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How to Invest in Cryptocurrency in the UK

Tobi Opeyemi Amure
Reviewed by:
How to invest in cryptocurrency UK

In a nutshell, the easiest way to invest in cryptocurrency in the UK is to buy it online from a crypto exchange, such as eToro, Coinbase, or Uphold. Crypto exchanges make it easy to buy and sell crypto directly from your smartphone, tablet, or computer.

I remember when I first bought crypto, it was overwhelming and I felt out of my depth.

If you’re feeling confused or simply looking for where to invest in cryptocurrency, this guide is for you.

I will walk you through the process step-by-step, ensuring you can safely buy cryptocurrency with confidence.

I’ll cover key aspects like selecting the right exchange, payment methods, and security precautions.

Top pick
eToro - Best place to buy crypto

eToro is trusted by over 30 million users worldwide. It's the best place to buy crypto in the UK due to its cold storage, innovative trading features, user-friendly GBP deposit options, and industry-leading fees.

Don’t invest unless you’re prepared to lose all the money you invest.
This article was reviewed by Tobi Opeyemi Amure, a cryptocurrency expert and writer at InvestopediaInvesting.com, and Trading.biz.

How to Invest in Cryptocurrency in the UK

Here’s a quick step-by-step guide on how to invest in crypto:

  1. Register with a cryptocurrency exchange: Choose a reputable exchange and complete the registration process, which typically includes verifying your identity and setting up security measures.
  2. Deposit GBP into your newly created account: Add funds to your exchange account using a bank transfer or a credit/debit card, ensuring you have sufficient balance for trading.
  3. Conduct thorough research on various cryptocurrencies: Explore the market, read about different cryptocurrencies, understand their technology, market trends, and risks associated with each.
  4. Purchase the cryptocurrencies of your choice: Utilise your funded account to buy cryptocurrencies. You can place market orders for immediate purchase or limit orders to buy at a specific price.
  5. Set up a crypto wallet, for instance, Coinbase Wallet or eToro Money Wallet: Create a digital wallet to store your cryptocurrencies securely. Choose a wallet that offers robust security features and is compatible with the cryptocurrencies you own.
  6. Either transfer your crypto to the wallet for storage or keep it on the exchange: Decide based on your needs, transfer to a wallet for added security and long-term holding, or keep it on an exchange for ease of access and trading.

Where to Invest in Crypto in the UK?

In the UK, you can buy cryptocurrency through platforms such as eToro, Coinbase, and Uphold.

These services offer a variety of digital currencies and provide secure, user-friendly environments for buying, selling, and trading cryptocurrencies.

Each platform has its own set of features and fees, catering to different levels of cryptocurrency investors and traders.

Below, I’ve put together my top picks of platforms for buying crypto in the UK.

Top pick
  • 4.5
  • eToro is trusted by over 30 million users worldwide. It's the best place to buy Bitcoin in the UK due to its cold storage, innovative trading features, user-friendly GBP deposit options, and industry-leading fees.

  • Don’t invest unless you’re prepared to lose all the money you invest.
Runner-up
  • Don’t invest unless you’re prepared to lose all the money you invest.
Large selection of altcoins
  • Don’t invest unless you’re prepared to lose all the money you invest.
Top pick
4.5

eToro is trusted by over 30 million users worldwide. It's the best place to buy Bitcoin in the UK due to its cold storage, innovative trading features, user-friendly GBP deposit options, and industry-leading fees.

Don’t invest unless you’re prepared to lose all the money you invest.
Runner-up
4.4

Simple to use exchange to buy Bitcoin in the UK. Over 240 cryptocurrencies to choose from and a secure self-custody crypto wallet to use.

Don’t invest unless you’re prepared to lose all the money you invest.
Large selection of altcoins
4.4

Uphold is the easiest way to buy, sell, and stake cryptocurrency in the UK. A secure and transparent platform with over 250 assets.

Don’t invest unless you’re prepared to lose all the money you invest.

How to Invest in Cryptocurrency UK – Step-by-Step Guide

In case you want more detail, here’s a more comprehensive step-by-step guide on how to invest in cryptocurrency in the UK:

1. Register with an exchange

Choosing an exchange: Research to find a reputable cryptocurrency exchange that suits your needs. Look for factors like security, user interface, transaction fees, and available cryptocurrencies.

Creating an account: Visit the chosen exchange’s website or app. Click on the registration or sign-up option.

Verification process: Provide necessary personal information like name, email address, and a secure password. You’ll likely need to verify your identity for security purposes, which could include uploading a government-issued ID.

Securing your account: Set up two-factor authentication (2FA) for an added layer of security. This usually involves linking a phone number or an authenticator app to your account.

Top pick
eToro - Best place to buy crypto

eToro is trusted by over 30 million users worldwide. It's the best place to buy crypto in the UK due to its cold storage, innovative trading features, user-friendly GBP deposit options, and industry-leading fees.

Don’t invest unless you’re prepared to lose all the money you invest.

2. Deposit GBP into your newly created account

Linking payment method: Link a bank account or a card to your exchange account. Ensure that your bank permits transactions with cryptocurrency platforms.

Making a deposit: Choose the option to deposit funds and select GBP as the currency. Enter the amount you wish to deposit and confirm the transaction. Be aware of any deposit fees or limits.

Transaction processing: Wait for the transaction to be processed. Transfer times can vary depending on the chosen method and your bank’s processing speed.

3. Conduct thorough research on various cryptocurrencies

Understanding the market: Learn about the cryptocurrency market dynamics, including how different factors like regulations, market news, and technological advancements can affect prices.

Researching individual cryptocurrencies: Study various cryptocurrencies, their purpose, technology, market performance, and potential risks. Utilise resources like whitepapers, forums, and financial news sites.

Risk assessment: Assess your risk tolerance and investment goals. Cryptocurrency investments can be volatile, so understanding your comfort with risk is crucial.

4. Purchase the cryptocurrencies of your choice

Exploring the exchange: Navigate the trading interface of your chosen exchange. Understand the different types of orders, such as market orders, limit orders, and stop orders.

Executing a purchase: Choose the cryptocurrency you want to buy, and decide on the amount. Review the current market price and transaction fees.

Finalising the purchase: Confirm your purchase order. Monitor your account to ensure that the transaction is completed successfully and the cryptocurrency is credited to your account.

5. Set up a crypto wallet, for instance, Coinbase Wallet or eToro Money Wallet

Choosing a wallet: Decide between a hardware wallet for maximum security or a software wallet for convenience. Consider compatibility with your cryptocurrencies and security features.

Creating a wallet: Follow the instructions provided by the wallet service to create your wallet. This may involve downloading software or purchasing a physical device.

Wallet security: Secure your wallet with a strong password, back up your wallet recovery phrase, and enable any additional security features available.

You can see my guide on the best crypto wallets in the UK here to help you with this step.

6. Either transfer your crypto to the wallet for storage or keep it on the exchange

Evaluating storage options: Assess the benefits and risks of leaving cryptocurrencies on the exchange (easier access for trading, potential risk from hacking) versus transferring them to a private wallet (enhanced security, less flexibility for quick trades).

Transferring to a wallet: If you choose to use a wallet, generate a receive address from your wallet, and use this to transfer the crypto from your exchange account to your wallet.

Regular monitoring: Regardless of your choice, regularly monitor your investments and stay updated on market conditions and security practices.

If you plan on using or trading your crypto soon, and it’s a small amount, you might be fine leaving it on the exchange. However, I recommend moving it into a more secure hardware wallet.

What Is Cryptocurrency?

Before diving into what exactly crypto is, here are some interesting statistics that highlight its growth.

  • As of 2023, nearly 4.97 million people in the UK hold some form of crypto asset, which is nearly 10% of the population1.
  • The revenue in the cryptocurrency market in the UK is projected to reach US$1.89bn in 2023, with an annual growth rate of 18.84%2.
  • Almost 500 businesses in the UK accept cryptocurrency as a payment method3.

As you can see, crypto is gaining traction in the UK and reshaping the financial scene daily4, so what exactly is it?

Cryptocurrency is a digital or virtual form of currency that utilises cryptography to secure financial transactions, control the creation of new units, and verify the transfer of assets.

Unlike traditional fiat currencies issued by governments, cryptocurrencies operate on decentralised networks, typically based on blockchain technology.

They use a distributed ledger called a blockchain, which is a transparent and immutable record of all transactions across the network. This decentralised nature eliminates the need for intermediaries like banks and allows for peer-to-peer transactions.

They are not controlled or regulated by any central authority, such as a government or financial institution. Instead, transactions and the issuance of new units are governed by consensus mechanisms and cryptographic algorithms.

Bitcoin, created by an anonymous person or group known as Satoshi Nakamoto, was the first cryptocurrency and remains the most well-known and valuable.

However, since the introduction of Bitcoin, thousands of other cryptocurrencies, commonly referred to as altcoins, have emerged, each with its features and purposes.

Cryptocurrencies offer various potential advantages, including increased privacy, reduced transaction fees, faster cross-border transactions, and the potential for financial inclusion in underserved populations.

However, they also come with risks, such as price volatility, regulatory uncertainties, and the potential for fraud or hacking.

Overall, cryptocurrency represents a digital form of money that leverages cryptographic principles and decentralised networks to enable secure, transparent, and efficient financial transactions in the digital age.

What to Consider Before Investing in Cryptocurrency

The decision to invest in cryptocurrency depends on various factors, including your risk tolerance, investment goals, and understanding of the cryptocurrency market.

Here are some key points to consider when evaluating cryptocurrency as an investment:

  1. Volatility: Cryptocurrencies, such as Bitcoin and Ethereum, are known for their high price volatility. Prices can fluctuate significantly within short periods, which can lead to potential gains but also substantial losses. It’s essential to be prepared for the inherent volatility of the market.
  2. Potential Returns: Cryptocurrencies have delivered substantial returns for some investors in the past. However, past performance is not indicative of future results. While there have been notable success stories, it’s crucial to approach cryptocurrency investments with realistic expectations and avoid excessive speculation.
  3. Diversification: Cryptocurrency can be considered as a part of a diversified investment portfolio. Diversification helps spread risk by investing in a range of assets across different sectors and markets. Including cryptocurrencies, alongside traditional investments like stocks and bonds, may provide potential diversification benefits.
  4. Regulatory Environment: The regulatory landscape surrounding cryptocurrencies is still evolving. Regulatory changes or government actions can significantly impact the cryptocurrency market and investor sentiment. Staying informed about regulatory developments is crucial when considering cryptocurrency investments.
  5. Risk Factors: Cryptocurrencies face various risks, including hacking incidents, security breaches, regulatory uncertainties, and market manipulation. It’s important to understand these risks and take appropriate measures to secure your investments, such as using secure wallets and practicing good cybersecurity habits.
  6. Research and Education: Before investing in cryptocurrencies, it’s advisable to conduct thorough research and educate yourself about the technology, underlying projects, and market dynamics. Understanding the fundamentals and evaluating the long-term viability of specific cryptocurrencies can help make more informed investment decisions.
  7. Time Horizon: Consider your investment time horizon. Cryptocurrency markets can experience short-term volatility, but their long-term potential is still debated. If you’re investing with a longer-term perspective, you may be more resilient to short-term price fluctuations.

Investing in cryptocurrency involves risks and rewards. It’s important to approach it with caution, conduct thorough research, and only invest what you can afford to lose.

What Are the Risks of Cryptocurrency Investing?

Cryptocurrency investing carries several risks that potential investors should be aware of. Understanding these risks is crucial for making informed investment decisions.

Here are some key risks associated with cryptocurrency investing:

Price Volatility: Cryptocurrencies are known for their price volatility. Prices can experience significant fluctuations within short periods, leading to potential gains or losses. Sudden market movements can be influenced by various factors, including market sentiment, regulatory announcements, technological advancements, or macroeconomic events.

Regulatory and Legal Risks: The regulatory environment for cryptocurrencies is still evolving and varies across jurisdictions. Changes in regulations or government actions can impact the legality, usage, and value of cryptocurrencies. Regulatory interventions, such as bans, restrictions, or increased scrutiny, can affect market sentiment and liquidity.

Security Risks: Cryptocurrencies face security risks due to hacking incidents, scams, and vulnerabilities in exchanges or wallets. Cyberattacks targeting exchanges or individuals can result in the loss of funds. It’s important to employ robust security measures, such as using reputable exchanges, implementing strong passwords, enabling two-factor authentication, and using hardware wallets to store cryptocurrencies securely.

Market Manipulation: The cryptocurrency market is relatively young and less regulated compared to traditional financial markets. This lack of regulation can make it susceptible to market manipulation, such as pump-and-dump schemes or price manipulation by influential actors. Manipulative practices can distort prices and mislead investors.

Operational Risks: Cryptocurrency platforms may face operational risks, including technical issues, system failures, or security breaches. These incidents can lead to disruptions in trading, delayed transactions, or loss of funds. It’s important to choose reputable and well-established platforms with a strong track record in security and reliability.

Lack of Fundamental Value: The value of cryptocurrencies is primarily driven by market demand and speculation. Unlike traditional assets such as stocks or bonds, cryptocurrencies may lack intrinsic value based on cash flows or underlying assets. Price movements can be influenced by market sentiment, media coverage, or hype, which can lead to speculative bubbles or rapid price declines.

Liquidity Risk: Cryptocurrency markets can be relatively illiquid compared to traditional financial markets. Some cryptocurrencies may have lower trading volumes, which can impact price stability and the ability to buy or sell assets at desired prices. Low liquidity can also make it challenging to exit positions during times of market stress.

Diversification, risk management strategies, and consulting with financial professionals can help mitigate some of these risks and increase the likelihood of making informed investment decisions.

Tips for Investing in Cryptocurrency Safely in the UK

  • Choose a reputable cryptocurrency exchange: Select a well-established and regulated cryptocurrency exchange operating in the UK. Look for exchanges with a strong track record, positive user reviews, and regulatory compliance.
  • Prioritise security features: Opt for exchanges that offer robust security measures, such as two-factor authentication (2FA) and cold storage for funds. 2FA adds an extra layer of protection to your account, while cold storage keeps your cryptocurrencies offline and secure from potential hacks.
  • Research the exchange’s reputation: Before registering with an exchange, research its reputation and history. Check for any security incidents, hacks, or negative reviews that could raise concerns about the exchange’s reliability and security practices.
  • Use a separate cryptocurrency wallet: Consider using a separate wallet, such as a hardware wallet, to store your purchased cryptocurrencies. Hardware wallets provide offline storage and greater security for your private keys, reducing the risk of online threats.
  • Verify the exchange’s regulatory compliance: Ensure the exchange is regulated by reputable financial authorities in the UK, such as the Financial Conduct Authority (FCA). Regulatory oversight adds an extra layer of protection for consumers and helps ensure compliance with relevant regulations.
  • Practice due diligence: Conduct thorough research on the cryptocurrencies you intend to buy. Assess their underlying technology, use cases, development team, and potential risks. Understanding the fundamentals of a cryptocurrency can help you make informed investment decisions.
  • Keep software and devices secure: Maintain up-to-date antivirus software, firewalls, and operating systems on the devices you use for cryptocurrency transactions. Regularly update your passwords and be cautious of phishing attempts and suspicious links or attachments.
  • Start with small investments: Consider starting with smaller investment amounts until you become more familiar with the cryptocurrency market. This approach allows you to gain experience and understand the potential risks before committing larger sums of money.
  • Stay informed: Keep yourself updated with the latest news, trends, and regulatory developments in the cryptocurrency space. Stay vigilant and be aware of potential risks associated with the market, such as scams, fraudulent schemes, or market manipulation.
  • Consider professional advice: If you’re new to cryptocurrency investing or uncertain about the process, consider seeking advice from a financial advisor or consulting with professionals specialising in cryptocurrency investments. Their expertise can provide valuable insights tailored to your circumstances.

Yes, it is legal to buy cryptocurrency in the UK. Cryptocurrency transactions, including buying and selling cryptocurrencies, are generally considered legal activities in the UK. The UK government has not imposed any specific bans on owning or trading cryptocurrencies.

However, it’s important to note that the regulatory landscape for cryptocurrencies in the UK is still evolving. Cryptocurrency-related activities are subject to regulatory oversight, and certain obligations may apply to individuals and businesses operating in the cryptocurrency space.

The UK’s regulatory authority responsible for overseeing cryptocurrency activities is the Financial Conduct Authority (FCA). The FCA has provided guidelines and regulations for cryptocurrency businesses to ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) requirements.

Cryptocurrency exchanges and other service providers are required to register with the FCA and adhere to these regulations.

How Can I Buy Cryptocurrency in the UK?

To buy cryptocurrency in the UK, follow these steps:

  1. Sign up for an account on a cryptocurrency trading platform like eToro, Coinbase, or Uphold.
  2. Complete the verification process for your identity and add funds to your account in GBP.
  3. Explore and learn about various cryptocurrencies, including Bitcoin and Ethereum.
  4. Buy the cryptocurrency of your choice through the crypto exchange’s website or app.
  5. Select and set up a digital wallet, such as Exodus or Trust Wallet, for storing your crypto.
  6. Move your cryptocurrency to your wallet for security.

Final Thoughts

Investing in cryptocurrency in the UK can offer exciting opportunities but requires careful consideration.

By following the steps outlined in this article, such as choosing reputable exchanges, prioritising security, conducting thorough research, and staying informed, you can approach cryptocurrency investing with greater confidence.

Remember to assess your risk tolerance, start with small investments, and seek professional advice when needed.

With proper knowledge and a cautious approach, cryptocurrency investment in the UK can be a rewarding venture in the ever-evolving world of digital assets.

Top pick
eToro - Best place to buy crypto

eToro is trusted by over 30 million users worldwide. It's the best place to buy crypto in the UK due to its cold storage, innovative trading features, user-friendly GBP deposit options, and industry-leading fees.

Don’t invest unless you’re prepared to lose all the money you invest.

FAQs

How do beginners invest in cryptocurrency UK?

Beginners in the UK can invest in cryptocurrency by first choosing a reputable, user-friendly crypto exchange. After registering and verifying their account, they can fund it with GBP, and then start purchasing cryptocurrencies, often starting with well-known options like Bitcoin or Ethereum. Beginners need to conduct thorough research and consider starting with smaller investments to understand the market dynamics.

How much should I first invest in crypto?

The amount you should invest in crypto depends on your financial situation and risk tolerance. It’s generally recommended to start with an amount you are comfortable with and can afford to lose, considering the volatility of the crypto market. For some people that may be between 1% and 5% of your entire investment portfolio.

What is the best way to invest in cryptocurrency in the UK?

The best way to invest in cryptocurrency in the UK is to use a well-known and regulated cryptocurrency exchange that caters to UK residents. Complete the registration and identity verification process, and then deposit GBP using bank transfer, credit card, or other supported payment methods. After your account is funded, select from the available cryptocurrencies to make your investment.

What is the safest way to invest in cryptocurrency in the UK?

The safest way to invest in cryptocurrency in the UK is to use a reputable, regulated cryptocurrency exchange that adheres to local laws and offers strong security measures, such as two-factor authentication (2FA). Complete the required identity verification and deposit GBP through secure payment options like bank transfers. After purchasing your chosen cryptocurrency, consider transferring it to a private wallet for added security.

How much to invest in crypto per month?

When deciding how much to invest in crypto each month, consider a percentage of your disposable income that aligns with your risk tolerance, typically 5-10% for cautious investors. Ensure this investment does not hinder your ability to cover essential expenses and savings. Adjust this percentage based on changes in your financial situation and market trends, keeping in mind that cryptocurrency investments are volatile and high-risk.

How to safely invest in cryptocurrency?

To invest safely in cryptocurrency, choose a reputable and secure exchange platform. Diversify your investments across various cryptocurrencies to mitigate risk. Always stay informed about market trends and cybersecurity practices. Remember, only invest funds you can afford to lose, as crypto investments can be highly volatile.

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Sources:

  1. https://www.fca.org.uk/publication/research-notes/research-note-cryptoasset-consumer-research-2023-wave4.pdf ↩︎
  2. https://www.statista.com/outlook/dmo/fintech/digital-assets/cryptocurrencies/united-kingdom ↩︎
  3. https://uk.style.yahoo.com/most-popular-cryptocurrency-2021-uk-093057693.html ↩︎
  4. https://www.cam.ac.uk/research/news/study-highlights-growing-significance-of-cryptocurrencies ↩︎
eToro is trusted by over 30 million users worldwide for buying crypto. It's the #1 crypto exchange in the UK.
Visit eToro
Don’t invest unless you’re prepared to lose all the money you invest.

Will Fenton is the founder of Sterling Savvy. He is a personal finance expert and writes about trading, investing, budgeting, and other financial topics.

Along with his education in Economics & Finance, he has experience working in the financial services industry in London working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”.

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