How to buy bitcoin in the UK – best place to buy

Bitcoin is by far the largest cryptocurrency in the world. It’s the coin that created the industry. But how do you buy and invest in bitcoin in the UK?

It’s super simple to purchase bitcoin, but can be confusing if you’re new to crypto and investing in general. Don’t worry, we’ve got you covered with where and how to buy bitcoin in the UK, plus everything you need to know about bitcoin too.

Best place to buy bitcoin in the UK

Let’s get right to it. The best place to buy bitcoin is with a cryptocurrency exchange – they’re built for everybody to use, from beginners, all the way to experienced traders.

Here’s the best sites to purchase bitcoin in the UK:

How to buy bitcoin in the UK

Bitcoin can be purchased on pretty much every crypto exchange out there. It’s the most popular coin, although ethereum is catching it fast! (here’s how to buy ethereum in the UK).

We’ll explain what bitcoin is, in terms of the network and the coin below. But first, the best way to buy bitcoin. Here’s how:

Simply pick a cryptocurrency exchange from our recommended exchanges above (they’re all the most popular exchanges in the UK). Then just register an account – you’ll need to prove your ID, deposit some cash and complete payment, and then you’re all set, find bitcoin and buy, buy, buy!

It’s all simple to do, the hardest bit is picking the crypto exchange (but that’s easy too).

By the way, they’re all free to use, so you can sign up to all of them and give them a try if you like – see which one you prefer. You’ll only pay fees when you actually buy bitcoin (and if you’re selling bitcoin).

They all have excellent user experience too. We only recommend the best to our readers.

Note: exchanges like these are often called centralised exchanges (CEX) as they are real companies (in fact they’re some of the biggest companies in the world). There’s also decentralised exchanges (DEX), which are exchanges that actually run on the blockchain (more on that later) – and not recommended for beginners.

Can you buy bitcoin with no fees?

It’s not really possible to buy bitcoin and crypto without paying fees. Pretty much every exchange or place to buy will charge fees as they are operating a business. However fees do vary across exchanges. Let’s run through the cheapest way to buy bitcoin…

What’s the cheapest way to buy bitcoin?

The cheapest way to buy bitcoin in the UK is to use a crypto exchange with low fees, such as eToro¹. 

Often, advanced crypto exchanges have lower fees, but they’re fairly complicated to use if you’re completely new to crypto and investing in general.  But here’s where to find advanced crypto exchanges.

Alternatively, you can use our recommended exchanges above, which are much more friendly to beginners and perfect for buying bitcoin occasionally, rather than trading regularly (and still low cost).

How much is one bitcoin to buy?

As you’re probably already aware, bitcoin is a highly volatile asset – meaning it’s price changes all the time, and sometimes by quite a bit in a short space of time. It’s definitely a wild ride when you invest in bitcoin and crypto in general – you have been warned!

Here’s how much one bitcoin is to buy in Pounds (GBP):

Although generally the price of bitcoin and cryptocurrencies are represented in Dollars (USD), and here’s how much it is in USD:

By the way, BTC is the ‘ticker’ for bitcoin on exchanges, so if it says 'purchase BTC' on a trading platform, it’s the same as purchasing bitcoin. And in the above prices, you’ll see BTCGBP and BTCUSD – that’s the trading pair. So for BTCGBP you are trading BTC for GBP.

Can I buy bitcoin with British Pounds (GBP)?

Yes. Almost every exchange (which is where you buy and sell bitcoin and crypto), will let you deposit and buy bitcoin with Pounds (GBP). There’s a few payment methods too:

• You can either send a bank transfer, which is normally free (and all automated) – and in the UK this will use open banking or faster payments, so super fast!
• Or, use your debit or credit card (or Apple pay and Google pay) to purchase (although there’s often high fees using cards).

Selling bitcoin

When you’re ready to sell your bitcoin (if you ever want to), it’s super easy to do. It’s the same process but in reverse! Simply log into your account on the exchange and sell – the exchange will take care of everything and you’ll have Pounds back in your account.

You can then withdraw this back to your bank account if you want to. There might be some small withdrawal fees, but this isn’t very common.

If you made a large profit on your bitcoin, you might have to pay tax. More on that below.

What is Bitcoin?

Bitcoin is a new currency, an evolution of current currencies, you can use it as the same way as British Pounds (GBP) or US Dollars (USD), except it’s only found online – it’s a digital currency. And, it’s not backed by any government – it’s a global currency, designed for everyone.

It was invented in 2008 by an anonymous person (or most likely a group of people), who used the name Satoshi Nakamoto.

However, it’s different to British Pounds, US Dollars and all local currencies, in almost every way. The key difference are:

1. It has a fixed supply of coins – 21,000,000 (21 million)
2. It is not managed by a central bank or government
3. It can be sent directly from person-to-person with no middleman (like a bank)

These concepts make it the perfect form of money (more on this below), and is why it has gained huge popularity in recent years – particularly with those who believe central banks across the world are mismanaging their country’s finances (we won’t get into it here, but almost every country is significantly in debt, and inflation is at record levels).

Bitcoin’s supply cannot be altered by central banks (governments), such as to increase the money supply, which happens with local currencies, such as Pounds and Dollars. 

With a fixed supply, there is no inflation, and your money retains its value forever (inflation causes your money to be worth less).

However, it’s worth noting that bitcoin is highly volatile and the price of bitcoin currently fluctuates while it’s still young and adoption is growing, so although it has trended upwards in value, the price can fall.

And you can send payments instantly across the world, in seconds, for zero or almost-zero cost, directly to the person or business you want to send to. This removes the need for a middle-man who often charge high fees (often hidden fees), can take a long-time, and can effectively block and freeze your money and accounts if they choose.

Bitcoin gives the control of your money back to you, and makes fee-taking middlemen redundant, saving you money.

Now you might be thinking, well it’s just internet money that was easily created. Well, it’s actually an incredible feat of engineering and innovation, solving technical problems that were previously thought impossible (some parts that make it impossible to hack).

The innovation is something called a blockchain, which Bitcoin is built on. And this technology has spawned a whole new asset class – cryptocurrency. 

Bitcoin source code (the code written to create it) is completely open source, which means anyone can read it, copy it and build their own blockchains. Pretty cool right?

Let’s run through what a blockchain is.

What is a blockchain?

A blockchain is a system that stores information as a permanent record, such as money (bitcoin) transactions, in the order they happened. Using a method that makes it impossible to cheat, or hack.

It’s similar to your bank statement with all of your transactions, but instead of the bank producing the statement, and only viewable by you and the bank, a blockchain permanently records every transaction made, and is publicly available for anyone to view. Almost immediately.

It seems a simple concept right? And how is that a breakthrough in technology? Well, the genius is the fact you cannot cheat the system, and that the system runs without any central control. It is decentralised…

Meaning it runs across the world, there’s no government control, so it’s available for everyone to use, whatever country they are in, and can never be shut down, and transactions can never be altered.

What’s bitcoin mining?

Bitcoin stays online and processes transactions thanks to a large network of miners. A miner is someone who uses a computer, specifically for the Bitcoin network, and their computer simply connects to the internet and processes transactions. As there are over 1,000,000 miners spread across the world, it is impossible to shut the network down.

As a thank you for supporting the network, miners are rewarded with a portion of bitcoin every 10 minutes, when a batch of transactions is processed, called a block. However, they don’t all get the reward, it is effectively a lottery for who gets it. This reward incentivises the miners to keep the network running.

More about bitcoin mining

In order to process transactions on the Bitcoin network, miners are needed to verify and confirm that transactions did happen and in a specific order – then they are then permanently recorded on the blockchain.

Miners do this by using computers dedicated to mining that solve a complex maths problem each time a new ‘block’ is produced – a block stores a batch of transactions every 10 minutes, and is where the name blockchain comes from (a never-ending chain of blocks).

The first computer to solve the maths problem gets to ‘mine’ the block, which is confirming and adding the next block to the blockchain, and they’ll be rewarded a portion of bitcoin as a reward.

Miners are essential to the security of the network, and keeping the network decentralised, which means spread out across the world and therefore never able to be shutdown.

Is bitcoin bad for the environment?

Bitcoin itself is neither good nor bad for the environment, it is entirely digital and you could think of it as it ‘lives’ on the internet, just like everything else you use on the internet and your computer, along with your phone and things like that.

However, to process transactions (and protect the network), you have to mine bitcoin. And this can use a fair bit of energy. And it’s this where it gets bad press. 

But the reality is that using energy in itself is not bad for the environment. Everything uses energy. It depends where the energy comes from that depends on if it harms the environment or not.

Bitcoin miners actually use lots of renewable and green energy (a huge majority). Because green energy is much cheaper than using coal or fossil fuels, and bitcoin miners are often mining for a profit – so it makes much more commercial sense to use green energy, such as solar and wind.

So, overall bitcoin is not bad for the environment, it just depends on the source of the power. Traditional systems, such as the current banking system and even things like gaming consume energy in much greater quantities, and the majority of energy used for those is fossil fuels.

Is Bitcoin legal in the UK?

Yes. You can legally buy bitcoin in the UK, and it’s legal to use the Bitcoin technology (blockchain) and the coin (currency) to make payments and money transfers. You can spend it however you like, or trade it, or just hold on to it.

The UK has actually committed to becoming a global cryptoasset technology hub, in an attempt to become a world leader in crypto and blockchain technology.

If you make profit on your bitcoin, and want to cash in, you might be liable for Capital Gains Tax (CGT), which is 18% or 24% of your profits (depending on your income). However, you’ll only pay this if you make over £3,000 in profit each year, in total across all of your investment earnings. (We cover tax more below.)

Is buying bitcoin safe?

It’s perfectly safe to buy bitcoin if you use any of our recommended bitcoin exchanges. We don’t suggest using one you haven’t been recommended – not all exchanges are safe.

Currently in the UK, there is no consumer protection. That means there’s no government protection or a regulator. 

Crypto is not itself protected by the Financial Conduct Authority (FCA), or the Financial Services Compensation Scheme (FSCS) – which is where you are protected up to £85,000 if anything goes wrong with the crypto company itself, such as going out of business.

However, eToro¹, is authorised to operate by the FCA, as it also offers traditional investments such as stocks and shares.

Although, just because the FCA doesn’t cover crypto, doesn’t mean using any of the exchanges we recommend are unsafe. 

They all have their own safety measures in place, such as bank grade security, and their own insurance in place to refund your money if something happens to the company and the crypto itself.

The majority of the crypto that exchanges hold are in ‘cold storage’. This means they’re in wallets that have never touched the internet and are unable to be accessed by 3rd parties (such as hackers).

Is Bitcoin for money laundering?

No, money laundering and Bitcoin is a myth. Transactions on the Bitcoin network are completely transparent (that’s actually one of the best things about it). So it’s near impossible to hide transactions. 

Plus, in order to send bitcoin to a bank account it would require you to register and verify your identity with a crypto exchange, so the authorities would be able to find out who you are if you had bad intentions.

It is far simpler to use the traditional banking system to launder money, and happens far more than in crypto. In fact, almost all of the big banks have been found processing money-laundering transactions. HSBC were recently fined £64 million for facilitating Mexican drug cartel payments.

What’s the difference between Bitcoin, bitcoin and BTC?

• Bitcoin is the network, or technically the name of the blockchain or technology.
• bitcoin (with a lowercase b) is the token (or coin) of the Bitcoin network. This is the currency.
• BTC is the ‘ticker’ that’s used on crypto exchanges, just like companies on a stock exchange, for example Apple is AAPL.

What’s a bitcoin wallet?

In order to store and access your bitcoin on the Bitcoin network (the blockchain), you’ll need a bitcoin wallet. This is a way for you to interact with the network and send and receive bitcoin. It’s like a mini bank account on the blockchain, and inside is your money.

You don’t actually need this to buy bitcoin with any of our recommended crypto exchanges above, they’ll hold your bitcoin for you – and you can access it whenever you like when you log into your account with the exchange.

However, if you want to store your bitcoin yourself, you’ll need a wallet, and then after you’ve bought your bitcoin, you can send it from the exchange to your wallet. Here’s where to find the right bitcoin wallet for you. 

The safest wallet to get is a hardware wallet, which is a real device that you need to use to make transactions. This is also called an offline wallet.

Bear in mind, with your own bitcoin wallet, you’ll be responsible for the security of it. You will be given a private key, instead of a username and password, and this is the only way to recover your wallet if you need to. Make sure you look after your private keys! (A private key can also be called a seed phrase, which is a more readable version of the key).

Buying bitcoin through an investment fund

Familiar with traditional investing? If you just want bitcoin, it’s often better to buy it yourself, as it should work out cheaper and you have control over your own assets.

However, there are some options to invest in bitcoin via traditional investments, but not directly via an investment fund, or exchange-traded fund (ETF). You can do it but it can get a bit complicated.

This is because there are currently no investment funds that directly own bitcoin – no one has been given permission yet. However, investment funds can get round this by tracking the price of bitcoin instead – although there’s not many out there.

One of the most popular is the ‘ProShares Bitcoin Strategy ETF’, which you might be able to find on your investment platform. If you haven’t got an investment broker yet, here’s the best investment platforms and best online stock brokers.

Bitcoin and tax

Bitcoin can be an immensely profitable investment for years to come. And that’s probably got you thinking about taxes right?

Well, in the UK, you’ll have to pay Capital Gains Tax on bitcoin and crypto profits. Damn!

Crypto works just the same as any other investment you might have. 

Well, unless your investments are within a Stocks & Shares ISA, Lifetime ISA or personal pension – we won’t go into those investment accounts now, but basically all your profits are tax-free!

Unfortunately, you can’t hold bitcoin within any of those accounts – holding bitcoin is treated exactly the same as a General Investment Account (GIA), with no-tax free benefits.

That means you’ll pay Capital Gains Tax on your profits when it comes time to sell your bitcoin. However, there is good news – every tax year (April 6th to April 5th the following year), you get an annual allowance of £3,000 before you have to pay any Capital Gains Tax. Whoop!

After that, you’ll pay either 18% or 24% tax depending on how much income you earn that tax year – so things like your salary. It’s a bit confusing right?!

So, if you pay the basic rate of Income Tax (20%), which is if you earn less than £50,270 per year, you’ll pay 18% in Capital Gains Tax. And if you earn over £50,270 per year (a higher rate (40%) or additional rate taxpayer (45%)), you’ll pay 24% Capital Gains Tax.

Remember this is only when you sell bitcoin, if you hold it for years, you don’t need to worry about tax until you sell – and it’s only on the profits.

Bitcoin FAQs

Can you buy bitcoin anonymously?

No. Believe it or not, bitcoin isn’t really anonymous, and it’s rarely used by criminals or for financial crime in general. Don’t believe everything you read!

In order to buy bitcoin you’ll need to verify your identity on an exchange. So that’s either using your passport or driving licence.

Sending bitcoin from an exchange to any bitcoin address is relatively anonymous, as all the transactions are sent and received from the exchange itself, rather than your personal address. So, publicly, no one can see your personal transactions, however the exchange will know.

Can you buy bitcoin instantly?

Yep! Just head over to one of our recommended crypto platforms above, get your account set up, it only takes a few minutes, and after you deposit your cash, you’ll have some bitcoin.

What does market capitalisation (market cap) mean?

With traditional investments, such as public companies (who have shares on stock exchanges), they have something called market capitalisation figure, to figure out how much the company is worth.

It’s the total amount of shares a company has (called shares outstanding) multiplied by the share price. So, if there’s 100 shares of a company, and the price is £1 per share, the market cap is £100.

With bitcoin and cryptocurrencies in general, you can use the same calculation to work out its market cap too – and therefore have a valuation for the whole project or coin. It’s a great way to see which coins are the biggest too.

In crypto, there’s also something called the ‘fully diluted market cap’ (FDMC), which is instead of using all the coins that are tradeable, it’s ‘circulating supply’, you use all the coins in existence, it’s maximum supply, and some of which may be locked away but enter the market at some point in the future.

Is bitcoin cash the same as bitcoin?

No! Bitcoin cash is not Bitcoin. They are completely different. It’s a long and technical story, but in the earlier days of bitcoin there was a bit of an argument between bitcoin developers on how to improve the number of transactions a Bitcoin block on the Bitcoin blockchain can store (in order to make transactions faster).

And this resulted in a ‘hard fork’ where a new version of bitcoin was made, called Bitcoin Cash – and it’s the version where more transactions can take place within a block. Whether or not it’s a good idea or not, it’s not the real bitcoin and you should generally ignore it. Make sure all your bitcoin purchases only say ‘bitcoin’.

What’s fiat currency?

Fiat currency is just another name for real-world currencies such as Pounds (GBP), Dollars (USD), and any other currency in the world.

Cryptocurrencies are often called digital currencies (or digital assets), as they’re completely online, and don’t have paper and coin like fiat currencies.

What’s a bitcoin ATM?

A bitcoin ATM is a real ATM machine, just like a cash machine, where you can purchase bitcoin with cash which will be sent to your own crypto wallet.

It’s very rare to find one where you can sell bitcoin for cash. They aren’t very popular in the UK although they are legal. The transaction fees are often very expensive and can be as high as 25%.

It’s often better to buy bitcoin online by using a crypto exchange account to buy and sell bitcoin (trade bitcoin).

That’s how to purchase bitcoin in the UK

There we have it – how to buy bitcoin in the UK – it’s the same process to sell bitcoin too.

And we’ve also shared lots of information on bitcoin itself and pretty much everything you need to know. We hope you found it useful.

There’s lots more to crypto however, and it’s being developed all the time. But the best way to learn more is to get involved, buy a little bit, and see where it takes you! 

You can also learn more on the official Bitcoin website too, and if you’re a bit more technical, the original Bitcoin whitepaper.