How To Buy Cryptocurrency
in the UK
Making Crypto Simple
If you are looking for a super quick breakdown on how to buy Cryptocurrency in the UK you can find our step-by-step below. We highly recommend CEX since it’s very easy to use, they have the lowest fees in the UK and their support team is truly excellent. Alternatively, if you’re looking for more options, have a look at our top picks for the best cryptocurrency exchanges in the UK.
How To Buy Cryptocurrency in the UK
- Register an account on CEX
- Verify your account
- Deposit GBP into your account
- Click the “Buy/Sell” link in your dashboard
- Search for the Cryptocurrency you are looking to buy and click “Buy Coin”
- Enter the amount of GBP you want to spend or how much of the particular Cryptocurrency
you want to buy
- Click “Buy”
- If you have any trouble with the above steps, you can reach out to their support team 🙂
If you are looking for more detailed guides, you can find them below.
Where To Buy Cryptocurrency
in the UK
We’ve reviewed over 100 exchanges across the globe and have been doing this for many years. We are confident that CEX is the best exchange in the world for people in the UK to use.
Find out more about Cryptocurrency Exchanges in the UK
Are you ready to become part of the cryptocurrency revolution? Investing in crypto is a great way to diversify your regular investment portfolio and bring some excitement to your routine.
Don’t feel threatened by the big fish that have already joined the crypto sea, as you’re already taking the first step by educating yourself about the market. Crypto trading is known for bringing incredible returns to traders, despite its volatile nature.
Today, we’ll focus on the UK crypto market and tell you everything you need to know about buying cryptocurrency in the UK. Let’s try to answer all your doubts and queries.
Cryptocurrency in the UK
In 2008, Satoshi Nakamoto published Bitcoin’s white paper and introduced the first functional electronic payment system that offered a solution to double-spending using cryptographic proof instead of trust.
Even though Nakamoto was optimistic about his software, little did he know, it would take the world by storm in just a couple of years. At first, the crypto community was a closed circle of the most enthusiastic tech-savvy individuals.
They were the first buyers of Bitcoin at a time when the coin’s price was less than a dollar, whereas now, 1 BTC is worth over $8,000!
The first major wave of traders, investors, and developers took place between 2015 and 2017, just before Bitcoin experienced a major price increase, the second wave shortly after. The UK hasn’t stayed immune to the crypto craze and contributed with a number of ICOs and crypto launches.
When cryptocurrencies first appeared, the UK government looked upon the industry with a great deal of skepticism and reserve. It wasn’t until 2018 that the main financial and legislative bodies recognized the prospects of cryptocurrency and decided not only to regulate but also to invest in the crypto market.
In November 2019, the UK Jurisdiction Taskforce of the LawTech Delivery Panel published the Legal Statement on Crypto Assets and Smart Contracts in an attempt to answer critical legal questions connected to crypto assets.
According to this paper, the main features that characterize crypto assets are enough to treat them as property. The novel features displayed by some of them, i.e. intangibility, cryptography, blockchain technology, decentralization, etc, don’t disqualify them from the property status.
As a result, cryptocurrencies are now taxable, and individuals are required to pay Capital Gains Tax (CGT) or Income Tax (IT) for cryptocurrency transactions depending on the size of the profit. Employers who choose to pay their employees in crypto, have to pay National Insurance too.
As of January 2020, the Financial Conduct Authority (FCA) has been appointed as the anti-money laundering (AML) and counter-terrorist financing (CTF) supervisor for businesses involved in the crypto industry. Such businesses are required to assess the potential risks and find ways to put them under control, perform AML and KYC checks on their customers, etc.
What Kind of Cryptocurrencies Are There?
When it comes to cryptocurrencies, Bitcoin is just the tip of the iceberg. Once developers witnessed the success of the world’s first digital coin, they were encouraged to create another one themselves. Today, there are more than 5,000 different coins, according to one of the main crypto sites, CoinMarketCap.
The reason why there are so many of them is that developers continue to find various use cases for both blockchain technology and cryptocurrencies. For example, the second most popular cryptocurrency, Ethereum (ETH), is not only used as a store of value, but also as a token that locks smart contracts and fuels the decentralized applications.
Moreover, Ethereum uses a second token, called GAS, which users can spend on transaction fees to pay for the services on the platform. This is called a utility token. These tokens perform security functions and keep the network safe from spams and DDoS attacks.
A lot of cryptocurrencies are created using Bitcoin’s protocol, which was open-sourced by its founder, Satoshi Nakamoto. Some developers perform a hard fork, making drastic changes on Bitcoin’s blockchain to create a separate one for their cryptocurrency. A third group builds the coins on top of existing blockchains.
Even though Bitcoin’s legacy can’t be disputed, the advances in technology have brought about many innovations in the way cryptocurrencies are designed. For example, the growing number of transactions slows the network down due to Bitcoin’s low scalability. New coins try to find solutions to increase the blockchain’s scalability and transaction throughput.
How to Invest in Crypto in the UK
For a lot of people, investing in crypto seems quite the challenge. In reality, you just need to take the time to familiarize yourself with the market, read online guides, and watch informative videos. Come up with a winning strategy, and find the platform that’s going to help you achieve that goal.
Now, in order to find the right cryptocurrency exchange, you need to take into account the following factors: the platform’s cryptocurrency selection, payments methods, transaction fees, any limits or discounts that apply to newly registered users, the liquidity and trading tools it provides, identity verification and security measures, etc.
Another important aspect is choosing between fiat to crypto and crypto to crypto exchange. We recommend the former for beginners, as you have the advantage of purchasing your first cryptocurrencies with fiat ones.
Finally, you get to pick between a trading platform, a broker, or a peer to peer exchange.
Trading platforms are the most popular choice among traders as they connect buyers and sellers so they can exchange currencies more quickly. They only charge a small transaction fee for the service but otherwise offer the coins at the current market rate.
Brokers are reliable platforms that instead of connecting buyers with sellers, buy the cryptocurrencies in advance at wholesale rates, and then add a margin on the market price. The only drawback is the lack of choice, as they only support risk-free coins with high liquidity.
If you really care about staying anonymous when purchasing cryptocurrencies, decentralized peer-to-peer exchanges might be your best choice.
Should You Invest in Cryptocurrency?
Our approach towards cryptocurrency is very straightforward, which is why we’ll discuss with you both the advantages and drawbacks of investing in crypto.
Both cryptocurrencies and blockchain technology have shown great potential and will definitely expand their applications to other fields besides finance very soon. Even now there are a number of projects working on finding use cases for this technology in healthcare, the insurance industry, supply chains, advertising, etc.
As far as our financial system is concerned, many people believe that cryptocurrencies are the future. Predictions such as “fiat currencies will soon become obsolete and replaced by digital money” no longer sound so far-fetched and outlandish.
On the other hand, the crypto market is still relatively small when compared to other world markets. Only prominent coins like Bitcoin and Ethereum have had more or less steady growth throughout the years, whereas altcoin’s prices tend to fluctuate. But experienced traders can turn even volatile currencies around with the right timing.
Another reason why some traders avoid cryptocurrencies is the growing number of the pump and dump traps. This happens when a cryptocurrency, usually an obscure one with low liquidity and market cap, gets talked up in order to trick inexperienced traders into investing.
When they do, they drive the price of the coin up, at which point the “tricksters”, who own most of these coins, sell them and put the other investors at a loss. However, by being aware of such cheap tricks lurking on the market, you’ll be smart not to fall for them.
How to Store Cryptocurrencies
A lot of traders make the common mistake of looking for a cryptocurrency wallet only after they’ve bought their first coins, instead of giving this a thought beforehand. Let’s take a look at the different types of wallets.
A quick note before we get started: cryptocurrency wallets don’t actually store your coins. Instead, they safeguard the private key that gives you access to your cryptocurrency address, i.e. your public key.
First, you have the software wallets, i.e. third-party wallets that you can download and install on your computer. Most of them are free and easy to configure, but they do require frequent backups. The only problem is that if your computer gets affected by malware and you haven’t stored your private key elsewhere, you lose your coins forever.
Next, we have online or cloud-based wallets that you can access from your computer or smartphone (if they provide a mobile app as well). Popular crypto exchanges usually feature a native digital wallet for their users and link it to their account. Depending on their security methods, some of them offer cold storage for your keys.
We recommend using online wallets only temporarily because you can’t rely completely on the provider’s security measures. If the site gets hacked and shuts down, you’ll remain empty handed.
However, if you need someplace to store the private key to your cryptocurrencies long-term, we encourage you to invest in getting a hardware wallet. This device, which looks a lot like a USB stick, stores your private key offline, protecting it from any greedy hands.