How to Buy Bitcoin in the UK: The Ultimate Guide

If you want to learn everything you need to to know about how to buy Bitcoin in the UK, the process is actually much simpler than you might think. All you need is to open a trading account with a trusted online broker or Bitcoin exchange and start trading. However, there are lots of different providers out there, so finding the best one for you isn’t always easy.

To help you out, we’ve reviewed the best UK platforms on which you can obtain the Satoshi Nakamoto digital currency, Bitcoin. We’ve also provided a step-by-step guide that walks you through how to purchase Bitcoin in the UK. Let’s get to it!

How to Buy Bitcoin in the UK in 3 Simple Steps

In a hurry and no time to read this guide? No problem! Simply follow the steps below and click the link to start investing Bitcoin.

How to Open a Bitcoin Trading Account in the UK

Opening a Bitcoin trading account in the UK is fast and easy with the best Bitcoin brokers. Let’s take a look at the top platforms on which you can buy and sell Bitcoin.

Learn How the Bitcoin Market Works in the UK

Before you learn how to acquire Bitcoin online, it’s a good idea to have an understanding of how the market works. Here’s some background information to get you up and running.

What is Bitcoin and how do you trade it?

Bitcoin was created by Satoshi Nakamoto and is the world’s most famous cryptocurrency which gained worldwide fame in 2017 and 2018 during its spectacular rise and fall, peaking at close to £20,000 in December 2017 before crashing to below $4,000 in November the following year.  The value of Bitcoin has since returned to more reasonable levels with it sitting at just over $9,300 at the time of writing.

Bitcoin is a form of decentralized, digital currency that is exchanged on a p2p exchanges known as the Blockchain technology. Bitcoin transactions are tracked on a public ledger with Bitcoin “miners” verifying each transaction and updating the ledger for everyone.

While the maximum number of Bitcoin that can exist is 21 million, it is possible to trade Bitcoin in fractions, down to 0.00000001 BTC, known as a Satoshi.

You can buy and sell Bitcoin directly via a Bitcoin wallet, where you exchange BTC or fractions that you own. This is done either via an online broker or cryptocurrency exchange. Alternatively, you can trade Bitcoin CFDs (contracts for difference), meaning you speculate on the price volatility without owning the underlying assets. This is exclusive to online brokers.

How to earn from buying Bitcoin in the UK

To make money investing in Bitcoin in the UK, you have to respect the old adage to “buy low, sell high”. Unless you have a really advanced setup on your hands to allow you to mine Bitcoin, the way to make money via Bitcoin is through buying and selling the asset Bitcoin is highly volatile, so there are plenty of opportunities to trade it profitably. However, it also means there’s a significant risk of losing money when you trade Bitcoin.

Bitcoin is of interest to both day traders who look to make small profits due to its volatility, as well as investors who acquire Bitcoin with a longer-term outlook. As well as buying and selling Bitcoin, you can trade it against fiat currencies, such as GBP and USD, as well as against other cryptocurrencies, like Ethereum and Litecoin.

What regulations are in place for buying bitcoin in the UK?

Like many other countries, the UK does not yet have cryptocurrency-specific laws. Nevertheless, there are several trading platforms that are regulated by the Financial Conduct Authority (FCA) and allow users to buy Bitcoin in the UK. Many unregulated, offshore crypto businesses are also accessible from the UK.

We always recommended buying Bitcoin with a regulated Bitcoin exchange, as it ensures your bank account and funds will be protected and you’ll be entitled to compensation should your chosen broker ever cease trading.

A key point to note is that in the UK, realized gains from Bitcoin trading must be reported and are subject to capital gains tax.

What Risks are Involved with Buying Bitcoin in the UK?

Before buying Bitcoin in the UK, there are a few risks you need to know:

What’s the Difference between Trading and Investing in Bitcoin?

If you believe that Bitcoin will continue gaining in value in the long-run, your profile fits more that of an “investor”. As such, you may prefer to order Bitcoin directly, store it in your Bitcoin wallet and hold it for the long run. While you assume the risk of your predictions not materializing when you invest in this way, there are no costs to holding BTC. Furthermore, you will not pay capital gains tax so long as you do not sell.

However, if your strategy is to use Bitcoin’s volatility to your advantage, then you match the profile of a trader. In this case, you will find it more suited to trade Bitcoin via CFDs so as to avoid holding BTC physically. CFD trading will allow you to short Bitcoin, meaning you speculate on prices going down, and use leverage, meaning you borrow capital from your broker to make larger trades.

Learn How to Buy Bitcoin in the UK

There are many ways to obtain Bitcoin in the UK, and most of them are easy. Let’s review a few main ones.

Buy Bitcoin with a Debit Card

Many of the best Bitcoin brokers and exchanges in the UK allow you to acquire Bitcoin with debit card.

Debit cards are one of the most convenient ways to acquire Bitcoin in the UK directly from your bank account. Simply create an account with a top digital currency broker (any of the ones reviewed above) and fund your account via debit card to get started. You’ll often be able to do this free-of-charge, and debit card deposits are typically processed instantly so you get Bitcoin straight away.

Buy Bitcoin with a Credit Card

Buying Bitcoin with credit cards is not fundamentally different from buying with a debit card, albeit with a few caveats. The first is that it is not uncommon to see brokers ask for proof of ID to buy Bitcoin via credit, particularly since Bitcoin trades cannot be cancelled.

Some trading platforms also charge you fees when you deposit with credit card, which may be a percentage of the transaction or a fixed amount.

Buy Bitcoin with PayPal

PayPal is one of the most popular methods to fund your account with a Bitcoin broker, as it’s fast, cheap and super secure. Many of the top regulated Bitcoin brokers in the UK, such as eToro, accept PayPal as a form of payment, but it’s not as widely accepted as bank cards.

Buy Bitcoin without ID

Many brokers in the UK require ID in order to verify your account before you begin trading. However, if you wish to acquire Bitcoin anonymously, you still have a few payment options.

The first and simplest is to find a broker that does not require ID. Platforms like Changelly, Shapeshift or CryptoRocket allow you to obtain Bitcoin directly (or via CFDs) anonymously.

Another option is to use Bitcoin ATMs and deposit cash anonymously in exchange for Bitcoin in your digital wallet. While this option can be attractive, it is often hard to find  Bitcoin ATMs and is rather time-consuming.

Lastly, you may also choose to get Bitcoin directly without a regulated Bitcoin exchange, for example via peer-to-peer platforms like LocalBitcoins. Nonetheless, this is definitely a riskier proposition, particularly as fraud is rife in the Bitcoin space.

Open an Account to Buy Bitcoin in the UK

Now that you understand how to acquire Bitcoin in the UK, let’s review how to open an account on our recommended Bitcoin broker, eToro.

Step 1: Sign Up

The first step is to sign up. Opening an account is quick & easy, but you will have to provide basic information and a valid phone number.

The next step is to fill a short questionnaire about your sources of funds and investment style. First, you will have to provide your address, occupation and answer questions about your sources of income. You will then be asked a series of questions about your risk tolerance, investment horizon and trading experience.

Once you finish the questionnaire, you can start trading, albeit with a limited amount. To access all the features of the platform, you will still have to submit a few more identity documents to verify your account.

Step 2: Deposit

Before you can obtain Bitcoin, you need to fund your account. eToro offers a range of payment methods, including a bank account debit card, PayPal and bank transfer, so you simply need to select your preferred payment method, enter your details and the desired amount, then hit confirm.

Step 3: Buy Bitcoin

Using the search function, look up Bitcoin and click “Trade”. You then need to choose whether you want to acquire the underlying asset or trade a CFD.

Specify the dollar amount or number of units you want to purchase and a stop loss limit if you want. The default order type is a market order, but you can opt for a limit order instead. Before pulling the trigger, take a minute to review the exposure the trade entails. Once you’re happy, hit ‘Buy Button’ and you’ll have bought some Bitcoin!

Conclusion

Now we’ve taken you through how to buy Bitcoin in the UK, you can put your knowledge into practice. All you need to do is sign up with one of the best Bitcoin brokers and you can then buy Bitcoin with PayPal, a debit card or credit card. If you do want to acquire Bitcoin, we advise you to research the market and understand the risks of trading this volatile cryptocurrency before you put your money on the line.

If you’re looking for the best UK Bitcoin broker, we suggest going with eToro. With 0% commission, a range of payment methods and a Bitcoin wallet, this broker ticks all the boxes. Simply click the link below , sign up and you’re ready to obtain Bitcoin.

FAQs

What are the main ways to trade Bitcoin?

You can buy Bitcoin directly from online brokers or a Bitcoin exchange and store it in a digital wallet, or trade it via CFDs. The decision to hold BTC or trade CFDs depends entirely on your aims and investment horizon.

How volatile is Bitcoin?

Bitcoin is a highly volatile asset. In the past, Bitcoin has frequently jumped or fallen by more than 30% in a single day!

Do I need a crypto wallet to trade Bitcoin?

If you want to own the underlying assets, then yes. Luckily, platforms like eToro come with a companion Bitcoin wallet in which you can safely store your coins.

Are there laws on trading Bitcoin in the UK?

At the time of writing, there were no specific laws on cryptocurrency trading in the UK. However, any gains on Bitcoin trades must be reported and will be taxed as capital gains.

How much money do I need to buy Bitcoin in the UK?

This depends on the minimum deposit of your chosen broker. For example, you need at least $200 to purchase Bitcoin on eToro.

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