Bitcoin is one of the most popular investments in the UK at the moment. Despite being very volatile, unregulated and relatively misunderstood, people want to buy it. This guide will explain how to safely buy Bitcoin in the UK, the risks, and potential rewards and also cover whether or not Bitcoin is a good investment.
Best Bitcoin Investing & Trading Accounts Compared
Use our comparison table of Bitcoin accounts to compare costs and the different ways to buy and sell Bitcoin. Please Note: Investing in Bitcoin and other cryptocurrencies is very high risk and not regulated by the FCA. There is a very high chance you may lose all your money.
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eToro: Best for regular Bitcoin trading
eToro Cryptocurrency Investing Review
A good all-around cryptocurrency investing platform, suitable for those wanting to invest in the most popular crypto coins.
Fees: The 1% fee for trading crypto is included in the buy-sell spread when you trade crypto.
- 120 cryptocurrencies
- $10 minimum deposit
- 1%* commission on crypto trading
- Accounts only in USD
Research & Analysis
Coinbase: Good for Bitcoin and a range of other cryptocurrencies
Description: Coinbase is a cryptocurrency exchange that lets you buy and sell various cryptocurrencies like Bitcoin, Ethereum, Cardano and Solana. Coinbase was listed on the NASDAQ exchange in 2012 and claims to have over 108 million users in over 100 countries and process $159 billion in quarterly volume.
Coinbase is one of the largest cryptocurrency exchanges and is publically listed on the NASDAQ exchange. It offers access to large selection of cryptocurrencies that can be traded on it’s crypto exchange or withdrawn to a cryptocurrency wallet.
- Wide range of cryptocurrencies
- Publically listed company
- Exchange and withdrawals
- Very high-risk investment types
- You can lose all your money
- Cryptocurrency still unregulated
Research & Analysis
Revolut: Good for smaller bitcoin investing
Revolut Cryptocurrency Investing
A good choice if you are just dabbling in cryptocurrency and don’t need anything too complicated.
Fees: Crypto fees are reduced to 1.5% for Metal and Platinum account holders.
- 30 cryptocurrencies
- $50 minimum deposit
- 1.99% commission for base accounts are quite high
Research & Analysis
How To Buy Bitcoin Safely In The UK
You can buy Bitcoin one of two ways in the UK:
- Bitcoin Exchange – A Bitcoin exchange Once you have decided on a cryptocurrency exchange, you will need to open an account which will involve
- Bitcoin Wallet – A Bitcoin wallet or an account with a cryptocurrency exchange. A wallet lets you withdraw your Bitcoin and keep it in digital storage offline.
The process of actually buying Bitcoin is based on following these steps:
- Find a crypto exchange that offers Bitcoin like eToro, Coinbase or Revolut.
- Open an account – you will have to prove your identity and answer some suitable questions. It’s important to note that if you want to withdraw money from a Bitcoin exchange, you will have to provide ID documents for AML (anti-money laundering)
- Deposit funds (GBP, USD or Euro) – you can do this using a debit card or a money service like Paypal (most banks and credit cards in the UK have banned transactions to crypto exchanges).
- Choose how much Bitcoin you want to buy. As a single Bitcoin is very expensive you can buy fractions of a Bitcoin as a decimal transaction.
- Once you have bought yout Bitcoin you can decide to keep it on the exchange in the hope of selling it for profit at a later date. Or you can withdraw it to a crypto wallet.
On the surface, investing in Bitcoin is the same as investing in shares. You open an account deposit funds and buy Bitcoin. Bitcoin is an obvious target for investors and traders due to its history of rapid gains and falls in value. This volatility makes it both very risky and potentially very lucrative as an investment. Unlike investing in shares though, where stocks are traded on stock exchanges, cryptocurrencies like Bitcoin are traded on a peer to peer basis on cryptocurrency exchanges and a recorded in the blockchain.
Bitcoin is a very high-risk investment. Whether or not Bitcoin is a good investment is relative to your investment objectives.
How to choose an account for investing in Bitcoin
Here are three tips and things to consider when deciding which provider to buy Bitcoin through:
- Cost comparison
- Risks & safety
Look for a regulated provider who also offers Bitcoin
Even though Bitcoin is an unregulated digital currency, many providers that offer Bitcoin investing are regulated by the FCA for other things such as stocks, bonds, bank accounts and trading. By choosing a Bitcoin account that is attached to a regulated entity, you will be dealing with a provider who is responsible for treating clients fairly (although not directly for cryptocurrency investing).
Compare the costs of investing in Bitcoin
The costs of investing in Bitcoin can vary dramatically. The key things to consider are:
- Bitcoin commission– some Bitcoin accounts will charge a fee when you buy and sell Bitcoin on their platform.
- Bitcoin currency exchange fees– if you are buying Bitcoin against the USD (BTCUSD) but depositing GBP into your Bitcoin wallet, there will be a fee for converting the GBP into USD. It is possible with some exchanges to buy Bitcoin against GBP where you do not need to convert Fiat currencies.
- Bitcoin price spread– this is the difference between the buy and sell prices. As with investing in stocks, there is always a spread between where people are prepared to buy and people are prepared to sell. The Bitcoin spread varies, depending on how active the market is (liquidity) and how much the price is moving (volatility), as well as which Bitcoin platform you are investing through.
Understand the risks involved in investing in Bitcoin
Before you start investing in Bitcoin, decide if you should be investing in Bitcoin. The major risks of investing in Bitcoin are:
- Sudden price moves– the price of Bitcoin can drop and rise quickly and for no apparent reason.
- High investment costs– compared to investing in stocks, it is still expensive to buy and sell Bitcoin.
- Bitcoin scams– there are lots of scammers using fake Bitcoin ads to scam potential Bitcoin investors, so always research Bitcoin accounts before investing.
How to get started investing in Bitcoin
If you are buying Bitcoins, then you will require a Bitcoin address. This is a code to which the Bitcoins that you buy will be allocated. You can acquire an address by downloading a Bitcoin client to your computer or setting up an online wallet.
What to avoid when you start investing in Bitcoin
When using CFDs or placing spread bets, it is possible to lose more than your initial stake. This will be amplified if you use leverage. Don’t risk more money than you can afford to lose when you take a position. Placing stop loss orders, which automatically close down your position when Bitcoin hits a particular value, are an essential way to limit the risk that you face.
Bitcoin CFDs and derivatives
You can no longer trade Bitcoin as a CFD, spread bet as the FCA has banned it. however, if you have an account with a US broker like Interactive Brokers you can trade the CME Bitcoin futures as well as buy Bitcoin ETFs and ETPs.
Here are some of the most frequently asked questions people ask before they invest in Bitcoin:
Bitcoin is a digital currency that is based on blockchain technology and can be sent from user to user on the global Bitcoin network without the need for intermediaries such as banks. It was launched in 2009 by Satoshi Nakamoto (a pseudonym) and designed to be an alternative to traditional fiat currencies.
Bitcoin works as a digital currency where a record of all transactions are kept on the block chain. Each Bitcoin is stored in a digital wallet where it can be spent or sent.
You can either mine Bitcoin or buy them through a cryptocurrency exchange platform.
Owning Bitcoin is not as safe as owning other currencies such as the USD, GBP or Euro. Bitcoin is an unregulated cryptocurrency, where investors do not get the same protection from regulators such as the FCA.
No, Bitcoin is not regulated by the FCA. However, the FCA is in the process of starting to regulated some cryptocurrency brokers and platforms in the UK.
Many Bitcoin adverts are fake. You should be extremely cautious of any advertisement advertising cryptocurrency. From Peter Jones to PSY, new scam adverts advertising get-rich-quick Bitcoin schemes are flooding the internet. Despite a global ban from Google on non-regulated brokers advertising derivatives products, they are still getting through. Amazingly, you see them in the header of the DailyMail and other mainstream media websites.
No, Martin Lewis, the money-saving-guru from Money Saving Expert very clearly states on his social media profile that he “doesn’t do ads”. In fact Martin Lewis recently sued Facebook because they failed to stop scammers using his image in scam ads for get-rich-quick Bitcoin schemes. Martin Lewis settled with Facebook for a £3m charitable donation in the end.
If you see an advert for Bitcoin investing, it may well be a scam as Google and Facebook have banned cryptocurrency advertising. If it looks like a scam, it’s a scam. And always check the FCA register for any broker you deal with.
Keep in mind too though that the cryptocurrency scammers make clone websites of real brokerages to scam you. So, double and triple-check any broker before sending money. A quick google search can save you from becoming a victim.
It is possible to make money investing in Bitcoin in the same respect that it is possible to make money investing in high-risk stocks. If you buy low, sell high, you will make money. But unlike investing in stocks where a company generates revenue and profits, Bitcoin has no underlying value so it is also possible to lose money very quickly by investing in Bitcoin.
Bitcoin is not illegal in the UK.
If you buy Bitcoin through a cryptocurrency exchange, they will have an option for you to sell it as well.
Never believe anyone who says they can make you rich or adopt trading as a career if you are a complete beginner. However, if you do want trading ideas, you can find news and analysis on Bitcoin here:
- TradingView provides excellent crypto charts and lots of users post trading ideas.
The current Bitcoin (CURRENCY:BTCGBP) price is £21,961.75238.