What is Bitcoin?
Bitcoin is a decentralised cryptocurrency created by the pseudonymous Satoshi Nakamoto in 2009. It was the original cryptocurrency and it is by far the largest in terms of market cap. There is a finite supply of 21 million Bitcoins, but you can buy small fractions of a single Bitcoin. The smallest unit is the satoshi, which is a one hundred millionth of a single Bitcoin.
Bitcoin must be mined. This involves a computer solving a complex equation in order to verify transactions on the network, known as the blockchain. Mining has grown increasingly difficult, and the reward on offer halves every four years, so the increasing scarcity and mining difficulty has helped push up the price.
Bitcoin reached an all-time high of almost $20,000 in 2017, but then treated the following year. However, a halving took place in 2020, and that kick-started a bull run, which saw the price surge past the $50,000 mark in early 2021. Bitcoin was initially designed to power quick, secure and cost-effective peer-to-peer transactions, cutting out the middlemen (banks and financial institutions) in the process.
Yet there are now cryptocurrencies that facilitate quicker, cheaper transactions, and many people buy Bitcoin UK as they see it as a store of value. For that reason, Bitcoin is regularly referred to as digital gold.
Where and How to Buy Bitcoin UK
Anyone wondering how to buy Bitcoin UK can choose from a broad range of options, and it’s possible to use a range of options including the ability to buy Bitcoin with PayPal to fund the purchase. You can visit a UK Bitcoin exchange to buy, an international crypto exchange or a decentralised exchange. Alternatively, you can buy Bitcoin directly from somebody that already holds Bitcoin by visiting a site like LocalBitcoins.com.
The best place to buy Bitcoin UK depends on your particular circumstances. Each option has pros and cons, so this how to buy Bitcoin UK guide explains your options in detail, allowing you to make your decision from a position of strength.
Best UK Bitcoin Exchange Sites
Most Brits buy Bitcoin from an international exchange, but there are a few established Bitcoin exchange UK sites to consider:
Zeply is a new online platform that allows customers to buy and sell Bitcoin, with little to no fees involved. For more detailed information, you can read our in-depth Zeply review.
This is one of the leading crypto exchanges and it was founded in the UK. It was founded back in 2013 to meet demand among people wondering how to buy Bitcoin UK, and it has gone from strength to strength ever since. CEX.IO has an instant exchange service that allows users to convert between various cryptocurrencies and fiat currencies, including GBP, with just a few clicks. It also offers staking, which allows you to earn interest on your coins while they sit in your Bitcoin account UK.
Coinfloor is another established UK-based exchange. It allows you to buy Bitcoin UK along with Ether and Bitcoin Cash. The site offers robust security, a reasonable fee structure and excellent customer service, and it is a reputable business based at 1 Quality Court in the City of London.
This UK-based site allows customers to buy Bitcoin along with Bitcoin Cash, Ethereum, Litecoin or XRP. It also allows you to join a Bitcoin mining pool if you so desire.
You can also buy Bitcoin direct from fellow Brits by visiting a site like localbitcoins.com. You will see all the different sellers at that time, with the payment set to “National bank transfer: United Kingdom”. It will tell you the price of the Bitcoin and the limits the seller will accept, and you can click “Buy” to make it happen. Sites like localbitcoins.com allow you to buy person-to-person in an easy, fast and secure fashion.
Best International Bitcoin Exchanges that Accept GBP
As previously mentioned in this how to buy Bitcoin UK guide, most Brits choose large, international exchanges when they want to purchase BTC. These are the most popular sites:
This is the most popular site among UK investors, according to a survey from the Financial Conduct Authority, and it is easy to see why. Coinbase is a very user-friendly site. There are no intimidating trading charts, and the design is chic and clean. It provides simple instructions to help you buy Bitcoin UK, sell it and exchange it, and more advanced users can choose Coinbase Pro. On the downside, Coinbase charges higher fees than some of its rivals, it does not offer as many cryptocurrencies as sites like Binance, and customer service is slow, but Coinbase makes a very strong overall choice.
Binance is the world’s largest cryptocurrency exchange by trading volume and traffic. The aforementioned Financial Conduct Authority survey found it was the second most popular site among UK investors. It allows you to buy Bitcoin UK alongside a huge range of altcoins, and you can also trade Bitcoin for leverage and mine it there. The fees are attractive, especially if you use Binance Coin to pay for them, and the analytical tools are great, but it can be a little intimidating for newcomers that are figuring out how to invest in Bitcoin UK.
This is a very well-established crypto exchange with a strong security record. It offers high limits, and you might find it is the cheapest way to buy Bitcoin UK in certain situations. Kraken is a trusted site that handles large volumes on a daily basis, and it has high liquidity and low slippage, but it is not quite as user-friendly as Coinbase.
This is a leading cryptocurrency exchange renowned for providing a wide selection of cryptocurrencies, including Bitcoin. It is fully regulated and compliant in the United States, and it welcomes British investors that want to buy Bitcoin UK. It has a quick verification process, a secure authentication system and fees that are easy to calculate.
This prominent exchange supports more than 200 cryptocurrencies, and GBP is one of the four fiat currencies accepted. It has been hacked in the past, so there are security issues, but it has performed well on that front in recent years and it also has low spreads and high liquidity, so it continues to compete with the likes of Binance and Coinbase.
Gemini, Zeply, Bitpanda, Bitstamp, Huobi and the increasingly popular eToro also accept pound sterling and allow you to buy Bitcoin along with several other cryptocurrencies. All of these sites that allow you to buy Bitcoin UK are centralised exchanges, meaning they are controlled by a particular company.
Bitcoin is a decentralised cryptocurrency, meaning nobody controls it, and you can follow this ethos by buying Bitcoin UK from a decentralised exchange. Bisq is an open-source, peer-to-peer desktop application that allows you to buy and sell cryptocurrencies. You can also check out the likes of JellySwap and SushiSwap if you like the idea of a decentralised exchange. Just bear in mind that decentralised exchanges are not the most user-friendly sites, and functionality can be limited, so tread carefully if you are new to Bitcoin investment UK.
How to Buy Bitcoin UK
Once you have chosen your preferred site, you can now buy Bitcoin. UK buyers go for Coinbase more than any other site, so this step-by-step guide teaches you how to buy Bitcoin UK at Coinbase, but the process is pretty similar at rival sites:
- Click on the blue “Get started” box at the top right of the homepage.
- Enter your first name, last name and email, choose a strong password and certify your age and that you agree to the terms and conditions.
- Click “Create account”.
- You will then have to click on a link sent to your email address to verify it, and complete a KYC (know your customer) process.
- You will have to provide a scan of photo ID such as a passport or driving licence, and prove your address. This can take a day or two, but some users find the process to be quicker. An email will tell you when the process is complete.
- Once you have registered, visit the site, log in via the two-factor authentication system and click on the blue button that reads “Buy / Sell” near the top of the dashboard.
- This will trigger a window that allows you to buy, sell and exchange crypto. It will be set to “Bitcoin” and “One time purchase” automatically. Make sure the fiat currency is set to GBP and enter the amount you wish to spend when buying Bitcoin UK.
- You will have to link a payment method. When people buy Bitcoin UK, debit card is the most common payment option, but there are a few other accepted payment methods.
- When this is complete, click “Preview Buy”.
- A new window in the centre of the screen will tell you the exchange fee and how much BTC you will receive. If you are happy, click “Buy Now”. You may have to enter a code sent to your mobile the first couple of times.
- The Bitcoin will rapidly appear in your account. You can now transfer it to an external crypto wallet or leave it in the exchange hot wallet.
Where to Store Bitcoin
Some people choose to leave their BTC in their exchange wallet after completing a Bitcoin buy UK. This is certainly convenient, and it means you do not have to pay a withdrawal fee, but it is generally deemed an insecure way to store Bitcoin long-term. You might decide to leave it there if you plan to trade it, but most people move their BTC to an external wallet.
There are paper wallets, full node wallets and other hot web-based wallets, but the two most common options are software wallets and hardware wallets. A software wallet sits on your desktop or mobile, and you can use it to send and receive Bitcoin. The best software wallets are very convenient, well designed and easy to use. However, they are not fully secure, as your phone or desktop will be connected to the internet and you can therefore fall prey to hackers.
For that reason, many people consider a hardware wallet from a company like Trezor or Ledger to be the safest option. You have to buy it, which is one downside – you can buy direct from the providers, or from a site like Amazon – but it offers cold, offline storage. Theoretically, that means your wallet cannot be hacked. The latest hardware wallets also have OLED screens and other advanced features, while they can be linked up to software wallets to make them more user-friendly.
Tips on How to Buy Bitcoin UK
Regardless of where you decide to buy Bitcoin, UK investors can follow these tips to ensure they receive a good deal and stay safe:
- Only buy Bitcoin UK from trustworthy, reputable sources that have a long history of treating customers fairly. There are plenty of scam sites that offer great deals and then simply rip you off, so conduct thorough research into a Bitcoin exchange before registering.
- Compare the rates on offer at the different places that allow you to buy Bitcoin. UK investors have dozens of different sites to choose from, and you can often find a better deal by shopping around. Just make sure you use honest, reputable sites with strong security measures and a decent user experience.
- Put a bit of thought into when you will buy Bitcoin. UK investors ploughed into Bitcoin when it reached an all-time high in late 2017, and then watched as it plummeted in value. The price did not recover until late 2020, so spend some time analysing the cyclical nature of Bitcoin, work out if you are in a bull or a bear market, and try to buy when the price dips (during a market correction) rather than when it has just hit a new all-time high.
- Make sure you store your Bitcoin somewhere safe and remain vigilant against phishing scams and hackers. Do not download anything from unknown sources. Choose a strong password, use a wallet that gives you control of your private keys and make sure you keep your recovery seed phrase somewhere safe. Try not to tell too many people that you are holding Bitcoin and do not post about it on public forums.
Alternative Ways to Invest in Bitcoin UK
People buy Bitcoin for a variety of reasons. Many distrust fiat currencies during an age of intense fiscal stimulus and quantitative easing, and they want to use a decentralized cryptocurrency with a finite supply instead. Bitcoin can be used to buy everything from food and wine to Tesla cars and luxury holidays, so it has plenty of real-world use cases.
Yet many people buy Bitcoin UK in a bid to make a profit. They see it as an asset like gold, and they hope to benefit from its rise in value. If that is the case, you do not necessarily need to buy cryptocurrency in order to profit from it. Sites like eToro, IG and AvaTrade allow you to trade cryptocurrency without having to actually hold it. This is called a CFD (contract for difference), and it allows you to go long or short on certain cryptocurrencies, predicting whether the price will go up or down.
Another option is to look at the stock market. A Bitcoin ETF recently launched in Canada, with the ticker BTCC. You can buy shares in companies like Microstrategy, which is heavily invested in Bitcoin and widely viewed as a de facto Bitcoin ETF, or buy into the Grayscale Bitcoin Trust.
If you do not want to directly buy Bitcoin UK, you can consider mining. In the early days of Bitcoin, rewards were high and competition was low, so individual miners with basic desktop computers were able to rack up large holdings. Nowadays the reward per block mined is a lot lower and competition is intense, so you generally have to buy expensive hardware and join a mining pool or buy hash power from a cloud mining provider, which hosts the hardware for you. There is no guarantee of a profit when mining Bitcoin.
Conclusion – Buying Bitcoin in the UK
There are many different options available to anyone that decides to buy Bitcoin in the UK. The process is similar at all the exchanges – register, verify your account, complete a KYC process, link up a payment method and follow some simple steps to make your purchase – but you can also buy peer-to-peer at decentralised and centralised online marketplaces or trade Bitcoin with leverage, mine it or buy an ETF. Regardless of how you choose to buy Bitcoin, UK investors should always make safety a primary concern. Only use legitimate sites and take the necessary precautions to protect your Bitcoin wallet from hackers.
Buy Bitcoin UK FAQ
💰 What is the best way to buy Bitcoin in the UK?
Most people turn to popular international exchanges like Coinbase, Binance and Kraken to buy Bitcoin in the UK, but there are also UK-based sites including CEX.IO and Coinfloor. You can alternatively visit a marketplace that facilitates peer-to-peer transactions with local Bitcoin holders in the UK, or take part in Bitcoin trading.
⚖️ Is it legal to buy Bitcoin in the UK?
It is perfectly legal to buy Bitcoin in the UK. A Financial Conduct Authority survey suggested that 2,9 million Brits have bought Bitcoin at some point, and it is growing in popularity. Just make sure you stick to safe, reputable sites for buying Bitcoin.
❓ How do beginners buy Bitcoins?
The easiest way to buy Bitcoin is to sign up at a user-friendly site, set up a payment method and follow the instructions. You will need to choose the amount you want to buy and confirm you are happy with the exchange fee. It is advisable to set up a Bitcoin wallet and send your BTC to that address.