How to Invest in Bitcoin in the UK | Koody (2024)

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Contents:

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How to Invest in Bitcoin

The easiest way to invest in Bitcoinin the UKis to purchase it online from a crypto exchange, such as eToro, CoinJar, or Uphold. Crypto exchanges make it easy to buy and sell Bitcoin and other cryptocurrencies directly from your smartphone, tablet, or computer.

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After purchasing Bitcoin, you can do one of two things:

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You can leave your Bitcoin in the crypto exchange, where you will be able to monitor the value and exchange it for other cryptocurrencies (such as Ethereum, Solana, USD Coin, BNB, XRP, and more) or for fiat currencies (such as GBP, USD, EUR, and others).

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Alternatively, you can move your Bitcoin and other crypto holdings to a secure Bitcoin wallet that can be separate from or owned by the crypto exchange you use.

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In order to manage your Bitcoin, there are three basic concepts you must understand:

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1. Public Key: This is like an email address that you can share with others. With your Bitcoin public key, you can receive Bitcoin.
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2. Private Key: This is like a password to your Bitcoin holdings, and you should not share it with anyone. A private key is a long string of letters and numbers. It is extremely important to keep track of your private keys and keep them safe. If you lose them, you lose your Bitcoin forever.
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3. ‍Bitcoin Wallet: You need a wallet to store and manage your Bitcoin and other crypto holdings. Crypto exchanges, such as eToro, CoinJar, and Uphold, offer a simple Bitcoin wallet for storing and securing your Bitcoin. A wallet and a crypto exchange are two separate things. Even though most crypto exchanges listed on Koody have their own wallets, you do not need to use a wallet if you prefer to leave your Bitcoin in a crypto exchange.

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Where to Buy Bitcoin in the UK

We’ve compiled a list of the best places to buy Bitcoin in the UK. These are Bitcoin exchanges, wallets, apps and websites where you can buy Bitcoin, Ethereum, Cardano, Dogecoin, and other cryptocurrencies in the UK.
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Please remember that cryptoassets like Bitcoin are highly volatile, unregulated investment products with no UK or EU investor protection. You could lose all the money you put into them. Additionally, capital gains tax may apply to profits from cryptocurrency sales.
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Here are the best places to buy Bitcoin in the UK:

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What Is Bitcoin?

Bitcoin is a form of digital money that you can buy, sell or securely send to anyone anywhere in the world without the interference of banks, payment platforms or central governments.

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Launched in 2008, Bitcoin is by far the world’s biggest and most popular cryptocurrency, with a market capitalisation of around £856 billion (at the time of writing).

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Market capitalisation (or market cap) is a metric used to measure the size and popularity of a cryptocurrency based on its current price and the volume of the cryptocurrency in circulation. The higher the market cap, the more popular the cryptocurrency is.

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There will only ever be 21 million Bitcoin in the world, making it a scarce cryptocurrency. Around 3 million Bitcoin are still available to be mined, and this will happen slowly over the next hundred years. The last blocks will theoretically be mined in the year 2140.

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Who Created Bitcoin?

Bitcoin was created in 2009 by a person or organisation called Satoshi Nakamoto, who explained their theory of digital peer-to-peer transactions without the interference of the government in a white paper entitled “Bitcoin: A Peer-to-Peer Electronic Cash System”.

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What Is the Bitcoin Blockchain?

A blockchain is a specific type of database containing a list of transactions that anyone can view and verify. You can think of it like your bank statement or a bank ledger, where you can see a history of transactions carried out over a particular period. In the case of Bitcoin, the Bitcoin blockchain is a record of every time someone buys or sells Bitcoin. Read more about blockchain here.

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How Has the Price of Bitcoin Grown Over the Years?

In early 2010, one Bitcoin was valued at a fraction of a penny. By October 2013, it had grown to over £100 (over 1,000,000% growth in just three years), and by December 2017, the price skyrocketed to a whopping £15,000 (an increase of about 15,000% in four years). As of April 2022, the price of Bitcoin was £33,000 (120% growth from 2017). At the time of writing, one Bitcoin was equal to £43,357.33.

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Frequently Asked Questions

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1. How do I buy Bitcoin in the UK?

To buy Bitcoin in the UK, you’ll need to:

1. Create an account with a crypto exchange, such as eToro or CoinJar.
2. Fund your account with GBP using your debit card or via bank transfer.
3. Research Bitcoin and other cryptocurrencies.
4. Buy Bitcoin with GBP using the crypto exchange’s web or mobile app.
5. Choose and configure a Bitcoin wallet, such as eToro Wallet or Bither Wallet.
6. Transfer your Bitcoin to your wallet for safekeeping.

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If you are looking for a low-cost way to buy, the cheapest way to buy Bitcoin in the UK is to compare fees across reputable cryptocurrency exchanges such as eToro, CoinJar, and Uphold, focusing on their trading, withdrawal, and any additional fees. Consider using bank transfers as your payment method for lower fees, explore peer-to-peer crypto platforms for potentially better rates, and keep an eye on promotions or discounts.

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Prioritise platforms that offer transparency in their fee structure to avoid hidden charges. Finally, while seeking the most cost-effective option, remember to ensure the platform is secure, compliant with UK regulations, and has a solid reputation for safeguarding investments.

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2. Is Bitcoin safe?

Bitcoin uses cryptographic technology, making it more secure than standard debit or credit card transactions. However, there are some risks involved with Bitcoin transactions. For example, Bitcoin wallets are not necessarily anonymous, and they rely on passwords that can never be recovered once lost.

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3. What makes Bitcoin unique?

Bitcoin is unique because:

1. It was the first decentralised cryptocurrency ever created.
2. It facilitates affordable digital peer-to-peer cross-border transactions with zero interference from a bank or government.
3. It currently has an extremely high valuation.
4. It is the most popular cryptocurrency in the world.
5. It is easier to access and store securely than almost any other cryptocurrency.

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4. What is the current price of Bitcoin?

The current price of Bitcoin is £43,357.33 (at the time of writing). At any point in time, the current price of Bitcoin can be found on CoinMarketCap.

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5. Is buying Bitcoin legal in the UK?

It is perfectly legal to buy Bitcoin in the UK, and all UK residents can buy Bitcoin and other cryptocurrencies from crypto exchanges. While the UK’s financial watchdog, the Financial Conduct Authority (FCA), does not currently regulate cryptocurrencies, it displays a list of the crypto exchanges registered with it. Some of them include eToro, CoinJar, and Uphold. The FCA’s position on cryptocurrencies is: “Cryptoassets are considered very high-risk, speculative investments. If you invest in cryptoassets, you should be prepared to lose all your money. You are unlikely to have access to the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS) if something goes wrong.” To learn more about the FCA’s position on cryptocurrencies, read its guidance.

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6. How do beginners invest in Bitcoin?

Beginners can invest in Bitcoin by purchasing it online from a crypto exchange such as eToro or Uphold. Crypto exchanges make it easy to buy and sell Bitcoin and other cryptocurrencies directly from your smartphone, tablet or computer. They also allow you to monitor the movements and performance of your crypto holdings.

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7. What is the minimum amount I can invest in Bitcoin?

The smallest amount of Bitcoin you can buy is 1 satoshi, which is 0.00000001 Bitcoin. This essentially means that you can start buying Bitcoin with as little cash as you are comfortable with. Most cryptocurrency exchanges allow you to invest in Bitcoin with as little as £10.

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8. What is the best cryptocurrency to buy in 2024?

Here are the best cryptocurrencies to buy in 2024 ranked by market capitalisation:

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1. Bitcoin (BTC) - £856 billion
2. Ethereum (ETH) - £214 billion
3. Tether (USDT) - £90 billion
4. Binance Coin (BNB) - £57 billion
5. Solana (SOL) - £47 billion
6. USD Coin (USDC) - £27 billion
7. XRP (XRP) - £23 billion
8. Dogecoin (DOGE) - £11 billion
9. Toncoin (TON) - £10 billion
10. TRON (TRX) - £10 billion

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Market capitalisation (or market cap) is a metric used to measure the size and popularity of a cryptocurrency based on its current price and the volume of the cryptocurrency in circulation. The higher the market cap, the more popular the cryptocurrency is.

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To get the market cap at any given time, multiply the current price of any cryptocurrency by the total number of that cryptocurrency in circulation.

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9. Is investing in Bitcoin a good idea?

As with all investments, it is entirely up to you to decide if they are worthwhile. Most people buy Bitcoin as a speculative investment or as an addition to their larger long-term investment portfolio. If you think the price of Bitcoin will go up in the future (for whatever reason), buying it now means you can sell it at a higher price in the future. That said, please remember that when it comes to investing, profits are not guaranteed, and your capital is at risk.

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10. Do I need to pay tax on Bitcoin in the UK?

Yes, Bitcoin and other cryptocurrencies are taxable in the UK. HMRC requires UK residents to pay Capital Gains Tax (CGT) on the profit they make from Bitcoin (and other cryptocurrencies) in the same way they pay CGT on the profit from other assets like stocks. For more information on cryptocurrency taxes, please read HMRC’s guidance.

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11. Where can I buy Bitcoin in the UK?

You can buy Bitcoin in the UKfrom the following crypto exchanges:

1. eToro - Good for beginners and experts; 70+ Cryptocurrencies
2. CoinJar - Ready-made crypto portfolios; 50+ Cryptocurrencies
3. Uphold - Crypto card; Cheap forex rates; 250+ Cryptoassets

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12. Which Bitcoin wallet is best?

Here are some of the best Bitcoin wallets:

1. ‍Bither Wallet - Simple and secure; includes cold and hot modes; accessible via several platforms and devices.
2. Coinbase Wallet - Stores all your crypto and NFTs in one place; supports hundreds of thousands of tokens and dApps.
3. eToro Money Wallet - Provides an “unlosable” private key; supports a growing list of cryptoassets.
4. ‍Uphold BTC Wallet - Convenient; stores your keys, so you do not have to worry about storage.‍
5. CoinJar Wallet - No fees; send and receive 50+ cryptocurrencies.

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Credits

1. Bitcoin.org
2. The Financial Conduct Authority

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