How to Buy Bitcoin in the UK - 0% Fees! | Coinlist.me

How to Buy Bitcoin in the UK: The Ultimate Guide

If you had bought $1000 worth of Bitcoin back in 2012, that would now be worth $1,200,000. That is over an 100,000% increase, dwarfing all other assets.

The best place to take advantage of this volatility is through one of the regulated platforms highlighted below. Being regulated means that these brokers are accountable and have plenty of safeguard measures to protect your money.

Broker Pros Min Deposit Coins Available Open Account
24 Option EU Regulated Multiple Coins Available CFD Trading $100 Local Currency Buy Bitcoin
AVA Trade $100 Min Deposit 30% Bonus CFD Trading £100 Ethereum, Bitcoin, Ripple, Litecoin Buy Bitcoin

They offer the easiest and safest way to invest in Bitcoin as well as other cryptocurrencies.

Walk-through Video to Buy Bitcoin UK

What is Bitcoin?

Before you buy Bitcoin, we need to know exactly what is it. A Bitcoin definition is that it’s a digital currency, which has had value assigned to it.

Designed as a payment system to take power away from centralised institutions, banks and governments etc, it has been built on a peer-to-peer ledger otherwise known as a blockchain.

This blockchain is where a record of all transactions are kept. Once a block (of transactions) is added to the blockchain it cannot be removed unless the whole network agrees with this.

The chances of this happening are very slim and is partly what makes blockchains so secure. Once a block is added it is not removed and therefore a history of every transaction is available to see.

Bitcoin offers safe, fast and a cheap method to pay or make cheap transfers, with countries borders being no issue. Buying bitcoins, or Bitcoin tokens, can also be a good way to keep your savings safe, invest your money and to speculate on price fluctuations.

Bitcoin the leader

Bitcoin was the first cryptocurrency to be developed. Everything else has followed the path laid by Bitcoin.

Bitcoin has had some problems, like anything, trying it first meant it fell over first. But every time it gets up, it gets up bigger and stronger. As I write this, Bitcoins market cap is over three times of that in second place. Showing that investors have most faith in the original cryptocurrency.

Bitcoin Market Cap

There have been plenty of other cryptocurrencies following Bitcoins lead and are doing well, with some innovative ideas, but Bitcoin still strives forward as the market leader.

Traditionally you gauge the Bitcoin price to the US dollar and you will often see the Bitcoin symbol as BTC/USD, which essentially is the Bitcoin dollar value.

However, despite this, buying bitcoin in the UK is arguably easier because you can buy it as a CFD or directly. Compared with the US where you can only buy bitcoin directly.

Buying BTC Currency – Shall I do it?

Bitcoin is not just a fad. It is worth nearly $100 billion. That cannot be ignored by all the naysayers. This market has seen the most growth of any market in the financial sector and despite calls that the cryptocurrencies are in a bubble, there are still two counter-arguments that should get you involved in the crypto market:

  1. Bubbles can last for decades, ride it while it’s going up!
  2. There is real innovative technology behind the cryptocurrency. The underlying value of blockchain technology is high

The invention of the blockchain will change the world. Already there are companies giving access to the technology, to SMEs (small and medium enterprises). Which will in turn dramatically improve efficiency in these businesses.

Investors can see the clear value that Bitcoin has and that is why we have seen growth over 5000% in 2017 alone.

Should I Purchase Bitcoins or Altcoins?

Altcoins are basically every other cryptocurrency that isn’t Bitcoin. The fact they gave that concept a name shows you the power Bitcoin has on the market.

That is not to say that other cryptocurrencies do not have value. Ethereum is currently sitting second in the market cap table. Ethereum has developed a blockchain that can run side blockchains at the same time. This essentially means that you can develop your own cryptocurrency without building your own blockchain.

CoinMarketCap Top 4 cryptocurrencies

In addition, more coins that offer good investment opportunity, Ripple, Litecoin, Dash, to name a few, are all exciting prospect. With all these new coins cropping up, cryptocurrency reach is increasing and there is now a vast amount of information you can get your hands on, websites such as invezz and buyripple offer great insights into other cryptocurrencies.

But there are two coins that are fresh on the market and are based on bitcoin’s blockchain: Bitcoin Cash (BCH) and Bitcoin Gold (BTG). In fact, they are part of an update on bitcoin’s business logic, which turned out in a split of the Bitcoin Network. Bitcoin Cash is currently at the third spot in cryptocurrencies’ market capitalisation. For more information, visit our Bitcoin Cash and Bitcoin Gold guides.

Whilst Bitcoin and Ethereum lead the way, there are lots of dodgy coins out there. It is advisable to stick with the reliable coins for investment purposes.

Where to buy Bitcoin online

There are two avenues to go down when looking to buy Bitcoins online. You can either buy them directly or indirectly. Buying Bitcoin directly means that actually own the asset and must go through several stages to own it. The other avenue is to buy Bitcoin as a CFD.

CFDs, or contracts for difference, give you exposure to the price fluctuations without having the hassle of finding the correct wallet and downloading it. That is not to say that buying directly does not have its advantages.

eToro – Advantages of Bitcoin CFDs

Leverage – Reduce your risk

Trading CFDs allows you to trade on leverage. Trading on leverage means that you do not need to put the full size of the trade down. Rather a fraction of it, which in turn frees up your funds for different investments.

The process to buy Bitcoins using providers like eToro are often considerably easier than figuring out which wallets you can trust and how much each exchange will charge you in commissions. For more information, scroll down for our insights the best exchanges to buy directly.

Before we go into the exact step by step guide to buying Bitcoin online, there are two more points that you should take into account.

Liquidity – Easy entry and exits

When trading through CFD providers, you are exposed to two markets liquidity.

What does that mean?

That means that it is a lot easier to get into and out of a trade. Having liquidity from both markets means that executions are instant. When buying directly through an exchange you only have that exchanges liquidity, and because cryptocurrencies are so new, it often means that you get in or out of a trade a worse price because there aren’t enough buyers or sellers in that market.

This problem does not happen with brokers like eToro.

FCA & CySEC Regulated

The final point is regulation. Crypto exchanges are not regulated, meaning there is no third party to enforce security proceedings or similar processes. An example might be if you were to lose you crypto wallet password, there is no customer support to help you gain access. Once it is gone, it is gone!

Regulation requires these types of services from brokers. If the same scenario occurred with eToro, you would have to go through a few security checks but ultimately you would not lose the funds in your account.

Other Advantages to using eToro:

  • Crypto CopyFund
  • Accepts Paypal and multiple other payment methods
  • Very low spreads and almost zero fees

How to buy Bitcoin in the UK – Step-by-Step Guide.

1) Get an Account

  • Go to etoro.com and click ‘Join Now’.

eToro - Join Now

  • Fill in the fields with your first name, last name, username, email, password and phone number. Tick the ‘Terms & Conditions’ box and click ‘Create Account’.

eToro - Create Account

  • You will then be taken to the trading platform. This is where you will be able to buy Bitcoin.

eToro - Platform

2) Deposit Funds

  • Next you must deposit funds into your account. Click the ‘Deposit Funds’ button in the bottom left corner.

eToro - Deposit Funds

  • Next you will be asked to enter how much you intend to deposit. Once you have decided, enter your payment method of choice. Your options are; Credit / debit card, Paypal, Wire Transfer, UnionPay, Sofortuberweisung, Skrill, Neteller, plus many more! If you choose via card, enter your card number, expiry date and CVV.

eToro - Payment Method

  • Scroll down the page and enter your billing details, this will include your name, address and phone number. Once complete, click ‘Submit’.

  • You now have a funded eToro account. You will receive an email to confirm this and you can tell because your equity will be shown at the bottom. To buy Bitcoin, go to the next section ‘Buy Bitcoin’.

eToro - Real Equity

  • If you want to deposit over €2000, for security reasons you must verify your identity. This is done by clicking the ‘Complete Profile’ and following the steps required. You will be asked to verify your identity using a passport or other accepted ID and also to verify your address, this can be done by sending in a copy of a utility bill or bank statement. Once verified, you can deposit over €2000.

3) Buy Bitcoin

  • Click ‘Trade Markets’ on the side bar. Then at the top you will find the different markets you can buy. Unfortunately Bitcoin ETFs are not available yet. Click the ‘Crypto’ section

eToro - Trade Crypto

  • You will then see all the cryptocurrencies you can buy. Choose Bitcoin and click the price with a ‘B’ next to it.

eToro - Buy Bitcoin

  • Next you can decide how much you want to buy. Click ‘Open Trade’ and congratulations, you have just bought Bitcoin!

eToro - Confirmation Ticket

The next option is to directly buy and own Bitcoin. To do this you must own a wallet. eToro will soon be offering you the opportunity to open a wallet with them but until that happens you must get a wallet from a different source.

Trade Now!

Get a Crypto wallet and hold Bitcoin

There are various platforms that act as intermediaries in the purchase of Bitcoin online. Before you buy Bitcoin directly you must own a wallet, which will involve getting a Bitcoin address.

Getting a wallet involves deciding on a provider to use and then either downloading a wallet or using a web browser version. Most exchanges offer you the opportunity to use their wallet or you can normally get a wallet via the cryptocurrency directly.

There are two main places to buy Bitcoins:

  1. Peer-to-Peer platforms. A great example being LocalBitcoins, which connects buyers directly to sellers. This is a simple process but there are risks attached. Make sure to do your due diligence regarding the person on the other side of the trade. Check their reputation and preferred payment method.
  2. Exchanges. Platforms like Coinbase facilitate the buying process. You can buy online, either using your credit card or via bank transfer.

You can also buy them directly from another person in cash, or make some kind of exchange. This currency is still readily available and has as many possibilities are those offered by cash.

Buy Bitcoin through exchanges (not recommended)

Below are a few examples of the best exchanges and peer-to-peer exchanges available at the moment. As highlighted earlier, one issue with these exchanges is the time it takes to verify your account.

This can be a problem because they cap the amount you can initially deposit. To deposit larger amounts can often take weeks if not months.

Coinbase Coinbase

It is the easiest and fastest way to buy bitcoins:

It offers you the possibility of having your wallet with them and of buying or selling cryptocurrencies as bitcoins in a very simple way. If you sign up with my invitation, You will earn $10 when you buy or sell $100 or more of bitcoins, Ethereum or Litecoin.

      • If you do so via bank transfer, you’ll have to wait 1-2 days (1.5% commission).
      • By using a credit card you can buy them instantly (3.5% commission).
      • You can also use your Paypal account for instant transactions (3.75% commission).

If you make lots of shopping and want everything to go faster, it is best to link a debit/credit card to your account or bank account. When you have done so, you just need to buy the Bitcoins you need, and these shall be deposited in your wallet.

Local BitcoinsLocalBitcoins

It is a platform designed to make purchases person-to-person (P2P), so one of its benefits is to be able to trade directly with other users. You can even make plans with someone in your city and buy from them with cash.

In LocalBitcoins.com sellers are the ones who choose the method of payment. In USA this is commonly done through Bank Transfer, although there are also cases in which the seller accepts PayPal or other payment methods such as Skrill, Moneygram Western Union, etc.

The purchasing system is very safe: when the transaction is initiated, the seller’s Bitcoins are deposited on the platform waiting for that payment to be made, and once the seller has been paid, the Bitcoins are transferred to the buyer.

KrakenKraken

Is another market where you can trade, buy and sell Bitcoins, or other cryptocurrencies like Ethereum. The first thing is to get the Tier 2 verification to enable you to buy a digital currencies with dollars.

In Kraken they typically take longer to verify your account than in previous proposals, but if you see that your Tier 2 verification already has a few days waiting to be verified, it is sufficient that you send an email to ([email protected]) and ask them if you are missing any data or if there is a problem. In this way I got verified that same day.

      • They allow you to make bank transfers, which are free of charge and can arrive the same day.
      • With your Tier 2 verification, you’re going to be able to transfer a maximum of $10,000.00 per month ($2,000.00 per day).
      • It is a secure platform (2FA), fairly intuitive, but a bit difficult to handle at first.

Commissions when buying Bitcoins directly

When you buy Bitcoin through an exchange you will be charged a commission. This will vary depending on the exchange you are going through but will normally lie between 1% and 5%. As an incentive for you to buy more Bitcoins, the fee is reduced the more you buy, which is not the nicest of tactics.

For example, in Coinbase they charge you a commission of around 1.49% in both purchase and sale. At LocalBitcoins you can make transactions without having to pay a commission to the platform, but commissions are necessary to maintain the system, so it isn’t negative either, as miners need to receive some sort of compensation for their block work and you’ll get Bitcoins in your wallet much faster.

But ultimately it costs you more than it would if you were trading CFDs.

Buying Bitcoin with Paypal

If you are looking to buy Bitcoin with Paypal it is very easy when using providers like eToro, however if you wanted to actually buy the asset, it is a bit more difficult.

Coinbase only allows you to buy Bitcoin with Paypal if you are a US citizen, which obviously is not ideal if you do not live in the US. They do intend to roll out this across all countries but currently it is not available.

For that reason, it is best to use eToro when using Paypal.

Buying Bitcoin with Credit Card

If you are looking to buy with a credit card, both Coinbase and eToro offer similar procedures to buying Bitcoin. Again there is one advantage eToro has over Coinbase, it’s verification process is considerably quicker.

If you do not have an account but want to buy Bitcoins quickly, Coinbases verification process is very long. It can take a few weeks before you are verified and able to buy Bitcoin, unlike eToro where you can almost buy immediately. In fact you can deposit a small amount of funds with no verification to quicken up the process. Larger amounts do require more thorough checks.

Broker Pros Min Deposit Coins Available Open Account
24 Option EU Regulated Multiple Coins Available CFD Trading $100 Local Currency Buy Bitcoin

Coinlist’s Bitcoin Recommendation

As highlighted in this page, buying Bitcoin is easy! Deciding how you buy it is down to you. For beginners we feel that buying Bitcoin through a regulated provider is considerably safer than an exchange, which can be more complicated.

When you first start out, having someone to speak to is so important and exchanges do not offer that. Brokerages are regularly audited by the FCA to make sure your needs are adhered to.

Once you have a better handle of the workings of the crypto market, then perhaps invest directly in Bitcoin. But until then, we advise risk management, and that comes in the format of regulation.

To find out quickly how to buy Bitcoin Watch our Video!

How to Buy Bitcoin in the UK: The Ultimate Guide
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