How to Buy Cryptocurrency in the UK
Explore our curated list of reputable exchanges to Cryptocurrency, each rigorously tested with real funds. All brokers are accessible to traders in the United Kingdom.
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.
To buy crypto in the UK, you’ll need to…
Choose a secure exchange, register, complete KYC verification, and deposit GBP. Purchase Bitcoin or altcoins, then store them in a secure wallet for safety. Always follow FCA regulations.
Buying Crypto in the UK Has Never Been Easier
When I first got into cryptocurrency, buying Bitcoin in the UK felt like navigating a maze. There were few trustworthy exchanges, regulations were unclear, and security was a constant worry. Fast forward to today, and things have changed dramatically. Crypto has gone from a niche asset to a mainstream investment, with millions of UK investors adding digital currencies to their portfolios.
If you’re just starting out, the process of buying cryptocurrency might seem overwhelming. But trust me—it’s never been easier. With a little guidance, you’ll be able to buy your first Bitcoin, Ethereum, or altcoin with confidence. In this guide, I’ll walk you through everything you need to know, from picking the right exchange to securing your investment.
Step-by-Step Guide to Buying Cryptocurrency in the UK
Step 1) Choosing a Reliable Crypto Exchange
Before you buy your first crypto, you need to pick a reliable exchange. This is the platform where you’ll buy, sell, and store your digital assets, so choosing the right one is crucial. I’ve used multiple exchanges over the years, and there are a few key factors that separate the best from the rest.
Why a Secure and FCA-Compliant Exchange Matters
Regulation is a big deal when it comes to crypto, especially in the UK. The Financial Conduct Authority (FCA) oversees certain aspects of cryptocurrency trading, mainly to ensure exchanges meet security and anti-money laundering standards. An FCA-regulated platform gives you peace of mind that your funds are protected, and you won’t run into issues withdrawing your money.
Security is another major consideration. I always look for exchanges that offer two-factor authentication (2FA), cold storage for funds, and insurance against hacks. If an exchange doesn’t take security seriously, I won’t risk my money there.
What to Look for in an Exchange
Every crypto exchange is different, so it’s important to find one that matches your needs. Here are the key factors I always consider:
- Fees: Some platforms charge a percentage of each trade, while others have fixed fees. Hidden charges can add up, so read the fine print.
- User Experience: A simple, well-designed platform makes buying crypto much easier—especially for beginners.
- Payment Methods: Most UK-friendly exchanges accept bank transfers, credit/debit cards, and PayPal, but fees can vary.
- Security: Look for FCA registration, insurance, and strong encryption.
- Selection of Cryptocurrencies: While Bitcoin and Ethereum are widely available, some platforms offer a broader range of altcoins.
Best Crypto Exchanges for UK Investors
Based on my experience and deep research at B31.tech, here’s how the top UK exchanges compare:
I personally recommend eToro for beginners because it’s FCA-regulated, easy to use, and offers copy trading, which lets you follow experienced traders. If you’re looking for a platform with a wider selection of altcoins, Binance is a great choice, but keep in mind that it’s not FCA-regulated.
Step 2) Registering and Verifying Your Account
Once you’ve chosen your exchange, the next step is setting up your account. Most exchanges follow a similar process, and while it might feel like a hassle, it’s essential for protecting your funds and complying with UK regulations.
Signing Up on an Exchange Step-by-Step
- Visit the exchange website and click on “Sign Up” or “Register.”
- Enter your email, create a password, and agree to the terms of service.
- Verify your email address by clicking the link sent to your inbox.
- Provide personal details (full name, date of birth, address) as part of the Know Your Customer (KYC) process.
- Upload identification (passport, driver’s license, or national ID card) to verify your identity.
- Enable two-factor authentication (2FA) for added security.
Identity Verification (KYC) Explained
Know Your Customer (KYC) verification is a legal requirement for regulated exchanges. It helps prevent fraud and ensures compliance with anti-money laundering (AML) regulations. While it may seem intrusive, it actually protects you by preventing criminals from abusing the platform.
Most exchanges require:
- A government-issued ID (passport, driver’s license, or national ID card).
- A recent utility bill or bank statement for proof of address.
- A selfie to match your ID for identity verification.
Security Tips: Enabling Two-Factor Authentication (2FA)
Enabling two-factor authentication (2FA) is one of the best ways to secure your account. I always recommend using an authenticator app (like Google Authenticator or Authy) instead of SMS, as SIM-swap attacks can compromise your phone number.
Step 3) Depositing Funds into Your Exchange Account
Once your account is set up and verified, you’ll need to deposit GBP to start buying cryptocurrency. Different exchanges offer various payment options, each with its own pros and cons.
Deposit Methods and Fees
If you want the lowest fees, a bank transfer is usually the best option, though it takes longer to process. If speed matters, using a debit/credit card or PayPal can get your funds on the exchange instantly, but with higher fees.
Step 4) Buying Your First Cryptocurrency
With your funds in place, it’s time to make your first crypto purchase.
If you’re new to crypto, a market order is the easiest way to buy. Just enter the amount you want to spend, and the exchange will execute the trade at the current price. A limit order is useful if you want to wait for a better price, but there’s no guarantee the price will drop to your set level.
Step 5) Storing Cryptocurrency Securely
Once you’ve bought your crypto, you need to store it safely. Leaving your assets on an exchange is convenient but risky.
Storage Options
For maximum security, I recommend transferring your assets to a cold wallet like a Ledger or Trezor. If you plan to trade frequently, a hot wallet like MetaMask or Trust Wallet is a good option, but be aware of potential online threats.
What are the different types of Cryptocurrency? And How do they differ?
When I first got into crypto, I quickly realised that knowing what you’re investing in is just as important as deciding where to put your money. It’s easy to get caught up in the hype, but understanding the basics will help you make smarter choices.
At its core, cryptocurrency runs on blockchain technology—basically, a super-secure digital ledger that records transactions across a network of computers. Because it is decentralised, no single entity (like a bank) controls it. Once a transaction is recorded, it is locked in for good—no edits, no take-backs.
Not all cryptocurrencies are the same, though. Bitcoin (BTC) was the first and remains the most popular, often called “digital gold” because it’s seen as a long-term store of value. Then you’ve got altcoins (alternative cryptocurrencies) like Ethereum (ETH), which powers smart contracts—essentially self-executing digital agreements. There are also stablecoins like USDT and USDC, which are tied to real-world currencies like the US dollar, making them a more stable option for payments and savings.
Choosing the Right Cryptocurrency to Buy
With thousands of cryptocurrencies available, choosing the right one can be overwhelming. Bitcoin vs. altcoins is the first decision many investors face. While Bitcoin is the most established and widely accepted, altcoins offer diverse functionalities, from smart contracts to privacy-focused transactions.
When evaluating cryptocurrencies, consider:
- Market Capitalization: A higher market cap often indicates stability and widespread adoption.
- Utility: Does the cryptocurrency solve a real-world problem? Ethereum, for example, powers decentralized apps and smart contracts.
- Security: The network’s security is crucial—look for assets with robust consensus mechanisms like Bitcoin’s Proof-of-Work or Ethereum’s upcoming Proof-of-Stake.
Diversification is key to managing risk. A balanced crypto portfolio might include Bitcoin for stability, Ethereum for growth potential, and smaller-cap altcoins for high-risk, high-reward opportunities. Stablecoins can act as a hedge against volatility, providing a way to hold value without exposure to market swings.
Investment Strategies for UK Crypto Buyers
Investing in cryptocurrency requires a strategy that aligns with your risk tolerance and financial goals. The two main approaches are:
- HODLing (Long-Term Holding): Buying and holding crypto for years, believing in its long-term growth. This strategy works best for Bitcoin and established altcoins.
- Short-Term Trading: Active buying and selling to capitalize on price fluctuations. While potentially profitable, it requires skill, experience, and a deep understanding of market trends.
For those looking to generate passive income, staking and DeFi (Decentralized Finance) yield farming offer opportunities to earn rewards. Staking involves locking up assets to support network security in exchange for rewards, while yield farming lets investors provide liquidity to DeFi platforms for potential returns.
Avoiding common mistakes is crucial. Many beginners fall into the trap of panic selling during market dips or chasing hype-driven coins without proper research. Sticking to a well-researched strategy, diversifying assets, and managing risk effectively can lead to a more successful crypto investment journey.
Whether you’re just starting or looking to refine your approach, understanding these fundamentals will help you make informed investment decisions in the UK crypto market.
Regulations and Tax Considerations in the UK
Cryptocurrency is completely legal in the UK, but it is subject to specific regulations. The Financial Conduct Authority (FCA) is the primary regulator overseeing crypto-related activities, ensuring that exchanges and service providers comply with anti-money laundering (AML) and consumer protection laws. While the FCA does not regulate cryptocurrencies themselves, it does require exchanges to be registered for compliance purposes.
One of the most important tax considerations for UK crypto investors is Capital Gains Tax (CGT). If you sell, trade, or dispose of cryptocurrency at a profit, you are required to report and pay CGT on the gains. The exact tax rate depends on your income bracket:
To stay compliant, it’s essential to track all transactions, including purchases, trades, and sales. HMRC requires detailed records, including dates, amounts, and counterparties. There are several tools available, such as Koinly and CoinTracker, that can automate the process of tracking and reporting crypto taxes.
Using an FCA-registered exchange provides additional security and ensures compliance with UK financial regulations. These platforms follow strict guidelines to protect users and maintain transparency, reducing the risk of fraud and fund mismanagement.
Final Thoughts: Taking the First Step in Crypto Investing
Investing in cryptocurrency can be exciting and rewarding, but it’s important to approach it with caution. Here’s a quick recap of the key steps to buying crypto safely:
- Choose a reliable, FCA-registered exchange.
- Set up and verify your account.
- Deposit funds and choose your preferred cryptocurrency.
- Store your crypto securely in a private wallet.
- Stay informed about tax obligations and regulatory changes.
Security is a top priority—using strong passwords, enabling two-factor authentication (2FA), and withdrawing long-term holdings to a cold wallet can help safeguard your investments.
If you’re ready to take the next step, start by researching exchanges, learning about different cryptocurrencies, and making a small, well-researched purchase.
FAQs
The safest way to store crypto is in a cold wallet (hardware wallet), such as Ledger or Trezor. These wallets keep your private keys offline, making them highly resistant to hacks.
Yes, some exchanges like eToro and Coinbase allow UK users to buy cryptocurrency using PayPal. However, fees may be higher compared to other payment methods.
You can sell your cryptocurrency on an exchange and withdraw the funds to your bank account via bank transfer, PayPal, or debit card. Processing times and fees vary by exchange.
Yes, you must pay Capital Gains Tax (CGT) on crypto profits. If you earn income from crypto (such as staking or mining), it may be subject to Income Tax.
If your exchange is hacked, your funds may be at risk. Using FCA-registered exchanges with strong security measures reduces this risk. For added protection, store crypto in a private wallet rather than leaving it on an exchange.
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
Choose the Best
- Copy Trading Feature
- Low Fees
- Multi-Asset 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.
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.
