How To Buy Bitcoin UK (BTC Buying Guide)
Alright, so you want to buy some Bitcoin. First things first, a quick crash course on buying crypto in the UK in general.
Cryptocurrencies are bought through exchanges. Exchanges are platforms you need to sign up for (like forums/apps or any other website with user accounts). If you need help choosing the right one, check out our list of Best UK Crypto Exchanges. Once you’ve signed up, you can log in, deposit credits/money (preferably GBP) into your account. And then you can use that money to buy cryptocurrencies on the platform/exchange.
Buying Bitcoin in the UK has become pretty easy since CEX.io came onto the crypto scene. Just sign up, verify your account, and buy BTC with GBP.
We’ve laid out the steps on how to get started below!
How To Buy Bitcoin in the UK
- Register for an account with CEX.io.
- Verify your account.
- Deposit GBP into your account
- Click the “Buy/Sell” link
- Select “Bitcoin” and “GBP”.
- Enter the amount of GBP you want to trade for BTC, or how much BTC you want to buy.
- Review the details.
- Click “Buy”
How To Get Started
Setup Your Account
CEX.io is definitely our go-to crypto trading platform in the UK. They offer a great range of cryptocurrencies and they are UK based so it's easy to sign up and use GBP to trade.
The first thing you'll need to do is sign up for an account from their homepage.
Verify Your Account
After you've created your account, to unlock higher limits you'll need to verify your account. You can do this by clicking on your name top right then clicking on "Verification", this will take you to a separate subdomain where you can verify your details. You will have to fill out all of your personal information including any documents required, don't worry about this, every exchange requires it. Cryptocurrency exchanges need to request this information to abide by local laws.
Fund Your Account
You can now deposit money in your account, there are a few different options which you can see below. If you have any issues you can always reach out to their support team.
Once you’ve funded your account with GBP, you’re set to buy some crypto.
CEX.io caters for all users, so they have both simple and advanced ways of buying cryptocurrency. Essentially you can just choose which Cryptocurrency you want to buy and which local currency you want to use, in this case GBP.
Where To Buy Bitcoin
We reviewed all of the exchanges available in the UK and we highly suggest using CEX. It far surpasses the other exchanges as the best option due to it's customized platform and ease of use.
CEX is by far our favourite exchange for people in the UK. Their platform is incredibly easy to use and allows you to buy Cryptocurrencies with GBP. They have their HQ in the UK so it allows from some great benefits like faster payments and localised support.
How to Pay for Your Bitcoin
Nowadays, it’s really easy to buy Bitcoin from a digital marketplace and choose from the variety of available payment options. But it wasn’t always like that.
At first, the only way to pay for Bitcoin was through a bank transfer that would take days to complete. Most crypto exchanges didn’t support fiat deposits or fiat to crypto trading, so you would have to look for a third-party platform to convert your fiat currencies.
The increased demand and interest that traders have taken in this coin has resulted in exchanges adding more and more payment methods to keep their customers and expand their market into new international territories.
Let’s take a look at the most popular ways of buying Bitcoin in the UK today.
Buying Bitcoin With Your Bank Account
One of the least complicated and earliest methods to buy Bitcoin was to link your Bitcoin account with your UK bank account. These payments are quite fast and inexpensive compared to other online payment options. Plus, today there are a number of payment services to speed up the process even more.
For UK traders, the best crypto exchanges for making bank transfer deposits are the local exchange CEX.io and the popular US-based brokerage Coinbase. Both platforms support trading through UK bank accounts and allow their customers to pay in GBP. They provide high liquidity, high buying limits, and affordable fees.
As a UK resident, you can choose between a SEPA transfer, if you want to pay in EUR, or a Faster Payments transfer to deposit GBP. Faster Payments Service is a UK banking initiative that aims at making bank transfers faster and more secure. These payments usually take 1-3 days to complete and incur a 1.49% fee per trade on Coinbase or no fee at all with CEX.io.
Sometimes, if you want to trade on an international exchange because you prefer their offer, instead of regular bank transfer, you would have to pay through a wire transfer or SWIFT. We suggest avoiding these cross-border payments if you’re in a hurry as they could take up to one week.
Buying Bitcoin With a Credit Card or Debit Card
Contactless payments have become an inseparable part of our busy lives. In 2018, the BBC reported that debit card payments have surpassed cash payments for the first time ever in day-to-day spending. It’s no wonder that this payment option is popular in the Bitcoin world too.
So, what crypto exchanges accept card payments from UK traders? The most popular options are CEX.io, Coinbase, and Coinmama.
Now, one thing you need to know about “paying with plastic” is that convenience results in higher fees. To purchase Bitcoin in a matter of seconds comes at a hefty price. On top of that, you’re in for lower purchasing limits on card payments too.
If you’re a UK resident, you’ll get the fairest deal using CEX.io. The platform supports VISA and MasterCard payments with a minimum daily deposit of $20. GBP deposits made with UK-issued cards incur an incredible 1.49% commission fee!
In comparison, Coinbase charges a fixed 3.99% fee per transaction and only accepts debit card payments. The buying limit stands at around $7,500 per week. Coinmama charges a 5.00% fee on credit and debit card purchases but you get to purchase up to $5,000 worth of BTC per day or $20,000 per month.
Buy Bitcoin With Cash
Bitcoin’s founder envisioned that his digital currency would mark the onset of a global decentralized payment system, one where our money transactions would be conducted without the interference of third-party financial institutions and banks.
But buying Bitcoin online on cryptocurrency exchanges means that you still have to link your account to an existing bank account under your name and reveal a lot of personal details. You still spend extra money on service costs for their escrow services.
If you’re a UK trader who wants to trade anonymously, i.e. buy Bitcoin with cash, you can do this on the small number of decentralized peer to peer exchanges such as LocalBitcoins and Paxful. These platforms allow sellers to advertise their Bitcoin orders and a lot of them would accept cash payments.
Or you can meet face to face so you can pay them in cash. However, this option is not always the safest one, so if you feel anxious about it, you can ask for the seller’s bank details and pay in cash over the counter.
Another popular option for those of you who prefer paying in cash is to use a Bitcoin ATM. According to Coin ATM Radar, there are 271 Bitcoin ATMs in the UK. Usually, you’ll find these machines in restaurants, airports, and retail stores.
Buy Bitcoin With PayPal
In the Bitcoin community, there is a large group of traders who own a PayPal account and use its payment services. Some even prefer it over debit cards and argue it offers higher protection of their funds and sensitive data.
If you happen to be a PayPal user yourself, you’re probably wondering if you can purchase Bitcoin with the money on your PayPal balance. The answer is yes, you can, although the available options are quite limited because exchanges want to protect themselves from potential chargeback frauds. You should also expect to pay a larger service fee.
Again, our CryptoHead team recommends UK traders to use CEX.io because it allows you to connect the platform account with the same Visa/Mastercard linked to your PayPal account. This makes it easier for you to fund your account by transferring funds from the PayPal balance.
Unfortunately, this type of indirect PayPal purchase is the only one available on centralized exchanges unless you decide to use a decentralized one like Paxful and find a seller that accepts PayPal payments.
Buy Bitcoin With Another Crypto
Bitcoin might be the first and most popular cryptocurrency in the world, but there are plenty of other cryptocurrencies to choose from if you want to make your portfolio more diverse, or if your strategy involves not putting all your stakes into one coin.
After a while, you might want to exchange these altcoins for Bitcoin. To do that, you need to find a reliable altcoin exchange with high liquidity. We recommend using Binance or Bittrex, two high-volume exchanges whose services are used and praised by millions of traders around the world.
As a UK trader, you can choose from 100 different tokens and over 450 corresponding trading pairs. First, check whether the platform supports the altcoin that you want to trade against Bitcoin. If it does, create an account and deposit the cryptocurrencies from your wallet address. Click on the “Buy” section, find your trading pair, and specify the purchasing amount.
Buy Bitcoin Anonymously
The crypto industry has been increasingly targeted by hackers in the last couple of years because they know these platforms store a lot of sensitive data such as credentials, card details, and most importantly, large sums of money. Even if they keep the majority of them in cold storage, they’re still not 100% safe.
One of the ways to tackle cybersecurity threats and data breaches is for crypto exchanges to perform mandatory KYC checks on their customers and to track suspicious transaction patterns. But this takes centralization to another level, according to some traders, who feel like these checks are a direct invasion of their privacy.
Luckily, there still exist a couple of options for those who’re seeking for alternatives to be able to buy Bitcoin anonymously in the UK.
One of them is to use the nearest Bitcoin ATM, only make sure it’s one that supports cash as well as card payments and be prepared to pay a higher transaction fee than usual.
The second option is to use a decentralized exchange like LocalBitcoins where you only need to provide your email address to register for an account. Centralized exchanges, on the other hand, only allow you to trade cryptos without performing a KYC check but the withdrawal limits are really low.
Buying Bitcoin OTC (Over-The-Counter)
What if you’re an institutional investor and need a suitable platform for purchasing large amounts of Bitcoin? While you can certainly use a regular cryptocurrency exchange (with some setbacks), we recommend joining an over the counter (OTC) desk instead.
First of all, these desks are in a way decentralized, unlike regular crypto exchanges where you still need their authorization to make an order. OTC desks offer an interface where buyers and sellers meet each other and they provide high liquidity – a key element to buying a substantial amount of coins.
Moreover, when buying a lot of BTC at once, traders can experience “slippage”, i.e. paying an average price for your coins because you’re buying up both the lowest and the highest orders that the exchange has to offer. With OTC platforms you avoid this slippage and buy Bitcoin at a fixed price.
The most popular OTC platforms at the moment are Circle, ItBit, and Genesis. In an answer to the growing interest of institutional traders in Bitcoin purchases, regular crypto exchanges such as Kraken and Bitbuy are also creating space for their own OTC desks.
How to Store Bitcoin
There’s another important thing to take into account before you buy your first Bitcoins. You need to decide on a Bitcoin wallet to store them after. In reality, you’re not storing your BTC but the private key (an encrypted address, i.e. a string of digits and letters) that gives you access to your Bitcoin balance.
So, what types of wallets can you choose from?
Software or online wallets are right now the number one choice for traders worldwide. Main advantages: easily accessible and usually free. However, allowing platforms to store your private key online is highly risky!
Yes, it’s true that they integrate state-of-the-art security methods to prevent hacking attacks, but we’ve witnessed numerous unfortunate scenarios in the past.
Instead, we advise you to save some money and invest in the newest wallet invention – the hardware Bitcoin wallet. The USB like devices store your private keys offline, disconnected from the Internet, and far from hackers’ greedy hands. Even if you lose them, you can recover your funds with the recovery or “seed” phrase you get during the activation process.
Our top hardware wallet recommendations are Ledger Wallet Nano S, Ledger Wallet Blue, and Trezor. If you can afford to purchase a more expensive and extremely secure wallet, you should get either one of the Ledger wallets. If you’re on a tighter budget, Trezor is a good value for the price.
Frequently Asked Questions
How Do I Buy Bitcoin in the UK?
In the UK, traders purchase Bitcoin on regulated cryptocurrency exchanges. Since 2020 the Financial Conduct Authority (FCA) has been put in charge of crypto businesses, i.e. businesses carrying out crypto-related activity. The FCA has the role of an anti-money laundering (AML) and counter-terrorist financing (CTF) supervisor. Therefore, crypto exchanges are required to comply with the FCA AML and CTF policies, perform KYC checks on their customers, and monitor and report suspicious trading activity.
What Is the Easiest Way to Buy Bitcoin?
The easiest way to buy Bitcoin in the UK is to register and trade on a cryptocurrency exchange of your choice. Nowadays, you have plenty of options to choose from depending on your trading needs. If you’re looking for a straightforward user-friendly platform that has basic to advanced features and reasonable fees, we recommend using CEX.io. If you’re interested in buying Bitcoin with another crypto and placing advanced trading orders, Binance is the right platform for you.
How Do I Buy My First Bitcoin?
If you’re a crypto beginner, you might want to consider starting off on fiat to crypto exchange. This will save you extra time and money because you won’t have to use a second platform to convert your GBP or EUR into another crypto and then purchase Bitcoin on the initial exchange. For example, CEX.io allows you to make fiat deposits either through a Faster Payments bank transfer or using your Visa/MasterCard. Card payments are faster but they incur higher fees.
Is Bitcoin Legal in the UK?
Yes, Bitcoin is legal in the UK. However, until 2018, Bitcoin was neither regulated nor its potential was recognized by the UK government and financial authorities. Finally, in November 2019, the UK Jurisdiction Taskforce of the LawTech Delivery Panel published the Legal Statement on Crypto Assets and Smart Contracts and addressed Bitcoin’s and other cryptocurrencies’ status and legal treatment. Taking into consideration cryptocurrency characteristics such as intangibility, decentralization, and the use of cryptography and blockchain technology, the paper stated that they’re to be treated as property and made legal.
Which Countries Have Banned Bitcoin?
At the moment, Bitcoin is unrestricted in 129 out of 257 countries or regions in the world according to Coin Dance, a reliable site for Bitcoin and blockchain statistics. Bitcoin is restricted in countries from the Asian and African continents including China, Egypt, Nepal, Qatar, and Zambia, Morocco, and American Samoa. Bitcoin is completely illegal in the following 7 countries: Afghanistan, Bangladesh, Saudi Arabia, Vietnam, Algeria, Bolivia, and the North Macedonia.
Do I Need to Pay Tax on Bitcoin UK?
Yes. According to the Legal Statement on Crypto Assets and Smart Contracts, Bitcoin is now taxable and subject to Capital Gains Tax (CGT) or Income Tax (IT) depending on the size of the trade in question and whether or not you’re making a profit by exchanging or selling Bitcoin.
How is Bitcoin Taxed in the UK?
If you exchange Bitcoin for other assets or use it to buy goods and services, you will have to pay taxes. The gains are calculated from the disposal. If you receive Bitcoin as an employment income, these payments are also liable to taxation (income tax) and National Insurance contributions.
What Is the Minimum to Buy Bitcoin?
The minimum amount required to buy Bitcoin depends on the platform you’re using. For example, the popular crypto broker Coinbase will let you purchase a tiny amount of Bitcoin for a bare minimum of $2. However, considering that 1 BTC is worth over $9,000 at the moment, what’s the worth of a $2 investment? That’s why the recommended minimum investment is $500, an amount that could bring you some return.
How Can I Buy Bitcoins Without ID in the UK?
In the UK, if you want to buy Bitcoin without having to provide a copy of a government-issued ID in order to verify your identity, you can either use a Bitcoin ATM and pay with cash or card or join a decentralized cryptocurrency exchange where you can register by using your email address only. The only drawback is that Bitcoin ATMs incur very high fees, whereas decentralized exchanges include purchasing limits.
Disclaimer: Digital currencies and cryptocurrencies are volatile and can involve a lot of risk. Their prices and performance is very unpredictable and past performance is no guarantee of future performance. Consult a financial advisor or obtain your own advice independent of this site before relying and acting on the information provided.