Cryptocurrency has become hot property in the UK over recent years, with everyone from seasoned professionals to complete amateurs seeking to dip their toes into the waters of trading. Despite their market’s characteristic volatility, they have become seen as a means to an end by those looking to build their wealth and diversify their investment portfolios, and it is in fact because of their dramatic price swings that they have become so highly sought-after. In the early days of cryptocurrencies, the world’s flagship digital asset, Bitcoin, made numerous overnight millionaires during its meteoric rise from obscurity to prominence, and since then, we’ve seen plenty of other investors build millions by trading Bitcoin, Ethereum’s Ether, and other popular.
Whilst these days it couldn’t be easier to convert 1 ETH to USD or Bitcoin to British pounds sterling, as the acceptance of cryptocurrencies as a means of payment becomes more widespread, it’s becoming more appealing than ever to retain crypto fortunes in their original format. It’s now possible to pay for high-end hotels and holidays, luxury cars and even homes using crypto wallets, which is a sign that cryptocurrency is well and truly here to stay.
If you’re keen to begin your trading journey and start amassing some digital coins with the hopes of building long-term wealth, then here’s how you can buy Bitcoin, Ether and other alt coins of note in the UK.
Is it legal to buy Bitcoin and Ether in the UK?
The good news is that although some countries do have restrictions on buying cryptocurrencies, in the UK, it’s perfectly legal to purchase Bitcoin, Ethereum, and other comparable digital coins, and there’s a well-defined regulatory framework in place. This does mean that like all other income, cryptocurrencies are legally considered to be taxable assets, which means holders must report their assets and pay their dues to His Majesty’s Revenue and Customs (HMRC) each year to ensure full compliance.
Cryptocurrencies aren’t, however, recognised as legal tender in the UK in the way that the British pound is.
Why you need a crypto wallet
One of the crucial measures to put in place before you delve into investing in Bitcoin and Ethereum is to ensure you have an account set up with a crypto exchange, and a secure crypto wallet ready to go. When starting out, there’s nothing wrong with leaving small amounts as holdings on your account, once you start to amass larger amounts of tokens you’ll want to ensure you have somewhere safe to store them. A cold crypto wallet will give you more control over your funds and full autonomy when it comes to controlling them by safeguarding the private keys needed to access it and to authorise transactions.
How to buy Bitcoin and Ether in the UK
One of the easiest ways to purchase cryptocurrencies in the UK is via a crypto exchange, but with such a wide variety to choose from, it’s wise to shop around first. Exchanges operate without formal regulation, but registration is required by the Financial Conduct Authority (FCA), so be sure to choose an exchange that plays by the rules as there are still some that don’t.
It’s worth noting that not all exchanges will offer all cryptocurrencies, so check that yours has Bitcoin and Ether available to purchase before signing up. You’ll also want to ensure that there’s substantial daily trading volume in these to make your own trading transactions easier, and be sure to take any fees into account, as these can affect your returns.
Another option is to go with a broker like Kraken, which offers a user-friendly interface and makes the trading process simpler, which is great if you’re just starting out. Some also offer the chance to try out some moves via a dummy account before you start making real time trades, which can be a handy way to learn the ropes and gain a thorough understanding of how the market works before risking real capital.
If, however, you’re keen to keep your accumulated crypto funds in a cold crypto wallet, which is offline, brokers do not always allow this, so it’s something to bear in mind when deciding whether to go with a broker or an exchange.
Placing your first order
There are various ways to fund your brokerage or exchange account so that you can start buying crypto. One of the easiest ways is by linking your bank account, but you can also make payments via debit or credit card. You’ll need to submit an identification document before you’re able to trade, which can mean that you’re not able to make your first purchase immediately, but verification rarely takes more than a couple of days.
Once you’re ready to go, you can place an order for Bitcoin or Ether by entering the desired amount in pounds, and you’ll then be able to see how much of your desired asset you can get for your money – which will often be fractional shares of large cryptocurrencies like these if you’re starting small. Next, all you need to do is click the ‘buy’ button and you’re off the starting block, and ready to begin your investing journey.
Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.
