crypto, the best way to start trading is with a demo account. Virtually every broker offers a variation of this and it’s a way of trading with pretend money to get used to the way everything works. Making your early mistakes with a fake budget is a lot better than putting your own money at risk.
In terms of the trading itself, you have to decide whether you think a coin is going to go up or down in value. If you think it’s going up, then you should buy it – known as taking a ‘long’ position – while if you think it’s going down, you can sell it – known as a ‘short’ position.
As you get more experienced, there are other trading strategies you can use. Another popular option is using leverage, which lets you make bigger trades by only putting up a small portion of the overall value as a deposit. Treat this with caution: losses can escalate just as fast as gains.
77% of retail CFD accounts lose money.
Still undecided?Copy link to section
It’s always a good idea to take your time over something new and cryptocurrency is no different. Below is a quick summary of the pros and cons of investing in crypto, followed by some final questions for you to think about.
ProsCopy link to section
- There’s the potential for big gains, coins have been known to gain over 100% in value during bull runs
- It’s becoming more mainstream and established institutions have already started to invest
- It’s now a realistic alternative to putting your money in a bank or investing it in stocks and shares
- Some blockchain platforms offer improvements to real-world issues and the widespread introduction of this technology is possible
Now, here are three more questions to help you decide whether to invest in cryptocurrency.
1. Is it a good time to buy cryptocurrency?Copy link to section
This is a varied question that depends on a few factors, namely; the coin you’re interested in, the state of the overall market, and what your time frame is for seeing returns. Many coins offer benefits for owning them, in the form of interest, dividends, or voting rights, that should also factor into your decision.
The crypto market has been known to experience swings in both directions, and long term investors in particular should keep this in mind. If you’re in it to trade, you can try to predict short term changes using your own indicators regardless, but either way our analysis can help you:
2. What problem does cryptocurrency solve, and what are its investment prospects?Copy link to section
Cryptocurrency solves the problem of trusting a third party to act as an intermediary for your money. Instead, every transaction is publicly available and it uses digital signatures along with a blockchain to prove who owns what and prevent double-spending.
It’s difficult to predict the future and some coins are bound to fail, but generally the prospects for cryptocurrency look good. The crypto ‘ecosystem’ has become much more popular in recent years. It has achieved institutional acceptance in many places, with plenty of investment funds already including coins in their portfolios.
One of the challenges is that Bitcoin heavily influences the market as a whole. It generally has the most volume, so it’s very important to know how it’s doing before you buy cryptocurrencies at all. Crypto changes fast and tracking the latest news is also crucial to being a successful investor:
Bybit hits 20 million users ahead of 5th anniversary
LooksRare (LOOKS) displays resilience as altcoin market braces for a retreat
Animoca Brands becomes TON Blockchain’s largest validator
3. Do you want to hold cryptocurrency for the long term?Copy link to section
Again it depends on what your goals are. If you research a coin and like its prospects or want to participate in the platform, then you probably do want to hold it for a while. Otherwise, many traders choose to get in and out of positions quickly to try to benefit from price fluctuations. Here are a couple of final points to consider, whatever your chosen time frame.
Considerations for a long term investment strategy
If you’re in it for the long term and only expect the price to go up, find an exchange and purchase crypto right away. Then it can be best to find a wallet to store them, with many platforms offering their own native wallets with unique rewards for investing coins in the success of their work.
Considerations for a short term trading strategy
Short term traders need low fees and flexible trading options. Pick a broker with cheap – or no – trading fees and brush up on how to use tools and charts to predict the market.
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >