The Ultimate Guide to Cryptocurrency Investment in the UK

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Cryptocurrency for those in the UK (and worldwide) has become a popular digital asset investment, but it does come with its share of risk. But if you make a smart investment in crypto, you can acquire a substantial return. Our guide addresses how to invest in cryptocurrency UK, including what, where, and how much you should buy.

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The Rise of Crypto

Cryptocurrency is a digital currency that has changed how we perceive money and payment methods. The idea for a digital currency has existed since the 1980s, but no one thought much about it until 2009, when Satoshi Nakamoto, the creator of Bitcoin, established its payment system. The first commercial Bitcoin transaction, however, took place one year later.

Over the next few years, new cryptocurrencies were developed, many of which experienced a steady rise in value, enticing people to invest in crypto. The world took an interest in crypto investing, and the UK was no exception. Investing in cryptocurrency in the UK has become increasingly popular. But how do Brits invest in crypto?

Cryptocurrency in the UK

There has been significant growth in crypto ownership in the UK. Much of the younger generation has chosen to invest in cryptocurrencies rather than in more traditional investments. The considerable interest in crypto investments is seen in the latest numbers from 2021, showing that 6.1% of the UK population owned cryptocurrency compared to the previous year at 3.86%.

Buying crypto in the UK became more popular during the COVID-19 pandemic, with many seeking additional portfolio diversification or an alternative payment method.

DID YOU KNOW? In 2021, the global crypto market had seen tremendous growth—from $578 billion to $3 trillion. This growth is expected to continue, as many are interested in buying crypto.

Is It Wise to Invest in Cryptocurrency?

Historically, crypto purchases have proven to be good investments. But cryptocurrencies are not regulated by governments or central banks—so their value is volatile. If you wish to invest in cryptocurrency in the UK, remember that there’s a certain level of risk involved.

Before you purchase cryptocurrencies, do some research. Choosing which cryptocurrency to buy is a crucial step of the process, followed by tracking the market value of the digital asset you’ve chosen. If you have some money to spare, it’s a good idea to buy cryptocurrency, but we advise you not to invest too much money, as there is always the risk of losing it.

DID YOU KNOW? Investing in crypto is risky. Gold, however, protects your assets from inflation and retains excellent value in the long term. So if you want to find a more stable investment, consider buying gold as an investment.

Is It Legal to Buy Cryptocurrency in the UK?

Crypto assets aren’t regarded as financial assets in the UK. The UK government considers them property, and capital gains tax must be paid if crypto profits are above the annual exempt amount, currently £12,300. It is legal to buy and sell cryptocurrency in the UK, although crypto trading in the UK has become highly regulated since 2021.

As of 10 January 2021, all crypto exchanges, brokers, advisers, and investment managers where you can buy cryptocurrency in the UK must be registered with the Financial Conduct Authority (FCA) and comply with numerous laws and regulations.

DID YOU KNOW? Some countries that have banned cryptocurrencies include China, Colombia, Russia, Turkey, India, Iraq, etc.

Key Takeaways

Bitcoin, created in 2009, was the first cryptocurrency.
6.1% of the UK population owns at least one cryptocurrency.
Crypto trading in the UK is legal, but cryptocurrencies are considered property.
You can buy and sell cryptos on a cryptocurrency exchange and store them in a crypto wallet.
Cryptocurrencies are volatile; investing too much money is ill-advised.

How to Invest in Cryptocurrency UK

When you decide to invest in the UK crypto market, there are some concerns you should know about before you put down your hard-earned money. The following sections explain where you can buy cryptocurrencies, which ones to choose, how much you should buy, and tips for novices to the crypto world.

Where to Buy Cryptocurrency in the UK

So, where can I buy cryptocurrency in the UK? The process of buying cryptocurrencies in the UK is straightforward. If you want to easily buy crypto, you need to create an account with a cryptocurrency exchange. You’ll also need a crypto wallet for storing the coins you’ve bought—either the exchange will provide one, or you’ll need to obtain one yourself.

Other options for buying cryptocurrencies include online brokerages and cryptocurrency ATMs, which allow you to purchase crypto coins and tokens quickly. But the best way for buying cryptocurrency on the UK market is via a licensed exchange. Consider the following essential features before choosing a crypto exchange.

  • Availability of cryptocurrencies
  • Levels of security
  • Licensed software
  • Accessible via a mobile app
  • Minimum deposit requirement
  • How much you can withdraw

We’ve also listed some of the best exchanges available on the UK market. The next step is choosing a cryptocurrency to invest in.

DID YOU KNOW? Crypto exchanges operate 24/7. Unlike the stock market, the crypto market is constantly open, allowing you to trade any time of the day or night, even on Sundays and holidays.

Which Cryptocurrency Is Best?

There are thousands of cryptocurrencies you can invest in. Some cryptos are well-known and have seen steady growth, but some lesser-known cryptos can make you a profit, too. So it’s no wonder you may have trouble choosing where to invest.

If you’re thinking about how to buy crypto on the UK market, we’ve listed the following best cryptocurrencies available.

  • Bitcoin: Most expensive yet best steadily growing cryptocurrency
  • Ethereum: Second-highest valued cryptocurrency
  • Binance Coin: A good investment for future growth
  • Tether: Value backed by fiat currencies
  • XRP: For trading other cryptocurrencies
  • Solana: A good Ethereum alternative
  • Cardano: Experiencing high growth

Choose a cryptocurrency that fits your budget and start building your portfolio.

DID YOU KNOW? When you set out to buy Bitcoin, be mindful that its value constantly fluctuates. It’s vital to double-check the price before making your purchase.

How Much Should You Buy?

Perhaps you know how to invest in Bitcoin in the UK and also choose an alternative cryptocurrency, but you may be wondering how much you should invest.
First, there’s no correct answer to this question. Each person should invest a sum they can afford. But it’s not advisable to invest all of your savings into cryptocurrencies—they are, after all, an unregulated, volatile currency.

The best way to buy cryptocurrency in the UK is to invest 1% to 5% from a total allocated investment amount. The rest should be invested in more traditional investments, such as stocks, bonds, and mutual funds. And you can always buy more crypto if it’s not going as well as you’d like.

DID YOU KNOW? Investments aren’t the only way of earning a passive income. The digital world is full of opportunities for making extra money. You can sell digital products, rent ad space, or even create a blog.

Tips for Crypto Novices in the UK

Many are just starting out in the world of crypto investments. So we’ve included the following advice on how to invest in cryptocurrency for beginners.

Pick a Good Platform

Choosing a secure, reliable crypto trading platform is essential in the trading process. Once you’re confident that your assets will be safe, you can proceed with buying cryptos.

Choose a Cryptocurrency

Choose a single cryptocurrency to invest in. Don’t spread yourself too thin by investing in various currencies. Just one is enough to begin with.

Make an Investment Plan

So how do I buy cryptocurrency on the UK market? You can seek out expert help to design an investment plan for you. But once you’ve done this, you must stick to the plan. And don’t be fooled into buying more than you planned just because the price has dropped.

Track the Market

Once you purchase the planned amount of cryptos, you need to keep track of the market fluctuations. Note all the changes, and don’t be disappointed if the price drops at some point—prices of cryptos can change in seconds.

Don’t Risk Too Much

How to buy crypto in the UK entails how much you should buy. As previously mentioned, don’t put everything you have in cryptocurrencies. They’re a risky investment, and you don’t want to risk more than you can afford to lose.

DID YOU KNOW? Besides investments, there are many ways to earn money online. You can create a website, review other websites, or conduct surveys—none of which requires you to invest your own money.

Conclusion

Cryptocurrencies are a risky investment, but they can also be very profitable under the right circumstances. So how can I buy cryptocurrency in the UK? Our guide has given you the essential information (and hopefully confidence) on how, where, and what to invest in. But proceed with caution.

FAQ

Where can I buy cryptocurrency in the UK?

Many reputable cryptocurrency exchanges are available to UK residents, such as eToro, Binance, CoinBase, etc.

Which is the best cryptocurrency to invest in UK?

Currently, Bitcoin is considered the best investment opportunity in the crypto world, followed closely by Ethereum. Some less expensive alternatives include XRP, Solana, and Cardano.

How do I buy and store cryptocurrency in the UK?

If you want to know how to invest in cryptocurrency UK, the best way is to purchase cryptos via a cryptocurrency exchange. When storing your cryptos, you need to have a crypto wallet secured with a password.

ABOUT AUTHOR

I learned a lot about finance after working for a digital marketing company specializing in investing and trading stocks, forex, etc. After that, I got exposed to other verticals such as wealth management and personal finance, which further improved my understanding of the financial world.

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