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How to Buy Bitcoin in the UK in 5 Simple Steps

Bitcoin United Kingdom

Bitcoin (BTC) is the world’s first and leading cryptocurrency, and the one most investors are interested in buying. Bitcoin’s performance over the past few years has been astonishing, and this has attracted more investors.

The United Kingdom is a key cryptocurrency market, with millions of investors in the country. However, if you are one of the people looking to buy Bitcoin in the UK and don’t know how to go about it, then we have put together this guide just for you. This well-researched guide will show you how and where to buy Bitcoin in the UK.

Quick Guide to Buy Bitcoin in the UK Today

1

Register

You start by choosing a cryptocurrency exchange or broker and open a trading account. Use your email address or phone number, depending on their preference. After the account is opened, complete the Know Your Customer (KYC) process by submitting documents to prove your identity. This stage is required by regulated exchanges and brokers to help provide adequate security for your trading account.

2

Fund your account

You move to the next stage and deposit funds into the exchange or brokerage platform account you opened in step one. The exchanges and brokers offer a wide range of payment options, including the popular options like bank transfer, credit/debit card and crypto payment or others like PayPal. The funds you deposited are what you will use to buy BTC on the platforms.

3

Buy Bitcoin

After the funds reflect in your trading account, you can use it to buy Bitcoin. You can use the funds to buy Bitcoin directly, with several platforms supporting the BTC/GBP pair. Complete the transaction after inserting the amount of BTC you wish to buy or the equivalent GBP amount. Afterwards, you might want to transfer the BTC into a private bitcoin wallet for safekeeping.

Step by Step Guide - How to Buy Bitcoin in the UK

Buying Bitcoin can sometimes be a hard task. This is especially true for new crypto market entrants as the technical aspect of it might be overwhelming. We have broken down the Bitcoin buying process into five simple steps. They are;

Step 1: Find an Appropriate Platform to Buy Bitcoin

Bitcoin is the leading cryptocurrency, which means that it is available on virtually every crypto exchange and brokerage platform. This means you don’t have to work hard to find platforms that offer Bitcoin to their users. However, you will need to conduct in-depth research into the best platforms that suit your investment needs and style.

If your desire is to be a long-term investor, then you should buy Bitcoin from a cryptocurrency exchange. The exchanges are known for dealing with the actual BTC coins. This grants you the opportunity to transfer your bitcoins into cold storage wallets for maximum safety and security.

However, if your interest is to make quick money from trading Bitcoin, then crypto brokers should be the places you look to. We always recommend using regulated platforms. They offer higher security and are usually insured. This ensures that your funds are safe at all times, even in the event of a hack or attack.

Step 2: Registration / Create a New Account

Proceed to the next stage and open a trading account with the broker or exchange of your choice. These platforms usually allow people to open an account using an email address, a phone number or using your social media account.

The platforms will activate your account right away, but you will be required to complete the KYC process before they sell the BTC coins to you. Our recommended platforms require this process since it allows them to provide safer trading environments to the clients. The required documents include necessary copies of your ID (like passport, driver’s license or more) and proof of address (documents like utility bills and bank statements). Some might even ask for a selfie to put a face to the account.

The KYC process is essential to the security of your trading funds and other personal details. Since the process is active in the forex and stock markets, it is important that it is adopted within the crypto space to ensure maximum security of the emerging sector.

Step 3: Deposit Funds

The completion of the KYC process leads to the full activation of your exchange or brokerage account. This now allows you to buy BTC. However, you can’t buy BTC until you have funded the newly opened brokerage or exchange account. The platforms provide a wide range of payment options, including bank transfers, PayPal, credit and debit cards and others. Each of the above mentioned payment options has its pros and cons. Kindly go through them and choose the most suitable one for you.

Step 4: Start Trading or Buying Bitcoin

After choosing the payment option and depositing funds into the trading account, you can start trading Bitcoin or buy it for long-term investment purposes. When you use a broker, you will gain exposure to BTC via investment vehicles like futures and CFDs, thus, allowing you to make profits from BTC’s price performance, depending on your speculation. You can do this without holding the underlying coins.

On the other hand, if you decide to go with a crypto exchange, you will be buying the real coins. You can transfer the BTC coins to external wallets for safekeeping or use them for trading against other cryptocurrencies. The BTC/GBP pair is popular on numerous platforms, allowing you to trade the leading cryptocurrency against fiat currencies.

We have platforms that don’t always play by this rule. Binance, for instance, allows its users to gain access to cryptos via futures and options contracts despite also offering them access to the regular coins. eToro is a popular broker that allows users to purchase the actual coins from their platforms.

Step 5: Optional Steps

There are optional steps you can take to either boost your investment or increase the safety of your assets.

  • Store in an external wallet: If you are a long-term Bitcoin investor, you should move the BTC coins to external wallets like Trust Wallet, Trezor and Ledger. 

  • Hedge the coins: As a derivative trader, you can open complementary positions to hedge your bitcoins. 

Buy Bitcoin in the UK today!

What is the Best Payment Method for Buying Bitcoin in the UK?

UK traders have access to a wide range of payment options when they want to buy Bitcoin from crypto exchanges and brokerage platforms. The trader gets to choose from the wide array of payment options, considering their fees, speed of transaction and more.

PayPal is one of the payment options available to UK traders. Some of the payment methods you can use to buy bitcoins from the UK include;

  • Buy Bitcoin with Cash: peer-to-peer exchanges allow you to buy bitcoins with cash.

  • Buy Bitcoin with Credit Card: This option is widely used by traders since it offers a high speed of transaction and security. However, the fees involved are also high.

  • Buy Bitcoin with Bank Transfer: This is another popular method used by traders who seek to enjoy low transaction fees and security. However, the transactions are not processed instantly and could sometimes take days.

  • Buy Bitcoin with PayPal: PayPal is a convenient method of funding your exchange account to buy Bitcoin since it has low fees. However, this payment option is not available on most platforms.

Please note that some UK banks such as Natwest have placed limits on how much users can deposit into cryptocurrency exchanges when using their debit/credit cards. HSBC is another bank that has blocked crypto transactions using its debit and credit cards. Banks including Barclays and Santander have blocked their customers from funding their Binance accounts. If you are facing any such payment issues, you can use another payment method that is most suitable to you.

Why Buy Bitcoin?

As the leading cryptocurrency in the world, Bitcoin is appealing to a lot of people for a lot of reasons. In recent months, financial institutions such as JPMorgan Chase, Morgan Stanley and Goldman Sachs have allowed their wealthy clients to gain exposure to Bitcoin. This is because the clients now consider Bitcoin to be an investment vehicle that can be used as a hedge against inflation.

Bitcoin’s performance over the past few years is unmatched by other financial asset classes. Despite Bitcoin’s price currently down by over 40% from its all-time high, it is still up by nearly 300% over the past year. As of July 2020, Bitcoin was trading above $9,000 per coin, and now it is trading above $32,000 at the time of writing. This massive increase in value within the space of a few months or years is the reason why some investors are seeking access to Bitcoin. With rising inflation levels, it is clear why retail and institutional investors are turning to Bitcoin.

BTC/USD 12-month chart. Source: Coinmarketcap

Another reason to buy Bitcoin is the rapid adoption of the cryptocurrency as a payment method by several retail outlets in the UK. You can buy bitcoins so you can use them to pay for goods and services on those platforms.

Is it Legal to Buy Bitcoin in the UK?

Yes, it is legal to buy Bitcoin in the UK. The Financial Conducts Authority (FCA) is currently overseeing the activities of crypto trading platforms as it requires them to register before they provide services in the region.

Hence, we recommend using brokers and exchanges that are registered with the FCA since they are reputable and regulated entities. This will ensure the safety of your bitcoins and help you avoid hackers and scam platforms.

Where Can I Use Bitcoin in the UK?

You can use Bitcoin at various places in the United Kingdom. Some of the retail outlets that accept the cryptocurrency as payment options include Boisdale of Bishopsgate, KJP Images, TandyUK Servers Limited, Rathbone News, and several others at various locations across the United Kingdom.

Currently, there are 174 Bitcoin ATMs in the United Kingdom. These Bitcoin ATMs make it easy for people to buy bitcoins with cash and also sell them. They can also use the Bitcoin ATMs to send bitcoins to other people in any part of the world. London (99), Birmingham (23) and Manchester (12) are some of the cities with the highest number of Bitcoin ATMs in the UK.

Frequently Asked Questions

  1. Satoshi Nakamoto is the inventor of Bitcoin. However, the identity of Satoshi remains a mystery as it is not yet known if it is an individual or a group.

  2. You can store your bitcoins in hot wallets or cold storage wallets. However, cold storage wallets offer the best security when it comes to your cryptocurrencies. The wallets like Trezor, Ledger and KeepKey are popular amongst long-term Bitcoin investors.

  3. You can sell your bitcoin stash on platforms where you purchased them. Some of these platforms allow you to sell your BTC and receive GBP, which can be deposited into your bank account.

  4. No, no one can access your bitcoins using your wallet address. The wallet address is to help you receive funds from other people, similar to your bank account number. People can only access your bitcoins if they get access to your wallet keys.

  5. If you hold Bitcoin as a personal investment in the United Kingdom, you will be taxed on any profits you make on your crypto holdings.

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