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How To Buy Bitcoin In The UK

Last updated 12th May 2022
Disclosure

Bitcoin is an excellent asset to incorporate into your portfolio to avoid inflation, especially if you are living in the United Kingdom. However, the UK does not have any regulatory framework for cryptocurrencies. The nation has confirmed that crypto assets are property but has no specific cryptocurrency laws. Also, the country does not recognize Bitcoin and altcoins as legal tender.

This guide will cover everything you need to know about buying Bitcoin in the United Kingdom. We’ll discuss the best cryptocurrency platforms, tax laws regarding Bitcoin profits, and how to store coins safely.

Best Brokers To Buy Bitcoin in The UK in 2022

There are several cryptocurrency platforms that you can use in the United Kingdom, which provide great coin selections, staking opportunities, and multiple trading pairs for Bitcoin. We’ve analyzed the best brands and placed them in the table below.

Key Takeaways

  • UK residents can use various tax break programs to limit the amount they will pay in capital gain tax.

  • The top method to store coins in the UK is with a cold wallet since they provide better security than cryptocurrency exchanges. The best hardware wallets are Ledger Nano X and Trezor One.

  • The top platforms to buy Bitcoin in the UK are eToro, Coinbase, Crypto.com, and Coinbase.

  • The UK Treasury has announced that they are in the process of making stablecoins a form of accepted digital currency.

  • UK investors can purchase Bitcoin anonymously by using a decentralized exchange or a centralized exchange that does not require a KYC process.

1
eToro
Minimum Deposit
$200
Exclusive Promotion
User Score
10
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
Buy crypto, or trade cryptocurrencies via CFDs
This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in most EU countries, no EU protections & not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.
2
Atani
Minimum Deposit
$100
Exclusive Promotion
User Score
9
Popular among traders
Fast system for trading
Popular for beginners
3
Coinmama
Minimum Deposit
$100
Exclusive Promotion
User Score
9
Easy to use tool
High profit potential
Offers Phone Support
4
UpHold
Minimum Deposit
$1
Exclusive Promotion
User Score
7
130+ cryptocurrencies and utility tokens available
Highly rated
Clear user interface
5
Coinbase
Minimum Deposit
$50
Exclusive Promotion
User Score
6
Trade and invest in over 25 cryptocurrencies
Extremely simple user interface
Over 68 million customers
6
Paybis
Minimum Deposit
$50
Exclusive Promotion
User Score
5
First transaction fee free
24/7 customer service
Instant payouts

What Options Do I Have When Buying Bitcoin In The UK

UK residents have access to multiple types of platforms for acquiring Bitcoin. Let’s examine each option in greater detail.

  • Brokers: Cryptocurrency brokers allow investors to speculate on the price of Bitcoin while not conveying ownership. Instead, these platforms offer derivative products like CFDs, futures, and ETFs. The top Crypto brokers are eToro, Plus500, and Interactive Brokers.

  • Centralized Exchanges: CEXs like Crypto.com and KuCoin are perfect for those that require ownership of their cryptocurrencies since they allow investors to withdraw coins to a private wallet. Moreover, decentralized exchanges provide multiple services like staking, various trading tools, and informational resources.

  • Decentralized Exchanges: DEXs are not regulated by government authorities and require no ID verification, making them excellent for purchasing Bitcoin anonymously. The top decentralized exchanges are Uniswap, SushiSwap, and 1inch Network.

  • P2P Marketplaces: Peer-to-peer platforms connect buyers and sellers to participate in real-world trading activities. They facilitate the time and location of where the transactions will take place and apply a fee for their services.

  • Global Exchanges: These platforms operate globally and provide services in multiple jurisdictions. The biggest global exchanges that operate in the UK are Coinbase and Binance.

How To Buy Bitcoin In The UK?

Cryptocurrency exchanges have similar buying processes for acquiring Bitcoin. Below are step-by-step instructions that you can use as a guideline if it’s your first time buying Bitcoin:

Step 1: Pick a cryptocurrency exchange or broker
Step 2: Begin the signup process
Step 3: Now, verify your identity
Step 4: Next, deposit money into the account
Step 5: Navigate to the trading platform
Step 6: Finally, write the amount of fiat currency

Where To Buy Bitcoin In The UK?

British investors have access to dozens of platforms that offer investment opportunities in Bitcoin. Let’s analyze the top options and dive into why they are great for beginners.

Cryptocurrency Exchanges

Crypto.com

Crypto.com is a cryptocurrency exchange that supports staking, wallets, NFTs, coin trading, and more. The platform has gained huge popularity thanks to its expert marketing team with advertisements in the UFC and NBA. It aims to be a beginner-friendly exchange that makes acquiring coins straightforward.

Furthermore, they have a learning section that teaches new investors the basics of trading and storing coins. In addition, Crypto.com has Visa cards that allow you to use cryptocurrency as a form of payment. Also, it provides amazing cashback rewards for everyday purchases.

Key Features

  • Crypto.com is the fastest growing exchange with over 10 million active users.

  • Crypto.com provides multiple trading interfaces for various investment activities.

  • The platform has long-term sponsorships with the UFC and NBA.

Pros and cons of Crypto.com

Pros

Investors can order a Visa card for everyday use
Crypto.com provides amazing cashback rewards for using their debit card
Transparent platform with competitive fees

Cons

High fees unless you hold the native CRO coin
Poor customer support
Trading fee discounts can be difficult to understand

Coinbase

Coinbase is known as the most beginner-friendly cryptocurrency exchange due to its educational resources. This section teaches new investors the basics of trading, the risks of cryptocurrencies, and in-depth tips. Also, you can learn about new developments in the crypto market and potential coins you can invest in.

Coinbase features a user-friendly interface that makes it convenient to navigate its platform. All features are easy to find, and the buying process of Bitcoin is simple for beginners. Also, Coinbase has an instant buy section, allowing investors to use their credit or debit card to quickly purchase BTC without using the trading platform. Also, Coinbase has recently updated its fee structure, resulting in lower costs when buying coins.

Furthermore, the established cryptocurrency exchange has created a software wallet where you can transfer coins to hold securely. However, the hot wallet is only compatible with Ethereum and EVM-compatible networks.

Key Features

  • Coinbase is the best option for beginners, thanks to the in-depth learning section.

  • Coinbase has recently updated its fee structure, resulting in lower costs.

  • Coinbase Earn allows beginners to receive free coins for completing quizzes.

Pros

Supports multiple trading pairs for Bitcoin
Easy platform to navigate for beginners
Instant buy section with debit or credit cards

Cons

Customer support is slow
Limited trading tools selection
High fees for using the instant buy section

Cryptocurrency Brokers

eToro

eToro is the most straightforward crypto broker to use for buying Bitcoin, thanks to the simple trading software. Their platform is made for beginners with user-friendly interfaces and easy-to-navigate features. Moreover, new investors can copy successful traders if they’re unsure how to diversify their portfolio.

Furthermore, eToro has multiple deposit methods to provide convenience, such as bank cards, PayPal, Skrill, Neteller, and Yandex. However, the platform sells CFDs, meaning you will not convey ownership of your investments. Instead, you will be buying a derivative product, letting you speculate on the price of BTC.

Key Features

  • eToro is licensed to operate in the United Kingdom.

  • eToro provides over 30 cryptocurrencies on their platform.

  • eToro is the largest CFD broker with over 24.8 million users.

Pros

Provides investment opportunities in commodities, stocks, and cryptocurrency.
Straightforward trading interface
Excellent educational resources

Cons

Higher fees compared to crypto exchanges
Investors cannot withdraw their coins
Must pay a fee to view successful portfolios

Plus500

Plus500 is a global fintech firm providing CFDs on more than 2,500 assets. Therefore, users can diversify their portfolio by purchasing various cryptocurrencies, stocks, and commodities. However, the broker is limited in their crypto selection, only offering Bitcoin and 17 altcoins. Nevertheless, if Bitcoin is your only priority, Plus500 is the perfect option since they provide excellent customer support, multiple trading pairs for BTC, and various trading tools.

Moreover, you can create a demo account to learn the fundamentals of trading. This allows you to make significant mistakes without repercussions. Finally, once you are confident in your investing abilities, you can deposit money using one of the multiple methods Plus500 provides.

Key Features

  • The FCA in the United Kingdom regulates Plus500.

  • Plus500 provides an advanced trading interface with multiple tools.

  • Plus500 has intentions to add more coins to its platform.

Pros

Plus500 provides over 2,500 assets
Amazing security
Regulated in the United Kingdom

Cons

Limited selection of cryptocurrencies
Investors cannot withdraw coins to a private wallet
Larger fees compared to cryptocurrency exchanges

What are the Regulations and Taxes When Buying Bitcoin In The UK?

Unlike many other countries, the United Kingdom doesn’t have short-term and long-term Capital Gains Tax rates. Instead, all capital gains are taxed under the same rates, and the amount you’ll pay depends on your profits.

  • 10% on profits up to £50,270

  • 20% on profits up to £150,000

  • 20% on profits more than £150,000 plus an additional 20% on the first £150,000

Also, the UK has crypto tax breaks allowing investors to keep more profits. Your first £12,570 of income is tax-free by using the Personal Income Tax Allowance program. Moreover, the Trading and Property Allowance program lets investors keep £1,000 tax-free.

The United Kingdom is far ahead than most countries in terms of adopting cryptocurrency. The Treasury has announced that it will regulate some cryptos as part of a wider plan to make the UK a hub for digital payment corporations. The government has stated that stablecoins will become established payment methods giving people confidence in using digital currencies.

Other Considerations When Buying Bitcoin In The UK

When investing in Bitcoin, you should consider multiple factors beforehand. Below we’ve outlined the main things to contemplate when buying BTC in the United Kingdom.

  • Volatility: The cryptocurrency market is highly volatile, so prices often dip and rise significantly. Before buying Bitcoin, you should consider if you can mentally cope with your portfolio taking a huge hit. Perhaps implementing an investment strategy is ideal for preventing panic selling and other mistakes.

  • Security: You should be wary of how secure your coins will be after purchase. Keeping them on an established exchange is excellent since most platforms have incorporated advanced protection technologies. However, keeping them on a private hot or cold wallet is still a far better alternative.

  • Transactions Can’t Be Reversed: Withdrawing cryptocurrency to a private wallet can be a nerving experience since one mistake can lead to losing all your coins. Therefore, you should ensure that the withdrawal address is 100% correct. Also, be wary of hidden viruses programmed to replace your copied wallet address with their own.

  • Privacy: Centralized crypto brokers and exchanges require users to verify their identity to access their services or lift restrictions. This is to comply with government laws like Know your Customer. However, this means that you lose privacy when buying Bitcoin, and the crypto platform can share your investing information.

  • Taxes: The cryptocurrency market is still in its infancy, and governments like the United Kingdom are adapting. The tax regulations are generous to current investors, but new laws can change this in an instance. Therefore, if you go for a long-term strategy with Bitcoin, consider the potential changes in regulations and taxes.

What Payment Methods Can I Use To Buy Bitcoin In The UK?

UK investors have access to multiple payment methods when buying Bitcoin. Below are the most popular and convenient deposit options.

  • Credit/Debit Card: These cards are widely available and convenient to use. Simply write in your details, deposit amount, and hit send. Also, some platforms allow you to buy Bitcoin instantly without using the trading interface.

  • Bank Transfer: Depositing via bank transfer is great if your credit or debit card is not accepted. The processing time depends on your banking services, but most transfers are complete within a day. Also, double-check the reference code to ensure the funds will reach your account.

  • Cryptocurrency: All crypto exchanges accept cryptocurrency as a deposit method. However, the fees and processing times depend on the coin you are sending. Therefore, we recommend using stablecoins or payment coins like XLM since they have ultra-low costs for transfers.

  • eWallet: Online banking services like PayPal are brilliant for depositing because some exchanges provide integrations. This lets users deposit quickly since the payment method doesn’t require typing in lots of information. Also, some eWallets allow investors to connect their bank cards to the system, making it more convenient to use.

How To Store Coins

Once you buy Bitcoin on a cryptocurrency exchange, you’ll want to withdraw it to a private wallet. This is because they are safer and provide much better security than exchanges. However, you may find it difficult to decide if you should use a hot or cold wallet. Let’s examine each option and go over its pros & cons.

Hot Wallet

Hot wallets are great for small portfolios because they allow quick transactions and deposits to cryptocurrency exchanges. They provide better security than crypto exchanges because your coins are not pooled with other investors. Therefore, an exploit in an exchange system will not affect you by keeping funds in a hot wallet. Also, you have more control of your coins and can access various dApps. The best hot wallets for Bitcoin are Exodus, Coinbase Wallet, Luno Wallet, and Trust Wallet.

Pros

Hot wallets allow quick transactions
Better security than exchanges
It’s free to create a hot wallet

Cons

Forgetting your private key will result in lost coins forever
Hackers can easily get your hot wallet password if you don’t properly safeguard your computer

Cold Wallets

Cold wallets provide the best protection because they store your keys offline. Therefore, the only point of vulnerability is someone obtaining your written keys physically. Although they require an initial investment, they are highly recommended for those with large portfolios. The best cold wallets are Ledger Nano X and Trezor One.

Pros

Provides the best protection
Private keys are stored offline
Straightforward to set up

Cons

Requires an initial investment
Not convenient if you regularly make transactions

Final Thoughts

Purchasing Bitcoin in the UK is convenient due to the multiple available cryptocurrency exchanges and brokers. The platforms we’ve mentioned have user-friendly interfaces that make the Bitcoin buying process easy for beginners. Overall, the best way to acquire BTC is through Coinbase since its system is tailor-made for novice investors. It provides educational resources, instant buying methods, and multiple trading pairs for Bitcoin.

FAQs

Do I need to pay tax on profits in the UK?
Can I buy Bitcoin without an ID in the UK?
Staff Writer

Staff Writer