The UK has embraced Bitcoin and cryptocurrencies in a big way. Representing one of the largest cryptocurrency markets in the world, it is easy to buy and trade cryptocurrencies in the UK.
Trading and owning cryptocurrencies in the UK is legal, and while bitcoin is not considered legal tender, cryptocurrency exchanges are regulated by the Financial Conduct Authority (FCA). This means they must comply with AML and KYC regulations, which helps ensure their credibility and stability.
Aside from classifying cryptocurrencies as "property," the UK has not enacted any broader or specific regulations on cryptocurrencies, so the cryptocurrency market in the country is currently quite liberal.
Investors should note, however, that they are subject to capital gains tax on profits from cryptocurrency trading above £12,000. Similarly, income tax is due if you happen to receive payment for goods and services in cryptocurrency.
On this page you will find a closer look at the history of cryptocurrencies in the UK and The best way to buy cryptocurrencies in the UK.
What is the best way to buy cryptocurrencies in the UK?
The best way to buy cryptocurrencies in the UK is to use a cryptocurrency exchange.
There are many good exchanges based in the UK, such as Crypto.com i eToro. Most of the top international exchanges - such as Coinbase, Kraken i Binance - is also open to UK customers.
Ultimately, choosing the best UK cryptocurrency exchange will be somewhat subjective, as they all have different features and selling points.
Some of the most important factors in choosing a good cryptocurrency exchange for buying and selling Bitcoin include primarily security, but also reasonable fees, intuitive software/UI and relatively fast transactions.
If you want to trade altcoins (coins other than bitcoin), you will also want to choose a cryptocurrency exchange with multiple trading pairs.
One small thing to keep in mind as a beginner is that some exchanges such as Coinbase, allow you to purchase cryptocurrencies directly from an exchange using a debit or credit card. Others, however, require you to deposit GBP (or other national currency) into your account at the exchange and then exchange GBP for the cryptocurrency of your choice, such as Bitcoin.
Below are some of the best cryptocurrency exchanges in the UK:
Is it easy to buy cryptocurrency in the UK?
Buying cryptocurrencies in the UK is easy. When registering an account with an exchange, you will need to confirm your identity by completing various KYC and AML processes, which usually require you to upload scans of your identity documents.
Once you have completed these steps, however, you can easily start buying cryptocurrencies and trading them. If you are trading and have a fairly large amount of cryptocurrencies, one additional thing you may want to consider is buying a hardware wallet.
Are cryptocurrencies legal in the UK?
Yes. Buying, trading and owning cryptocurrencies is perfectly legal in the UK. Cryptocurrencies are considered property (i.e. an asset) in the UK. As such, you will have to pay capital gains tax on gains from trading cryptocurrencies over £12,000.
If you are a basic-rate taxpayer (i.e., if you have income between £12,501 and £50,000), you will pay 10% on any capital gain above £12,000. If you are a higher-rate taxpayer (i.e., with income between £50,001 and £150,000), you will pay 20%.
Can I buy Bitcoin and Ethereum in the UK?
Yes, the vast majority of major cryptocurrencies are available for trading on UK-based cryptocurrency exchanges. Likewise, many international exchanges are available to UK customers (e.g. Coinbase, Binance, Coinmama, Bitpanda), so any cryptocurrencies that cannot be found on UK platforms can usually be found legally elsewhere.
In addition, according to Coin ATM Radar, the UK has a handful of Bitcoin ATMs. So if you live in Manchester, Leeds, Liverpool and Glasgow, you may be able to buy Bitcoin and other cryptocurrencies directly.
What is the cheapest way to buy cryptocurrency?
The cheapest way to buy cryptocurrency in the UK is to use a cryptocurrency exchange. Specifically, find an exchange with low fees for buying and/or trading.
In the UK, Crypto.com charges £0 for depositing GBP into an account via bank transfer, which can then be used to purchase cryptocurrencies.
Can I sell bitcoin and other cryptocurrencies in the UK?
Yes, just as you can buy Bitcoin in the UK, you can also sell and trade it. If you already have Bitcoin on another exchange or in your wallet, you can transfer it to your new cryptocurrency exchange and then sell it for another cryptocurrency or for fiat.
Again, you'll want to check out the best UK cryptocurrency trading platforms. Likewise, if you bought bitcoin on your current cryptocurrency exchange, you can just as easily exchange it for another cryptocurrency or fiat currency.
Note that if you sell bitcoin (or any other cryptocurrency) for fiat currency, you will have to pay capital gains tax if the profit exceeds £12,000.
The views and opinions expressed here are solely those of the author and should not be taken as financial advice either. Every investment and transactional activity involves risk, so you are advised to do your own research when making any trading, investment or financial decisions.
