How to Buy Cryptocurrency in the UK (2025)
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Last updated: February 2025
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Quick Summary: 5 Steps to Buy Crypto
Here’s the basic process for buying cryptocurrency in the UK:
- Choose an FCA-registered exchange – Pick a platform that supports GBP deposits and complies with UK regulations
- Create and verify your account – Sign up and complete KYC checks with ID and proof of address
- Deposit GBP funds – Transfer money via bank transfer, debit card, or e-wallet
- Select and buy your cryptocurrency – Choose your coin and place your order
- Secure your crypto – Decide whether to store on the exchange or move to a private wallet
Step-by-Step Guide to Buying Cryptocurrency
Step 1 – Choose a Cryptocurrency Exchange
The first decision you’ll make is which platform to use. A cryptocurrency exchange is where you’ll buy, sell, and potentially store your digital assets.
When choosing an exchange, focus on these key factors:
- FCA registration – The platform should be registered with the Financial Conduct Authority for UK anti-money laundering compliance
- GBP support – Look for exchanges that accept pounds sterling and offer Faster Payments for quick deposits
- Trading fees – Typically range from 0.5% to 2% per transaction
- Security features – Two-factor authentication, cold storage, and a solid track record
- Coin selection – Make sure they offer the cryptocurrencies you want to buy
- Ease of use – Particularly important if you’re new to crypto
Here’s a comparison of the leading UK cryptocurrency exchanges:
| Platform | Min. Deposit | Trading Fee | Cryptocurrencies | FCA Registered | Best For |
|---|---|---|---|---|---|
| eToro | £40 | 1% | 90+ | Yes | Beginners |
| Coinbase | £0 | 1.49% | 250+ | Yes | Wide selection |
| Kraken | £0 | 0.16%-0.26% | 230+ | Yes | Low fees |
| Revolut | £1 | 1.49%-2.5% | 80+ | Yes | Banking integration |
| Uphold | £0 | 0.9%-1.2% | 250+ | Yes | Multi-asset trading |
Which Cryptocurrency Exchanges Are Best for UK Investors?
eToro – Ideal for beginners with a simple interface and copy-trading. Flat 1% fee, plus 0.5% GBP deposit conversion. Minimum £40. Supports 90+ cryptocurrencies, stocks, and other assets.
Coinbase – Best for coin variety with 250+ cryptocurrencies. Very secure (98% in cold storage) and beginner-friendly. Fees are higher at 1.49% per trade. Free bank transfers, 3.99% card deposit fee.
Kraken – Best for low fees and experienced users. Trading starts at 0.16% (maker) / 0.26% (taker), with discounts for volume. Offers 230+ cryptocurrencies and advanced tools. No major hacks since 2011, but interface is more complex.
Revolut – Convenient if you already use the app. Buy from £1 with smooth banking integration. Fees range 1.49–2.5%, and crypto withdrawals aren’t allowed on the free plan. Simple but limited.
Uphold – Good for multi-asset trading (250+ cryptos, metals, stocks, fiat). You can trade any asset to any other instantly. Fees are included in spreads (0.9–1.2%). Flexible but less ideal for crypto-only users.
Step 2 – Create and Verify Your Account
Once you’ve chosen an exchange, head to their website or download their app. The sign-up process takes just a few minutes.
You’ll need to provide:
- Your full name
- Email address
- Phone number
- Date of birth
- Residential address
After creating your account, you’ll need to verify your identity. This is called KYC (Know Your Customer) and it’s a legal requirement in the UK under anti-money laundering regulations.
For identity verification, you’ll need one of:
- UK passport
- UK driving licence
- National identity card (if you’re an EU citizen)
You’ll also need proof of address dated within the last three months:
- Utility bill
- Bank statement
- Council tax bill
Most platforms use automated verification. You’ll typically upload photos of your documents and take a selfie for facial recognition. The process usually completes within minutes, though it can take up to 24 hours during busy periods.
While verification is processing, set up two-factor authentication (2FA). This adds an extra layer of security by requiring a code from your phone when logging in. Use an authenticator app like Google Authenticator or Authy rather than SMS, as it’s more secure.
Step 3 – Deposit GBP Funds
With your account verified, you’re ready to add money. UK exchanges accept several payment methods, each with different speeds and costs.
Bank transfer is usually the cheapest option. Most UK platforms support Faster Payments, which means your money arrives within minutes to a few hours. Some exchanges charge no fee at all for bank deposits, making this the preferred method for larger amounts.
Debit card deposits are instant, letting you buy crypto immediately. However, card payments typically carry fees of 2-4% or more. Some banks also charge cash advance fees on crypto purchases, so check with your bank first. Visa and Mastercard are widely accepted.
E-wallets like PayPal, Skrill, or Neteller offer instant deposits. Fees vary by platform and wallet provider, usually falling between 1-3%. Not all exchanges support e-wallets, so check availability.
Here’s how the payment methods compare:
| Payment Method | Processing Speed | Typical Fee | Best For |
|---|---|---|---|
| Bank Transfer | Minutes to hours | Free – £1 | Larger deposits, cost savings |
| Debit Card | Instant | 2-4% | Quick purchases, small amounts |
| Credit Card | Instant | 3-5% | Generally not recommended |
| PayPal/E-wallet | Instant | 1-3% | Convenience, existing balance |
To make a bank transfer, you’ll need the exchange’s bank details including their sort code and account number. These are usually displayed in your account’s deposit section. Make sure to include any reference number they provide, as this helps them match the payment to your account.
Top tip: Bank transfers are almost always cheaper for amounts over £100. The few minutes of extra waiting time is worth the savings on fees.
Step 4 – Buy Your Cryptocurrency
Now comes the interesting bit – actually buying crypto. Navigate to the buy or trade section of your platform.
You’ll see a list of available cryptocurrencies. The most popular for UK buyers are:
- Bitcoin (BTC) – The original cryptocurrency and most widely recognised
- Ethereum (ETH) – The second-largest crypto, used for smart contracts and decentralised applications
- Ripple (XRP) – Focused on fast, low-cost international payments
- Litecoin (LTC) – Often called the silver to Bitcoin’s gold
- Cardano (ADA) – Known for its research-driven approach
Select the cryptocurrency you want to buy. You can usually enter either the amount in GBP you want to spend or the quantity of crypto you want to purchase.
Before confirming, you’ll see:
- The current price
- How much crypto you’ll receive
- Trading fees
- Any spread costs
- The total amount you’ll pay
Most beginners use a market order, which executes immediately at the current price. This is the simplest option and works well for most purchases.
More experienced traders might use a limit order, where you set the price you’re willing to pay. Your order only executes if the market reaches that price. This gives you more control but means your purchase might not happen immediately (or at all).
Example: Let’s say you want to buy £100 of Bitcoin on a platform with a 1% fee. You’d pay £100, the platform takes £1 as their fee, and you receive £99 worth of Bitcoin at the current market price. If Bitcoin is trading at £50,000, you’d get 0.00198 BTC.
Once you’re happy with the details, confirm your purchase. The crypto should appear in your account within seconds.
Step 5 – Secure Your Investment
After buying cryptocurrency, you need to decide how to store it. You have two main options: leave it on the exchange or move it to a private wallet.
Storing on the Exchange
Most beginners keep their crypto on the exchange, at least initially. This is the simplest option and makes sense if:
- You’re holding small amounts (under £500-1,000)
- You plan to trade or sell relatively soon
- You’re still learning about crypto
- You trust the exchange’s security
The downside is that you don’t fully control your crypto. If the exchange gets hacked or goes bankrupt, you could lose your funds. UK crypto exchanges aren’t covered by the Financial Services Compensation Scheme (FSCS), so there’s no government protection.
Using a Private Wallet
A wallet gives you full control over your cryptocurrency. There are two types:
Hot wallets are software-based and connect to the internet. They’re free and easy to use through apps on your phone or computer. Examples include Trust Wallet, MetaMask, and Exodus. Hot wallets are convenient but more vulnerable to hacking than cold storage.
Cold wallets are physical devices (like a USB stick) that store your crypto offline. Hardware wallets like Ledger and Trezor are the most secure option, costing £50-150. They’re best for larger amounts you plan to hold long-term.
Here’s how storage options compare:
| Storage Type | Security Level | Convenience | Best For |
|---|---|---|---|
| Exchange Storage | Medium | High | Small amounts, active traders |
| Hot Wallet (Software) | Medium-High | High | Regular users, moderate amounts |
| Cold Wallet (Hardware) | Very High | Low-Medium | Large amounts, long-term holding |
If you choose a private wallet, you’ll receive a recovery phrase (usually 12 or 24 words). Write this down and store it somewhere extremely safe. Anyone with this phrase can access your crypto, and if you lose it, your funds are gone forever. Never store it digitally or share it with anyone.
Security essentials:
- Enable 2FA on your exchange account
- Use a unique, strong password
- Never share your private keys or recovery phrase
- Be suspicious of anyone contacting you about crypto “opportunities”
- Double-check website URLs before entering login details
- Keep your devices updated with the latest security patches
Is Cryptocurrency Legal in the UK?
Yes, buying, owning, and selling cryptocurrency is completely legal in the United Kingdom. You can purchase crypto through registered exchanges, hold it as an investment, spend it where accepted, and sell it whenever you choose.
The Financial Conduct Authority (FCA) regulates certain crypto activities in the UK, particularly around anti-money laundering compliance. Any exchange operating in the UK must register with the FCA and follow strict rules about customer verification and financial crime prevention.
However, cryptocurrencies themselves aren’t classified as legal tender. You can’t use Bitcoin to pay your council tax or force a shop to accept it as payment. It’s treated more like a commodity or digital asset.
One important thing to understand: crypto investments aren’t protected by the Financial Services Compensation Scheme (FSCS). This is the scheme that protects up to £85,000 of your money if a bank or building society fails. If a crypto exchange goes under or gets hacked, you may lose everything with no government compensation.
The FCA has also banned the sale of crypto derivatives (like futures and options) to retail customers in the UK. This rule aims to protect ordinary investors from particularly risky financial products. You can still buy and sell the actual cryptocurrencies, just not derivatives based on them.
Always use FCA-registered platforms to ensure you’re dealing with a legitimate business that follows UK regulations.
Do You Pay Tax on Cryptocurrency in the UK?
Yes, you’ll likely owe tax on your cryptocurrency activities. HMRC treats crypto as property, not currency, which means it falls under Capital Gains Tax rules.
When do you owe tax?
You’ll trigger a taxable event when you:
- Sell cryptocurrency for pounds sterling (or any fiat currency)
- Exchange one cryptocurrency for another (even BTC to ETH)
- Use cryptocurrency to buy goods or services
- Gift cryptocurrency to someone (except to a spouse or civil partner)
Simply buying and holding crypto isn’t taxable. The tax liability only arises when you dispose of it.
Capital Gains Tax
For the 2024/25 tax year, you have a Capital Gains Tax allowance of £3,000. This means you can make up to £3,000 in profits from selling crypto (and other assets) without paying any tax.
Once you exceed this allowance, you’ll pay tax on the remaining gains:
- Basic rate taxpayers pay 10% on crypto gains
- Higher rate taxpayers pay 20% on crypto gains
Example calculation:
Tax Example:
• You buy £2,000 worth of Ethereum in January
• You sell it in November for £8,000
• Your gain is £6,000
• Subtract your £3,000 annual allowance = £3,000 taxable gain
• As a basic rate taxpayer, you pay 10% = £300 tax owed
• As a higher rate taxpayer, you pay 20% = £600 tax owed
Income Tax situations
Some crypto activities count as income rather than capital gains:
- Mining rewards
- Staking rewards
- Airdrops (in certain circumstances)
- Being paid in cryptocurrency for work
These are taxed as income at your marginal rate (20%, 40%, or 45% depending on your total income).
Record keeping
HMRC expects you to keep detailed records of all cryptocurrency transactions, including:
- Dates of purchases and sales
- Types of cryptocurrency involved
- Number of coins in each transaction
- Value in GBP at the time
- Transaction fees
- Exchange records
Keep these records for at least five years. You’ll need them to complete your Self Assessment tax return if your gains exceed the annual allowance or your total proceeds exceed £50,000.
Several crypto tax tools can help track your transactions and calculate your liability, including Koinly, CoinTracker, and Accointing. These connect to your exchanges and wallets to automatically generate tax reports.
What Are the Risks of Buying Cryptocurrency?
Main Risks:
Extreme volatility: Prices can rise or fall 10–20% in a day. Bitcoin fell from £50k in 2021 to under £15k in 2022.
Security threats: Hacks are possible, but more common are phishing scams, fake websites, and social engineering.
Loss of access = permanent loss: If you lose your wallet password or recovery phrase, your crypto is gone forever.
No consumer protection: Unlike bank accounts or ISAs, crypto isn’t covered by FSCS. If an exchange fails, you may lose everything.
Regulation uncertainty: Future laws could restrict crypto use or increase taxes.
Market manipulation: Pump-and-dump schemes and fake trading are common, especially with smaller coins.
Technology failures: Bugs, smart contract errors, or blockchain issues can wipe value.
How to Protect Yourself:
Only invest what you can afford to lose
Start small and use FCA-registered platforms
Enable 2FA and never share private keys or recovery phrases
Ignore unsolicited crypto offers and scams
Research before investing—avoid hype and FOMO
Treat crypto as a small part of a diversified portfolio
Crypto is like investing in early-stage startups—high risk, possible high reward, but you could lose everything.
Conclusion: Should You Buy Cryptocurrency Now?
Whether it’s the right time to buy crypto depends more on your financial situation and risk tolerance than market timing. Crypto is still highly volatile and unpredictable, so it should only be considered if you’re in a stable financial position and willing to accept potential losses.
You may be in a good position to buy if you:
Have 3–6 months of savings and no high-interest debt
Understand how cryptocurrency works and could afford to lose your investment
Can handle large price drops and hold for several years
Are using only spare money and see crypto as a small part of a diversified portfolio
However, avoid investing if you’d need the money soon, are using essential funds (like rent or emergency savings), don’t fully understand crypto, or feel pressured by friends, social media, or hype. While UK regulation and institutional interest are improving confidence in the industry, this doesn’t remove the risks. If you do choose to start, begin with a small amount—£50–£100 is enough to learn without risking too much.
Conclusion: Should You Buy Cryptocurrency Now?
The minimum varies by platform. Revolut lets you start with just £1, while Coinbase accepts purchases from around £2. eToro has a £40 minimum deposit but you can then buy crypto from £10 per trade. Most exchanges set minimums between £10-50 for individual purchases.
However, consider whether very small purchases make financial sense. A £5 purchase with a 1% trading fee means you start £0.05 down. Network fees for moving crypto between wallets can also eat into small holdings. Starting with at least £50-100 gives you a more meaningful position while still being affordable if you’re testing the waters.
The timeline depends on whether you’re starting fresh or have an existing account. Creating and verifying a new account typically takes 30 minutes to 24 hours. Most platforms now use automated ID verification that completes in minutes, though manual reviews can take longer during busy periods.
Once verified, bank transfers arrive within minutes to a few hours using Faster Payments. Card deposits are instant. The actual cryptocurrency purchase happens immediately – you’ll see it in your account within seconds of confirming the order.
So realistically, you could go from complete beginner to owning crypto in under an hour if verification goes smoothly and you use a card or instant bank transfer
Yes, selling cryptocurrency is the reverse of buying it. Log into your exchange, navigate to the sell section, choose how much to sell, and confirm. The proceeds will appear in your exchange account balance in GBP.
You can then withdraw this money to your UK bank account. Withdrawals usually process within a few hours to one business day. Most platforms charge minimal or no withdrawal fees for bank transfers.
Remember that selling creates a taxable event if you’ve made a profit. You’ll need to consider Capital Gains Tax on any gains above the annual £3,000 allowance.
No, you don’t need a separate wallet immediately. When you buy cryptocurrency on an exchange, it’s automatically stored in a wallet provided by that platform. For beginners and smaller amounts (under £500-1,000), keeping crypto on a reputable, FCA-registered exchange is fine.
Consider getting a separate wallet if you:
- Hold larger amounts (over £1,000-2,000)
- Plan to hold long-term (years rather than months)
- Want complete control over your private keys
- Feel uncomfortable leaving funds on an exchange
Hardware wallets offer the best security but cost £50-150. Free software wallets work well for moderate amounts. There’s no rush – you can always move crypto to a wallet later as your holdings grow.
References
- Bank of England – Research on Digital Currencies – https://www.bankofengland.co.uk/research
- Cambridge Centre for Alternative Finance – Global Cryptocurrency Study – https://www.jbs.cam.ac.uk/ccaf/
- The Times UK – Report on Crypto Adoption in the UK (2024) – https://www.thetimes.co.uk
- The Financial Conduct Authority (FCA) – UK Crypto Regulations – https://www.fca.org.uk/
- HMRC (UK Tax Regulations for Cryptocurrency) – https://www.gov.uk/government/publications/tax-on-cryptoassets
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