How to Invest in Cryptocurrency UK

To buy crypto in the UK, you’ll need to:
1. Sign up with a UK-friendly crypto exchange like eToro or Coinbase.
2. Complete ID verification and fund your account with GBP.
3. Research top cryptocurrencies like Ethereum and Bitcoin.
4. Buy your chosen crypto using the platform’s website or app.
5. Store your crypto in a secure wallet or leave it on the exchange.

Thinking of investing in cryptocurrency in the UK, but don’t know where to start?

I remember when I first bought crypto. It was overwhelming, and I felt out of my depth.

If you’re feeling confused or simply looking for where to invest in cryptocurrency, this guide is for you.

I will walk you through the process step-by-step, ensuring you can safely buy cryptocurrency with confidence.

I’ll cover key aspects like selecting the right exchange, payment methods, and security precautions.

This article was reviewed by Tobi Opeyemi Amure, a cryptocurrency expert and writer at Investopedia, Investing.com, and Trading.biz.

Steps to Investing In Cryptocurrency in the UK

Here’s a quick step-by-step UK crypto investment guide, especially if you’re new to crypto activity or looking to start investing in cryptoassets safely and smartly.

Whether you’re investing large sums or just investing small amounts in crypto, this walkthrough will help you get started safely and confidently. 

Step 1: Register with a Crypto Exchange

☑️ Choosing an exchange: Research to find a reputable cryptocurrency exchange that suits your needs. Look for factors such as security, user interface, transaction fees, and the availability of cryptocurrencies.

☑️ Creating an account: Visit the chosen exchange’s website or mobile app. Click on the registration, sign-up, or join option.

☑️ Verification process: Provide necessary personal information like name, email address, and a secure password. You’ll likely need to verify your identity for security purposes, which could include uploading a government-issued ID.

☑️ Securing your account: Set up two-factor authentication (2FA) for an added layer of security. This usually involves linking a phone number or an authenticator app to your account.

Step 2: Deposit GBP into Your Newly Created Account

☑️ Linking payment method: Link a bank account or a card to your exchange account. Ensure that your bank permits transactions with cryptocurrency platforms.

☑️ Making a deposit: Choose the option to deposit funds and select GBP as the currency. Enter the amount you wish to deposit and confirm the transaction. Be aware of any deposit fees or limits.

☑️ Transaction processing: Wait for the transaction to be processed. Transfer times can vary depending on the chosen method and your bank’s processing speed.

Step 3: Conduct Thorough Research on Various Cryptocurrencies

☑️ Understanding the market: Learn about the cryptocurrency market dynamics, including how different factors like regulations, market news, and technological advancements can affect prices.

☑️ Researching individual cryptocurrencies: Stay informed about cryptocurrency trends in 2025 UK. Study various cryptocurrencies, their purpose, technology, market performance, and potential risks. Utilise resources like whitepapers, forums, and financial news sites.

☑️ Risk assessment: Assess your risk tolerance and investment goals. Cryptocurrency investments can be volatile, so understanding your comfort with risk is crucial.

Step 4: Purchase the Cryptocurrencies of Your Choice

☑️ Exploring the exchange: Navigate the trading interface of your chosen exchange. Understand the different types of orders, such as market orders, limit orders, and stop orders.

☑️ Executing a purchase: Choose the cryptocurrency you want to buy and decide on the amount. Review the current market price and transaction fees.

☑️ Finalising the purchase: Confirm your purchase order. Monitor your account to ensure that the transaction is completed successfully and the cryptocurrency is credited to your account.

Step 5: Set up a Crypto Wallet, for Instance, Coinbase Wallet or eToro Money Wallet

☑️ Choosing a wallet: Decide between a hardware wallet for maximum security or a software wallet for convenience. Consider compatibility with your cryptocurrencies and security features.

☑️ Creating a wallet: Follow the instructions provided by the wallet service to create your wallet. This may involve downloading software or purchasing a physical device.

☑️ Wallet security: Secure your wallet with a strong password, back up your wallet recovery phrase, and enable any additional security features available.

You can see my guide on the best crypto wallets in the UK here to help you with this step.

Step 6: Either Transfer Your Crypto to the Wallet for Storage or Keep It on the Exchange

☑️ Evaluating storage options: Assess the benefits and risks of leaving cryptocurrencies on the exchange (easier access for trading, potential risk from hacking) versus transferring them to a private wallet (enhanced security, less flexibility for quick trades).

☑️ Transferring to a wallet: If you choose to use a wallet, generate a receive address from your wallet, and use this to transfer the crypto from your exchange account to your wallet.

☑️ Regular monitoring: Regardless of your choice, regularly monitor your investments and stay updated on market conditions and security practices.

If you plan on using or trading your crypto soon, and it’s a small amount, you might be fine leaving it on the exchange.

However, I recommend moving it into a more secure hardware wallet.

Where to Invest in Crypto in the UK?

In the UK, you can buy cryptocurrency through platforms such as eToro, Bitpanda, and Uphold.

These services offer a variety of digital assets and provide secure, user-friendly environments for buying, selling, and trading cryptoassets.

Each platform has its own set of features and fees, catering to different levels of cryptoasset investors and traders.

Below, I’ve put together my top picks of platforms for buying crypto in the UK.

Key Things to Know Before Investing in Cryptocurrency

Before diving into the world of crypto, it’s essential to understand the basics and assess the risks involved.

This section of our UK cryptocurrency investment 2025 guide covers the key things you need to know, especially if you’re new to the market.

What Is Cryptocurrency?

Before diving into what exactly crypto is, here are some interesting statistics that highlight its growth.

• As of 2023, nearly 4.97 million people in the UK hold some form of crypto asset, which is nearly 10% of the population¹.
• The revenue in the cryptocurrency market in the UK is projected to reach US$1.89bn in 2023, with an annual growth rate of 18.84%².
• Almost 500 businesses in the UK accept cryptocurrency as a payment method.

As you can see, crypto is gaining traction in the UK and reshaping the financial scene daily³, so what exactly is it?

Cryptocurrency is a digital or virtual form of currency that operates on distributed ledger technology (DLT), known as a blockchain, and utilises cryptography to secure financial transactions, control the creation of new units, and verify the transfer of assets.

Unlike traditional fiat currencies issued by governments, cryptocurrencies operate on decentralised networks, typically based on blockchain technology.

They use a distributed ledger called a blockchain, which is a transparent and immutable record of all transactions across the network.

This decentralised nature eliminates the need for intermediaries, such as banks, and allows for peer-to-peer transactions.

They are not controlled or regulated by any central authority, such as a government or financial institution. Instead, transactions and the issuance of new units are governed by consensus mechanisms and cryptographic algorithms.

Bitcoin, created by an anonymous person or group known as Satoshi Nakamoto, was the first cryptocurrency and remains the most well-known and valuable.

However, since the introduction of Bitcoin, thousands of other cryptocurrencies, commonly referred to as altcoins, have emerged, each with its own features and purposes.

Cryptocurrencies offer various potential advantages, including increased privacy, reduced transaction fees, faster cross-border transactions, and the potential for financial inclusion in underserved populations.

However, they also come with risks, such as price volatility, regulatory uncertainties, and the potential for fraud or hacking.

Overall, cryptocurrency represents a digital form of money that leverages cryptographic principles and decentralised networks to enable secure, transparent, and efficient financial transactions in the digital age.

Is It Legal to Invest in Crypto in the UK?

Yes, it is legal to buy cryptocurrency in the UK.

Cryptocurrency transactions, including buying and selling cryptocurrencies, are generally considered legal activities in the UK.

The UK government has not imposed any specific bans on owning or trading cryptocurrencies.

However, it’s important to note that the regulatory landscape for cryptocurrencies in the UK is still evolving.

Cryptocurrency-related activities are subject to regulatory oversight, and certain obligations may apply to individuals and businesses operating in the cryptocurrency space.

The UK’s regulatory authority responsible for overseeing cryptocurrency activities is the Financial Conduct Authority (FCA).

The FCA has provided guidelines and regulations for cryptocurrency businesses to ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) requirements.

Cryptocurrency exchanges and other service providers are required to register with the FCA and adhere to these regulations.

While crypto itself is not covered by the Financial Services Compensation Scheme, exchanges registered with the FCA must follow strict operating standards.

Are cryptocurrencies Taxable in the UK?

Yes, cryptocurrencies are taxable in the UK. HMRC (His Majesty’s Revenue and Customs) treats crypto as a property (asset), not as currency. This means tax applies based on what you do with your crypto.

There are two main types of tax that may apply: capital gains tax and income tax.

Capital Gains Tax (CGT)

You pay Capital Gains Tax when you dispose of crypto assets and make a profit.

“Disposal” includes:

• Selling crypto for GBP or another currency
• Trading one cryptocurrency for another (e.g., BTC → ETH)
• Using crypto to buy goods or services
• Gifting crypto (unless to your spouse/civil partner)

You pay CGT if your total gains in a tax year exceed the Capital Gains Tax Allowance of £3,000 (for tax years 2024/25 and 2025/26). Note that this was previously higher (£12,300 in 2022/23).

The capital gain tax rate is:

• 18% for basic-rate taxpayers
• 24% for higher- and additional-rate taxpayers

Income Tax

Crypto is taxed as income when you:

• Mine or stake crypto
• Receive airdrops
• Get paid in crypto (e.g. salary or freelance)

Income tax applies when the crypto is received (not when it’s later sold), and the amount is valued in GBP at that time.

For example, you do freelance work and are paid 0.01 BTC, which is worth £500 on that day. That £500 counts as taxable income, added to your other income.

However, crypto-related income is tax-free up to £12,570, and then taxed at 20%, 40%, or 45% depending on your income bracket. You may also need to pay National Insurance.

What to Consider Before Investing in Cryptocurrency

The decision to invest in cryptocurrency depends on various factors, including your risk tolerance, investment goals, and understanding of the cryptocurrency market.

Here are some key points to consider when evaluating cryptocurrency as an investment:

1. Volatility: Cryptocurrencies, such as Bitcoin and Ethereum, are known for their high price volatility. Prices can rise or fall dramatically within hours, leading to potential gains but also substantial losses. It’s essential to be prepared for the inherent volatility of the market.
2. Potential Returns: Cryptocurrencies have delivered substantial returns for some investors in the past. However, past performance is not indicative of future results. While there have been notable success stories, it’s crucial to approach cryptocurrency investments with realistic expectations and avoid excessive speculation.
3. Diversification: Cryptocurrency can be considered as a part of a diversified investment portfolio. Diversification helps spread risk by investing in a range of assets across different sectors and markets. Including cryptocurrencies, alongside traditional investments like stocks and bonds, may provide potential diversification benefits.
4. Regulatory Environment: The regulatory landscape surrounding cryptocurrencies is still evolving. Regulatory changes or government actions can significantly impact the cryptocurrency market and investor sentiment. Staying informed about regulatory developments is crucial when considering cryptocurrency investments.
5. Risk Factors: Cryptocurrencies face various risks, including hacking incidents, security breaches, regulatory uncertainties, and market manipulation. It’s important to understand these risks and take appropriate measures to secure your investments, such as using secure wallets and practising good cybersecurity habits.
6. Research and Education: Before investing in cryptocurrencies, it’s advisable to conduct thorough research and educate yourself about the technology, underlying projects, and market dynamics. Understanding the fundamentals and evaluating the long-term viability of specific cryptocurrencies can help make more informed investment decisions.
7. Time Horizon: Consider your investment time horizon. Cryptocurrency markets can experience short-term volatility, but their long-term potential is still debated. If you’re investing with a longer-term perspective, you may be more resilient to short-term price fluctuations.

Investing in cryptocurrency involves risks and rewards. It’s important to approach it with caution, conduct thorough research, and only invest what you can afford to lose.

What Are the Risks of Cryptocurrency Investing?

Cryptocurrency investing carries several risks that potential investors should be aware of. Understanding these risks is crucial for making informed investment decisions.

Here are some key risks associated with cryptocurrency investing:

• Price Volatility: Cryptocurrencies are known for their price volatility. Prices can experience significant fluctuations within short periods, leading to potential gains or losses. Sudden market movements can be influenced by various factors, including market sentiment, regulatory announcements, technological advancements, or macroeconomic events.
• Regulatory and Legal Risks: The regulatory environment for cryptocurrencies is still evolving and varies across jurisdictions. Changes in regulations or government actions can impact the legality, usage, and value of cryptocurrencies. Regulatory interventions, such as bans, restrictions, or increased scrutiny, can affect market sentiment and liquidity.
• Security Risks: Cryptocurrencies face security risks due to hacking incidents, scams, and vulnerabilities in exchanges or wallets. Cyberattacks targeting exchanges or individuals can result in the loss of funds. It’s important to employ robust security measures, such as using reputable exchanges, implementing strong passwords, enabling two-factor authentication, and using hardware wallets to store cryptocurrencies securely.
• Market Manipulation: The cryptocurrency market is relatively young and less regulated compared to traditional financial markets. This lack of regulation can make it susceptible to market manipulation, such as pump-and-dump schemes or price manipulation by influential actors. Manipulative practices can distort prices and mislead investors.
• Operational Risks: Cryptocurrency platforms may face operational risks, including technical issues, system failures, or security breaches. These incidents can lead to disruptions in trading, delayed transactions, or loss of funds. It’s important to choose reputable and well-established platforms with a strong track record in security and reliability.
• Lack of Fundamental Value: The value of cryptocurrencies is primarily driven by market demand and speculation. Unlike traditional assets such as stocks or bonds, cryptocurrencies may lack intrinsic value based on cash flows or underlying assets. Price movements can be influenced by market sentiment, media coverage, or hype, which can lead to speculative bubbles or rapid price declines.
• Liquidity Risk: Cryptocurrency markets can be relatively illiquid compared to traditional financial markets. Some cryptocurrencies may have lower trading volumes, which can impact price stability and the ability to buy or sell assets at desired prices. Low liquidity can also make it challenging to exit positions during times of market stress.

Diversification, risk management strategies, and consulting with financial professionals can help mitigate some of these risks and increase the likelihood of making informed investment decisions.

Tips for Investing in Cryptocurrency Safely in the UK

• Choose a Reputable Cryptocurrency Exchange: Select a well-established and regulated cryptocurrency exchange operating in the UK. Look for exchanges with a strong track record, positive user reviews, and regulatory compliance.
• Prioritise Security Features: Opt for exchanges that offer robust security measures, such as two-factor authentication (2FA) and cold storage for funds. 2FA adds an extra layer of protection to your account, while cold storage keeps your cryptocurrencies offline and secure from potential hacks.
• Research the Exchange’s Reputation: Before registering with an exchange, research its reputation and history. Check for any security incidents, hacks, or negative reviews that could raise concerns about the exchange’s reliability and security practices.
• Use a Separate Cryptocurrency Wallet: Consider using a separate wallet, such as a hardware wallet, to store your purchased cryptocurrencies. Hardware wallets provide offline storage and greater security for your private keys, reducing the risk of online threats.
• Verify the Exchange’s Regulatory Compliance: Ensure the exchange is regulated by reputable financial authorities in the UK, such as the Financial Conduct Authority (FCA). Regulatory oversight adds an extra layer of protection for consumers and helps ensure compliance with relevant regulations.
• Practice Due Diligence: Conduct your own research on the cryptocurrencies you intend to buy. Be very thorough. Assess their underlying technology, use cases, development team, and potential risks. Understanding the fundamentals of a cryptocurrency can help you make informed investment decisions.
• Keep Software and Devices Secure: Maintain up-to-date antivirus software, firewalls, and operating systems on the devices you use for cryptocurrency transactions. Regularly update your passwords and be cautious of phishing attempts and suspicious links or attachments.
• Start with Small Investments: Consider starting with smaller investment amounts until you become more familiar with the cryptocurrency market. This approach allows you to gain experience and understand the potential risks before committing larger sums of money.
• Stay Informed: Keep yourself updated with the latest news, trends, and regulatory developments in the cryptocurrency space (from the central bank, HM Treasury, and other relevant sources). Stay vigilant and be aware of potential risks associated with the market, such as scams, fraudulent schemes, or market manipulation.
• Consider Professional Advice: If you’re new to cryptocurrency investing or uncertain about the process, consider seeking advice from a financial advisor or consulting with professionals specialising in cryptocurrency investments. Their expertise can provide valuable insights tailored to your circumstances.

Final Thoughts

Investing in cryptocurrency in the UK can offer exciting opportunities, but it requires careful consideration.

By following the steps outlined in this article, such as choosing reputable UK crypto trading platforms, prioritising security, conducting thorough research, and staying informed, you can approach cryptocurrency investing with greater confidence.

Remember to assess your risk tolerance, start with small investments, and seek professional advice when needed.

FAQs

You may also like:

• Best crypto wallet UK
• How to invest in Bitcoin UK
• Best cryptocurrency apps UK

Sources:

1. https://www.fca.org.uk/publication/research-notes/research-note-cryptoasset-consumer-research-2023-wave4.pdf ↩︎
2. https://www.statista.com/outlook/fmo/digital-assets/cryptocurrencies/worldwide?currency=USD ↩︎
3. https://www.cam.ac.uk/research/news/study-highlights-growing-significance-of-cryptocurrencies ↩︎