The UK crypto market is developing fast, and many novices want to get a piece of the action. While potentially intimidating, learning how to buy crypto in the UK can be pretty simple with the right guidance.
This step-by-step guide on how to buy crypto in UK will discuss everything from signing up with trusted cryptocurrency exchanges to the best payment method for purchasing and keeping crypto holdings safe in a wallet.
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- Trade 240+ cryptos
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- Trade the most popular cryptocurrencies with a simple interface
- Deposit with debit, credit, PayPal or bank transfer
- Invest in stocks, ETFs, gold and bonds from the same account
How to buy crypto in the UK – Quick guide
Getting started with buying crypto is easier than you think. You just need to follow these quick steps:
- Register with a crypto exchange: Create an account on any popular cryptocurrency exchange, such as eToro, Coinbase, or Kraken. You must use your email address or phone number to do this. Then, verify your account by following the verification process you will be asked to complete.
- Deposit fiat currency: Deposit funds in GBP into your account via debit card, bank transfer, or even Google/Apple Pay. Just make sure that your chosen exchange accepts GBP deposits.
- Find a cryptocurrency to invest in: Find the cryptocurrency you want to invest in. Most exchanges have a wide variety of coins and tokens available.
- Purchase your chosen crypto: Fill in the amount you want to invest and click on Trade. Your exchange will calculate the applicable fees and confirm the purchase.
- Set up a crypto wallet: Best Wallet and OKX Wallet are some services that will help you store and manage your cryptocurrencies externally if you do not want them to stay on the exchange.
- Transfer your crypto to the wallet: Once created, you can transfer the cryptocurrencies you bought into the crypto exchange within your new wallet.
A closer look at how to buy crypto in the UK
Now, let’s take a more detailed look at each step to help you feel confident about making your first crypto purchase.
1. Register with a crypto exchange
The first step in how to buy cryptocurrency in the UK is choosing a trusted cryptocurrency exchange. Some of the most popular ones include eToro, Kraken, and Coinbase, all of which have strong reputations and are regulated by the UK Financial Conduct Authority (FCA).
However, it should be made clear that, due to their decentralised nature, cryptocurrencies remain unregulated, and are not part of the FCA’s jurisdiction.
Identity verification is seamless on all of these exchanges. The process will require documents like a driver’s license or passport, and in some instances, proof of your address may also be required. All of these requirements fall under regulatory compliance and are ways to secure your account from fraudulent activities.
Pro tip: Always choose an exchange with a strong reputation, good customer support, various cryptocurrencies, and solid security features like two-factor authentication.
2. Deposit fiat currency
The next step is to fund your newly-created account with fiat currency, like GBP. You can fund your account in various ways, including bank transfers, debit cards, and digital wallets like Google Pay.
Each has their respective fees, so it’s good to familiarise yourself with them before proceeding with funding. Generally, bank transfers take some time to process but carry few.
3. Find a cryptocurrency to invest in
Once your account is funded, it’s time to decide on a cryptocurrency you want to invest in. Most of these platforms offer you a wide selection of digital assets, including major cryptocurrencies like:
- Bitcoin (BTC)
- Ethereum (ETH)
- Solana (SOL)
- Binance Coin (BNB)
- Ripple (XRP)
- Cardano (ADA)
- Dogecoin (DOGE)
However, it’s always best to conduct your own research and see the market’s direction first. Understanding how a certain cryptocurrency has been trending over time can allow you to make a judgment on its future value.
For instance, it is generally recommended to invest in established cryptos like Bitcoin or Ethereum given their higher level of stability versus more unknown projects. However, finding the next crypto gem can be highly rewarding if done right.
Investing in promising projects like Pepe Unchained (PEPU), Crypto All Stars (STARS), or Memebet (MEMEBET) can provide the opportunity to gain early exposure to assets with growth potential before they enter the broader crypto market.
Many platforms will offer real-time price charts, market analysis, and news to ensure your decision-making is informed.
4. Purchase your chosen crypto
Having selected the cryptocurrency you wish to invest in, it’s now time to place the order.
You will usually have two avenues to choose from with this: a market order, which buys the coin at its current price, or a limit order, which allows you to dictate the price paid for it. The transaction fees will always be shown before such a trade gets confirmed.
For example, if you wanted to invest in Bitcoin, you might want to wait for it to dip before purchasing. Other exchanges will let you set up a recurring purchase for the same monetary value and invest regularly over time, which will help smooth out volatility.
5. Set up a crypto wallet to store your tokens securely
Though arguably more convenient, leaving your Bitcoin holdings in an exchange is less secure than transferring them to a dedicated crypto wallet.
There are two main kinds of wallets: software wallets, otherwise known as hot wallets, and hardware wallets, or cold storage. Web-based, easy-to-operate software wallets, such as Best Wallet or OKX Wallet, can help beginners store cryptocurrency. These wallets provide a good balance between ease of use and enhanced security.
Ledger Flex or Trezor Model One are also good options for storing assets and are highly recommended for any serious investor. Hardware wallets keep your private keys offline, safe from online vulnerabilities such as hacking.
It’s highly recommended to back up your wallet and store the recovery phrase somewhere safe. If it gets lost, access to your cryptocurrency holdings is lost forever.
6. Transfer your crypto to the wallet or keep it on the exchange
Finally, once you have purchased a cryptocurrency, the most vital thing is to determine where it will be kept.
It may be convenient to leave it on an exchange account if you plan to trade it frequently. If you opt for this, make sure the website has strong security measures, such as two-factor authentication. However, the safest option overall is to transfer your tokens to an external wallet.
Hardware wallets are particularly safe, as they are fully supportive of asset ownership, with you being the exclusive owner of your digital asset keys.
Where to buy crypto in the UK
Joining the cryptocurrency market involves selecting the proper trading platforms. Below, I have highlighted three of the top cryptocurrency exchanges in the United Kingdom that provide the best avenues for holding, buying, and selling cryptocurrencies.
eToro
eToro is one of the most popular crypto exchanges for amateur and professional traders.
While cryptocurrency itself is unregulated, this platform is fully regulated by the FCA, allowing users to easily and safely invest in Bitcoin and other forms of cryptocurrencies such as Ethereum. For the convenience of UK users, GBP deposits are allowed via bank transfer, debit card, or even Google Pay.
For a detailed step-by-step guide, you can also learn how to buy Bitcoin on eToro for more insight into using this platform.
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. Take 2 mins to learn more.
This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.
Kraken
Kraken is an internationally known cryptocurrency exchange that offers a secure way of trading for beginners and professional investors. It has been known for transparency in its fee structure and significant cryptocurrencies such as Bitcoin, Ethereum, and Cardano, which could be easily accessible and diversified by UK users.
Kraken allows sterling deposits via bank transfers, debit cards, and digital means of payment for ease of use by UK residents. Advanced security protocols, including two-factor authentication, have enabled Kraken to keep user security paramount from start to finish, making it one of the most trusted places to buy, sell, and exchange crypto assets.
With advanced trading tools and deep market insights at its fingertips, Kraken is suitable for users looking for professional-level analysis in the cryptocurrency market.
Coinbase
Coinbase is an easy-to-use cryptocurrency exchange that, under the simplicity factor, ensures regulatory compliance in the UK.
The platform offers GBP deposits through a wide range of deposit channels, including bank transfers, debit cards, and PayPal, making it very flexible for Coinbase users in the UK to fund their accounts. Coinbase allows beginners to effortlessly invest in Bitcoin and other popular cryptocurrencies such as Ethereum and Litecoin through an interface that guides them through every step, from registration to making the first trade.
Fully regulated and publicly traded, Coinbase is one of the safest places to conduct crypto transactions in the UK. It also provides access to a secure Bitcoin wallet and allows you to set up recurring purchases, significantly facilitating regular investments.
- Trade the most popular cryptocurrencies with a simple interface
- Deposit with debit, credit, PayPal or bank transfer
- Invest in stocks, ETFs, gold and bonds from the same account
- Trade stocks, ETFs and CFDs
- Beginner-friendly interface
- Trade global markets from your phone or computer
- Best copy trading platform for leveraged CFDs
- No commissions or copy trading fees
- Regulated in nine jurisdictions
Which crypto wallet is best in the UK?
Using a reliable crypto wallet is one sure way to store your cryptocurrency safely. Good options in the UK include:
Best Wallet
Best Wallet is true to its name and one of the best for beginners, being an easy and straightforward wallet to store most digital assets. It works with most major cryptocurrencies, such as Bitcoin, Ethereum, and Solana, thus perfectly serving individuals who want to operate and monitor a diversified investment portfolio.
Firstly, it is secure, but because of its ease of use, even newbies will not have difficulty confidently handling their crypto holdings. It will suit those who place a premium on security but do not want to lose convenience.
OKX Wallet
OKX Wallet is a feature-rich wallet for newcomers and experienced investors alike. It ensures top-tier security with two-factor authentication and asset protection with a private key.
It is unique in many ways and compatible with several decentralized exchanges and dApps. OKX was made for seamless integration into desktop and mobile, allowing users to feel free to manage their crypto investments.
Binance Wallet
Binance Wallet targets users whose preferred cryptocurrency exchange is Binance. It easily integrates with this exchange for safe and easy storage of crypto assets.
Most cryptocurrencies, such as Bitcoin, BNB, and Ethereum, are supported. Among other integrations, the Binance Wallet allows for staking and buying cryptocurrency within the app. This will enable users to grow and manage more crypto while putting security at the forefront.
How to safely invest in cryptocurrency in the UK
Cryptocurrency investments can be risky due to market volatility and security concerns, but taking these precautions will help you protect your assets:
- Use FCA-regulated cryptocurrency exchanges: Make sure you use only reputable exchanges that are regulated by the FCA. Some established ones include eToro and Coinbase, which are already FCA-regulated, where you will be guaranteed safe havens for transacting in cryptocurrency.
- Enable two-factor authentication (2FA): This adds a critical layer of security to your account, and means that even when your password is compromised, no one can access an exchange account or crypto wallet without going through the additional verification step.
- Use a hardware wallet for long-term storage: Once you’re in possession of your cryptocurrency, withdraw your funds to a cold wallet such as Ledger Nano or Trezor to secure it. Unlike online wallets, a hardware wallet does not store your private keys online, hence keeping your data safe from cyber hacks.
- Stay updated on cryptocurrency market trends: Being properly informed about all relevant news updates and demand in the market puts you in a better position to strategize when to buy or sell a particular cryptocurrency.
- Understand your tax obligations: Gains you achieve through investment in cryptocurrency must be declared to HMRC, and capital gains tax (CGT) must be paid on them. As required under UK income tax law, you must keep all the records about your crypto transactions, including purchase prices and dates.
What are cryptocurrencies?
Cryptocurrencies are digital currencies that use encryption techniques for transaction security and regulate the creation of new monetary units in certain networks.
While that differs from more traditional currencies, which a government or central bank issues, most cryptocurrencies are decentralized and tend to run on blockchain technology. In other words, on a peer-to-peer network, all transactions happen securely and transparently with no intermediaries, hence none of the banks.
Such cryptocurrencies include Bitcoin, the first well-known cryptocurrency, and Ethereum, both of which can host decentralized applications. Cryptocurrencies can be mined, staked, traded on crypto exchanges, kept in crypto wallets, and used to buy goods and services.
Is it legal to buy crypto in the UK?
Yes, it is legal to buy and trade cryptocurrencies, including Bitcoin, in the UK. However, while cryptocurrency exchanges work within the legal framework in this country, cryptocurrencies are not generally considered legal tender. Hence, they cannot be used in the same way as any other fiat currency, such as GBP.
The Financial Conduct Authority regulates the services of cryptocurrency in order to protect consumers but does not protect against losses from crypto investment. You can, therefore, buy cryptocurrency in the UK, but you must know this is a high-risk investment, and due diligence must be applied.
The FCA’s official guidance on crypto losses is as follows: “It’s important to remember that crypto is largely unregulated in the UK, so it is highly unlikely you will be covered by the Financial Services Compensation Scheme, so you should not expect any kind of compensation to cover any form of crypto-related losses.”
Is crypto taxed in the UK?
Indeed, investments in cryptocurrency in the UK are taxed. The gains one gets from selling cryptocurrencies like Bitcoin are treated as capital gains and hence brought under CGT.
If you get paid in cryptocurrency or mine and sell it, then there is a good chance that this will fall under the Income Tax bracket. This, therefore, means that all records of cryptocurrency transactions—date, amount, and price—need to be accurate at the time of each transaction. These must be kept on file for reporting to HMRC to avoid any penalties that may arise from this.
Final thoughts on how to buy crypto in the UK
If you’ve read this far, you must be ready to invest in cryptocurrencies in the UK. You will now be aware that starting with FCA-regulated crypto exchanges is one of the most reliable ways to ensure a secure experience.
Meanwhile, you should not forget precautions like enabling two-factor authentication or holding your cryptos long-term in a secure crypto wallet.
Follow the steps in this guide, and you will have all the tools to confidently enter the cryptocurrency market.
