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Investing in Cryptocurrencies in Five Steps
Step 1 — Find a suitable cryptocurrency exchange. You'll need to find a provider that is secure, regulated by the Financial Conduct Authority (FCA), and offers the cryptocurrencies you want to buy. Some popular exchanges include eToro, Binance, and Crypo.com.
Step 2 — Create an account. Almost every cryptocurrency exchange that allows you to buy coins with your pounds requires you to verify your identity with a government-issued ID. You may also need to submit your email address, phone number, and proof of address.
Step 3 — Fund your account. Some exchanges may require you to deposit a certain amount of money to verify your account. In any case, you should fund your account with enough money to buy your preferred coin. Many providers accept Apple Pay, Google Pay, and PayPal along with card payments and bank transfers.
Step 4 — Choose the cryptocurrency you'd like to buy and place your order. Once you fund your account, browse through the listed coins and choose the one you'd like to purchase, the most popular coins include Bitcoin, Ethereum, and Tether. After you choose the right one, decide how much you'd like to invest and place your order.
Step 5 — Store your cryptocurrencies. You should store your cryptocurrencies in a secure wallet after you buy them. Many exchanges offer their own wallets to store coins in.
Disclaimer: 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 minutes to learn more.
List of Cryptocurrency Investing Platforms
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 8.7 | Visitetoro.com | Don’t invest unless you’re prepared to lose all the money you invest. | |
 | 8.4 | Visitcoinbase.com | ||
 | 8.4 | Visituphold.com | ||
 | 7.8 | Visitbitpanda.com | ||
 | 7.6 | Visitkraken.com | ||
 | 6.5 | Visitcoinjar.com | ||
 | 6.8 | Visitbitstamp.net |
Where to Buy Cryptocurrency in the UK
When looking for different ways to invest in cryptocurrency in the UK, you can always have the option to buy cryptocurrencies and below we show some options where you can buy cryptocurrency in the UK.
Centralised Exchanges
These crypto exchanges are an option Centralized exchanges (CEXs) are the preferred way of investing in cryptocurrency in the UK because of the convenient services provided. Crypto exchanges like Coinbase and Binance connect traders together using an order book system, which is displayed in the trading software. CEXs ensure that investors of all calibres are welcome by providing specific methods to buy cryptocurrency. Beginners will find the instant buy or convert feature easy to understand, while experts can use spot trading with indicators and trading tools.
Furthermore, cryptocurrency exchanges provide many investment activities once you have bought crypto. Staking is the most popular since it doesn’t require much effort to get started, and the rewards are great depending on the crypto. Alternatively, you can lend or mine crypto using the crypto exchange.
Best Centralised Exchanges in the UK
Provider | Fees |
|---|---|
🥇 Coinbase | Starts from 0.6%; varies based on trading volume |
🥈 Crypto.com | Starts from 0.075%; varies based on trading volume |
🥉 Kraken | Starts from 0.26%; varies based on trading volume |
Cryptocurrency Brokers
Cryptocurrency brokers are perhaps easier to get started investing in cryptocurrency in the UK since they feature simplistic trading interfaces and fast sign-up times. However, brokers issue CFDs (contracts for differences), a derivative product, instead of selling real crypto. This means you’ll be able to invest in your desired cryptocurrency without actually owning it. Also, crypto brokers don’t offer many features you’d find on other investment platforms, like staking and cryptocurrency withdrawals. eToro is the only exception, offering these services.
A huge advantage of brokers is they specialize in multiple markets. Therefore, you can diversify your portfolio with crypto, stocks, and commodities. We listed below the best crypto brokers in the UK you would like
Best Cryptocurrency Brokers in the UK
Provider | Fees |
|---|---|
🥇 eToro | 1% fee for buying or selling crypto |
🥈 Eightcap | Fees vary based on spreads |
Decentralised Exchanges
Decentralised exchanges (DEXs) are perfect when looking for an option to buy cryptocurrency anonymously. DEXs have no sign-up process, nor do they require user identification to trade. They function autonomously using smart contracts and community support, which is done by utilizing liquidity pools. Also, this means DEXs are not regulated, so you should only use popular platforms that have been verified to be trustworthy.
Swapping tokens is straightforward with a DEX since many provide a simple conversion service. Moreover, like CEXs, decentralized crypto exchanges allow staking and crypto lending, so you can earn interest on your crypto.
Best Decentralised Exchanges in the UK
Provider | Fees |
|---|---|
🥇 PancakeSwap | 0.25% trading fee |
🥈 UniSwap | 0.30% trading fee |
🥉 dYdX | Starting at 0%; varies based on trading volume |
P2P Services
Peer-to-peer services let you buy cryptocurrency directly from the seller and avoid third-party platforms like exchanges. The seller will list the coins they’re selling and at which price. Also, you will see the minimum and maximum amount you can buy cryptocurrency with that seller. You can accept the terms or continue searching for a better deal. To ensure trustworthiness, the seller will have a profile disclosing their past trades. Alternatively, some P2P services will verify sellers.
Best P2P Services in the UK
Provider | Fees |
|---|---|
🥇 LocalCryptos | 0.75% buying fee |
🥈 HODL HODL | 0.30% trading fee |
🥉 Bisq | 0.88% buying fee |
Different Ways to Invest in Cryptocurrencies
This section highlights the different ways to invest and buy cryptocurrencies in the United Kingdom.
The most common way to invest in cryptocurrency in the UK is by buying it from cryptocurrency exchanges and DEXs. These services offer various useful features for investors, like staking, spot trading, and leverage trading. Also, you can withdraw coins to a cryptocurrency wallet for better storage. If you would like to learn more, take a look at the guide we created on the best crypto exchanges in the UK.
Buy ETPs
ETPs (exchange-traded products) are securities you’d find on a stock exchange. The ETP provider will state how it's backed, usually with the same crypto. For example, Bitcoin ETPs are backed with BTC. VanEck and 21shares are great platforms for this investment style.
Invest in Crypto Companies
Moreover, you can indirectly invest in cryptocurrency in the UK by buying stocks associated with the cryptocurrency market. Below are a few companies you can invest in now with eToro.
PayPal
Nvidia
Coinbase
The UK's Financial Conduct Authority (FCA) banned the use of CFDs with cryptocurrencies for retail traders in 2020. The regulatory body announced that it deems cryptocurrency CFDs to be too risky for retail customers, and wishes to prevent the serious harm investors may receive due to "sudden and unexpected losses". This means that any cryptocurrency exchange or broker that offers crypto CFD trading is either unauthorised or engages in illegal activities.
Comparing UK Cryptocurrency Exchanges
The main aspects to look into when selecting a platform to invest in cryptocurrency in the UK are:
Coin variety: Ensure the platform has all the coins you want to buy because you won’t have to use multiple crypto providers.
Trading pairs: Having multiple trading pairs for each coin makes it easier to swap coins you already hold. Also, having swap pairs with GBP is ideal since you’ll likely deposit fiat currency if it’s your first time investing in crypto.
Staking options: Staking is great if you plan to hold long-term because you can earn interest on your crypto. Therefore, you should scan each platform to find the best APYs for the coins you want to stake.
Other investment options: Crypto platforms offer various ways to make money besides buying coins. Lending, mining, and leverage are alternative methods you can use to potentially make money, so consider if these are a requirement of the platform.
Deposit and withdrawal methods: Make sure that the payment methods you want to use are accepted by the crypto brand.
Reputation: Check who the platform is regulated and licensed by to ensure they are trustworthy. Also, you should look at reviews to see how other investors rate the service.
Security: Most platforms will have a dedicated page disclosing their top security features, making it easier to see how well you’re protected. Also, the crypto brand should allow you to boost your security by providing 2FA and crypto address whitelisting. Also, we have prepared the best crypto apps in the UK you can use to buy crypto.
Where to Store Cryptocurrency After Investing
When you buy cryptocurrency, it's usually stored in a crypto wallet linked to the exchange. Leaving coins on a crypto exchange is not recommended since they can get hacked, or your account can get compromised so it is better for an external crypto wallet. Therefore, it’s advised to move your tokens to a cryptocurrency wallet, which offers much better security. Once you create or buy a crypto wallet, you’ll receive a public and private key. The private key is the only way to access your crypto, making it extremely secure. Not your keys, not your crypto.
Best Cryptocurrency Wallets in the UK
Wallet | Type of Wallet |
|---|---|
🥇 Ledger Nano X | Hardware |
🥈 Trezor Model T | Hardware |
🥉 Atomic Wallet | Software |
Tips Before Investing in Cryptocurrencies in the UK
This section contains insightful tips that you should know before making your first crypto investment.
Don't Overtrade
More often than not, investors see a coin rise quickly and invest huge amounts because they want to get a quick buck or FOMO (fear of missing out) into buying. However, this is too risky because the coin can lose value at any moment. You should never invest more than you can afford to lose. There will always be opportunities in the crypto space and your livelihood is more important. Determine beforehand what you can put into crypto, and do not go over your predetermined budget.
Don't Forget About the Taxes
Cryptocurrencies are taxed in the UK as income or capital gains. All Brits have a capital gain tax allowance of up to £12,300, so if you trade you won’t have to pay taxes until profits exceed this number. Unfortunately, tracking crypto trades and cryptocurrency transactions is frustrating, but it is required by HMRC (His Majesty’s Revenue & Customs). Therefore, we recommend using a coin-tracking service that can integrate with your selected crypto exchanges. Read our UK cryptocurrency tax guide for more information.
Stick to a Strategy
Many beginner investors will face volatility at some point as the crypto market is highly unstable. This is where the term “panic selling” comes in. Newbies will see the coin falling and sell their stack to prevent more “losses”. However, note that you do not lose money until you sell your coins.
To prevent panic selling, create an investment plan or use one of the many popular strategies like DCA or HODL. This prevents emotional trading and often results in better returns.
Never Disclose Your Private Keys
Although this tip is obvious, some beginners may confuse private and public keys. Public keys are like your IBAN or routing number that tells the money sender where to transfer funds, while private keys give access to your money. Hence you should never give out your private keys because your cryptocurrencies will get stolen. You should write down your private key and store it in a safe location that nobody else can access.
Is It Worth Investing in Cryptocurrencies in the UK?
Cryptocurrencies may help diversify your portfolio. Also, with the UK implementing crypto-friendly laws, we’ll likely see some coins becoming legal tender.
The easiest way to invest in cryptocurrency in the UK is through a cryptocurrency exchange or broker. These platforms make crypto accessible and offer many useful features like staking, analytics, and leverage.
However, cryptocurrencies are volatile, so going all in is not recommended. You should keep to an investing strategy and never buy more than you can afford to lose. Its also important to consider that Investing in cryptocurrency can be a high-risk, high-reward option for investing £5,000 in the UK, but it is important to carefully consider your investment goals and risk tolerance
Note: Not Financial Advice (NFA).
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