Buy Cryptocurrency UK – How To Buy Cryptocurrency for Beginners in 2021
Cryptocurrencies, while initially coming out as a niche technology, have over time become one of the largest markets in the world.
In fact, Bitcoin is the fastest asset to ever reach a $1 trillion market cap.
There are over 10,000 cryptocurrencies, and if you do not want to be sidelined, and want to engage with cryptocurrency trading, check out this cryptocurrency UK guide where you will learn everything you need to know about buying, selling, or trading cryptocurrencies.
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How to Buy Cryptocurrency UK – Quickest Method in 2021
Let’s face it, not everyone has the time to read through the full comprehensive guide, however, if you want a quick summary of just how to get in there, make a purchase, and carry on with your day, here’s what you need to do.
1. Open an account: First, open an account with a cryptocurrency exchange or brokerage, here we’d recommend using eToro as it is the quickest.
2. Provide ID: Second, you’ll need to provide some ID, and this will involve you having to upload a copy of your passport, or driver’s license in order to verify your identity. This is part of the KYC (Know Your Customer) process that many exchanges and brokerages will have as a requirement.
3. Make a deposit: Third, make your deposit. If you do not already own any cryptocurrencies, you’ll need to use a UK credit or debit card, or you can even use an e-wallet when picking eToro.
4. Buy cryptocurrency: Last but not least, you buy the cryptocurrency itself.
All-in-all, this process should take you just a few minutes, and you should see your cryptocurrency within your eToro wallet.
How to Buy Cryptocurrency UK – Top Brokers Revealed
There are plenty of exchanges and brokerages out there that you can use in order to purchase cryptocurrencies throughout the entirety of the UK, and it is in your best favor to find the perfect option for your specific requirements and expectations. You can compare the best crypto exchanges as well as brokers alongside their features, fees, and payment methods throughout the entirety of this guide.
There are currently over 380 cryptocurrency exchanges, exchanging over $84 billion worth of cryptocurrencies within a 24-hour interval. BTC leads the pact with a dominance of 41% with ETH following second with a dominance of 19%.
This being the case, a lot more people in the UK, especially investors who might have only been attached to traditional assets such as stocks or bonds, are starting to show interest in cryptocurrencies.
How to Buy Cryptocurrency UK – eToro Tutorial
If you want to learn how to buy cryptocurrency, eToro might just be what you are looking for. Through eToro, you will have the simplest time when it comes to buying cryptocurrencies within the UK. This broker has been selected due to its low fees, a wide range of supported cryptocurrencies as well as a high level of security. This process, however, is quite similar to many other brokers and exchanges, so you should be able to follow along nicely no matter what you end up picking.
Step 1: Opening up a Brokerage Account
One of the very first things you’ll need to do is open up an account, as this is what will be used to facilitate all of your purchases and trades on the platform. To do this, just visit the official website of eToro, select the option to open an account, and follow the on-screen indicators as to what you need to do. Keep in mind that throughout this step, you will be asked different questions in regard to your personal information, contact details, as well as if you have had any trading experience throughout your history. This is a simple and straightforward process, but ensures that all of the information here is fully legitimate, as it will have to be verified at a later point in time.
Step 2: Downloading the eToro application
You can use the web version if you want to, but given the fact that the cryptocurrency market has a reputation for being volatile, which briefly explained means that the prices can shift rapidly at any point in time, even within seconds, you want to have access to all of the information about the cryptocurrencies you have purchased at all times. This is why it might be a smart idea, and in your best favor to download the eToro application, which will send real-time pricing updates to your mobile device and allow you to buy and sell cryptocurrencies quickly.
Step 3: Make your deposit
Deposits in the United Kingdom have a minimum requirement of $200. The only exception to this is if you are funding your account through Wire Transfer, where the minimum is $500. Redeposits have to be at least $50, and when you fund your account using GBP, eToro will actually charge you an additional fee to convert your deposit into USD. Keep in mind that your account can be instantly funded through a credit card, debit card, or an e-wallet such as Skrill or PayPal.
Step 4: Buying the cryptocurrency
Once you have created an account and deposited some money, you’ll need to head over to the Markets page, where you can select crypto to access the full list of crypto assets that are available on eToro.
Next, you will need to select the cryptocurrency asset that you want to buy and select the Trade option.
After that, you will need to follow up this with the Buy selection, and ensure that leverage is set to X1.
Here, you will need to enter the amount or number of units that you want to trade, set the take profit parameter if you want to, and select open trade. That’s all there is to buying cryptocurrencies on eToro.
Best Platforms to Buy Cryptocurrency in the UK
eToro has been around since 2007 and has had over 17 million users from across 100 countries. It is an excellent choice for anyone who wants to buy and sell the most popular cryptocurrencies quickly and easily and is intended specifically for newcomers due to its streamlined user interface and design.
The fees are competitive when you compare them against other platforms, and it is an excellent way to access a community that will share a lot of knowledge with you. Best of all, it gives you access to 23 cryptocurrencies, which serve you a lot of variety.
It takes just a few minutes to get started with eToro, and once you enter some personal information you can begin trading instantly.
|You can buy cryptocurrency commission-free||You will have to convert GBP to USD which has additional fees.|
|There are more than 17 million users on it||You won’t find many altcoins here.|
|Accepts credit cards, debit cards, e-wallets, and bank transfers.|
|Supports copy trading|
|Fully regulated by multiple regulatory bodies|
|Gives you access to 23 cryptocurrencies.|
Coinbase is quite possibly one of the world’s most popular cryptocurrency exchanges. It was founded in 2012 and is fully regulated and licensed. When it started out, it mainly focused on buying Bitcoin in the UK, but over time evolved and started to support a lot more cryptocurrencies and now has over 56 million users.
It has an additional service known as Coinbase Pro that offers you an intuitive interface with real-time order books and charting tools. The account setup is straightforward, and you can browse and view more than thousands of assets. Keep in mind that not all of them are tradable though.
|Gives you access to many altcoins aside from the main ones||High fees when you aren’t using Coinbase pro.|
|It has a simplistic user interface that newbies can understand.||Does not control wallet keys.|
|You have a high level of liquidity.|
|Has more than 56 million users.|
|Excellent mobile application.|
Binance has a reputation for being a leader when it comes to cryptocurrency support and was founded in 2017 in China. Now, it has moved to Malta and operates in the U.S. and Singapore as well. Furthermore, Binance.US also launched in September of 2019 specifically for that targeted user-base. It is an ecosystem and offers a decentralized blockchain-based network.
You can trade over 300 cryptocurrencies on Binance, and it has its own software wallet known as the Trust Wallet.
Discussing the sign-up process, it’s also fairly simple, and Binance charges only 0.1% sports trading fee on most pairs.
|Over 300 cryptocurrencies to trade from.||Has a steep learning curve.|
|Only 0.1% trading commission.||Has a fee when it comes to FIAT card deposits of 2%.|
|Supports a wide range of UK credit and debit cards alongside bank transfers.|
|Has an amazing community and reputation.|
|Constantly supports new projects through the Launchpad and Launchpool.|
CEX.io is a cryptocurrency exchange platform that accepts multiple deposit types and supports different cryptocurrencies. It is intended for both newcomers to the world of cryptocurrencies as well as advanced users. It is licensed by the Financial Crimes Enforcement Network (FinCEN) which means that it is legitimate. It was originally founded in London, UK in 2013, and was a cloud mining provider that owned the GHash.io mining pool, which in 2014 was one of the largest.
|Excellent Support.||Not too many supported cryptocurrencies.|
|Offers several different trading pairs and multiple FIAT currencies.||Fees are on the higher end of the spectrum.|
|It’s easy to use and navigate through.|
|There are Margin trade options available.|
|It is fully registered and secured.|
EXMO is yet another UK-based cryptocurrency exchange that has a high reputation among avid traders. The platform was released in 2014 and is one of the largest global crypto markets regarding volume as well as liquidity. Aside from being registered in London, the company actually has branches in both Moscow and Kyiv. It has a team of over 150 people who are bringing cryptocurrency trading to the next level through convenience. It has features such as an OTC desk, voting, VIP service, an API, Cashback, and a Referral program.
|Native support for trading BTC for EUR as well as GBP.||Lacks sufficient liquidity across certain trading pairs.|
|Supports over 180 currency pairs.||Support might not be the best.|
|Has over 20,000 active traders.|
|Offers up to 70% of trading fees through its cashback program.|
Coinmama was actually established in Israel in 2013 and has expanded to over 188 countries and has 2 million users on a worldwide scale. It is known for offering many payment options, has high spending limits, has a quick verification process, instant delivery, and has excellent support.
When it comes to cryptocurrencies that are supported, it supports Bitcoin, Bitcoin Cash, Ethereum, Dogecoin, Ethereum Classic, Cardano, Litecoin, Ripple, and Tezos. In terms of FIAT currencies, it supports USD, EUR, AUD, CAD, JPY, and most importantly in the case of UK visitors, GBP. It has high fees, however, it’s one of the quickest options out there and is available on a worldwide scale.
|Quick verification process.||5% fee for card purchases.|
|Live chat support availability.||Limited cryptocurrency support.|
|Strict security standards.||No on-exchange wallet available|
|Once you get to level 3 user verification, you can buy £100,000 worth of cryptocurrencies at a time.|
Cryptocurrency Explained: An In-depth look
Cryptocurrencies allow you to make payments that can be exchanged online for goods or services. There are plenty of companies out there that have issued their own currencies, known as tokens, and these can be traded specifically for the services that that company provides. Some of them actually power their blockchain, but we’re getting ahead of ourselves.
Let’s look at Bitcoin so you can have the best perspective of how all of this works in the world’s largest cryptocurrencies. Bitcoins, or BTC, are not physical coins, they are all digital currencies.
It allows you to send, receive and transfer funds on what is known as the blockchain. The blockchain is a set of blocks, all of which have data that is generated onto them.
To generate this data, miners are required, and this is known as the proof-of-work (PoW) consensus algorithm. Miners essentially need to validate complex cryptographic puzzles each time a transaction is made, and for that, they are rewarded BTC.
Now that you have a general idea of how they work, you need to understand that cryptocurrencies have certain characteristics which set them apart from traditional currencies, such as the GBP you’re used to using or even EUR or USD.
One of the main advantages of cryptocurrency and the reasons why so many people out there adore using them is the fact that they are not owned or controlled by a central bank nor even a government, like FIAT currencies would be. They are fully decentralized. These cryptocurrencies are also backed by blockchain technology, which allows every transaction to be secure and anonymous.
Whenever you make a cryptocurrency transfer, this transaction, with certain cryptocurrencies, is publicly viable on the blockchains and makes the network 100% transparent. Keep in mind that some cryptocurrencies go the extra distance to provide a higher level of anonymity.
Aside from that, cryptocurrencies have no borders, which means that transferring coins from one side of the world to another will cost the same as transferring a cryptocurrency to your neighbor. Furthermore, the blockchain never sleeps, as miners are constantly crunching to keep that blockchain running, so unlike traditional financial institutions such as banks, you can transfer crypto 24/7, 365.
While we discussed Bitcoin, which has the highest level of dominance on the market in terms of popularity and market cap, there are currently over 10,000 cryptocurrencies that exist out there, and with a total of $84 billion circulating within the last 24 hours across all of them, Bitcoin dominates with 41%.
Furthermore, another important aspect of cryptocurrencies is what you can actually do with them. You see, each project serves its own purpose, typically within the sphere of its own blockchain. Bitcoin has created a payment network, and there are other currencies that have created their own innovation to the market. Most notably, Ripple offers cross-border banking transactions, and Chainlink provides real-world data to blockchains.
The main reason why the interest in these cryptocurrency assets has spiked so much is due to the fact that many investors believe that over time, it is an inevitability that cryptocurrencies will truly revolutionize the way we use the internet for transacting value, and will serve us in the future about anything money-related. As such, the concept here is that their value will increase throughout time, due to their increased adoption rate. If you think about it, this is quite similar to traditional asset classes as well, and the fundamentals of investing in cryptocurrencies are not that complex.
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Cryptocurrency Prices and Making Money
The main incentive a lot of people in the UK have when it comes to the process of purchasing cryptocurrencies is the fact that they want financial gains, and as such, there is a huge market that needs to fulfill this market demand. As such, many cryptocurrencies are listed in a multitude of cryptocurrency exchanges available for people in the UK, which allows them to buy, sell or trade a cryptocurrency they choose or deem to be a worthwhile investment.
This works quite similarly when you compare it to purchasing traditional shares that are listed on stock exchanges. The value of your cryptocurrency can go up or down with each passing second, due to the high volatility of the market. There are centralized, decentralized, and hybrid exchanges, however, one thing holds true across all of them and this is the fact that they operate 24/7, 365.
When you want to analyze the prices, and how they rise or fall within the cryptocurrency industry, things can get interesting, to say the least.
There is always the truth that they are based on conventional demand and supply, however, they can be influenced by real-world events, social media acceptance, and journalism headlines. However, when there are a lot more people buying the currency than the ones selling it, the price will go up due to the increased demand.
Just don’t be surprised if it falls whenever a newer, better solution comes up to the one currently available, or when the world attempts to fight the increased fossil fuel generation caused by them. However, when we look at the value of cryptocurrencies as a whole, they are much higher in value than they were a year, or even two years ago, meaning that the overall value of almost every cryptocurrency out there has grown, and this is the main reason why they are so popular today.
Back on topic, whenever the price rises in your specific choice of cryptocurrency, or cryptocurrencies, remember, you are never limited to just one, you make a profit as a result and hopefully end up selling your cryptocurrency at a higher price than you paid for it, assuming financial gain is your main goal.
One thing you need to keep in mind is that, while you can set a custom parameter to showcase the value of cryptocurrencies in GBP on just about any cryptocurrency exchange out there, the USD is known as the native currency used to value cryptocurrencies in the marketplace. If you open any article out there, the chances are high that the value will be measured in USD, and you will have to open up a calculator and convert it to GBP, or just open up a cryptocurrency exchange and see it there.
For example, at the time of writing, BTC has a value of £25,362, but you’ll see it, by default as $35,910.
This means that, as a UK investor, you shouldn’t really be concerned about it. You have the filters that convert this value for you automatically, and you have the ability to deposit GBP on just about any cryptocurrency exchange out there.
Specifically, the exchanges that specifically support UK investors will allow you to deposit British pounds using a credit or debit card, bank account, or e-wallet, after which the broker or exchange will end up performing a currency conversion into USD for you. In most cases, this does, unfortunately, have a conversion fee, but it’s nothing too high, just something you need to keep in mind going forward.
Why Start Buying Cryptocurrency in the UK?
What you need to have at the back of your head throughout each and every time you decide to purchase a cryptocurrency is the fact that they are speculative, high-risk, and do not offer anything when it comes to regular income.
There are multiple reasons why people in the UK love buying cryptocurrencies, and these are the reasons why they have gotten so popular and in such high demand.
Cryptocurrencies Outperform Other Assets
This is by far one of the obvious reasons as to why they have gained such a high level of popularity, but you probably know this already. The growth of cryptocurrencies throughout the past few years has been exceptional, with extreme financial games on Bitcoin and Ethereum for example.
Let’s put this into perspective:
Today, BTC is valued at $35,910. In January of 2020, its value was around $8,105. In January of 2019, its value was around $3,840. You’re getting the picture at this point.
ETH on the other hand is valued at $2,674 today, while in January of 2020 it held a value of just $136, and in January of 2019, it held a value of $153.
We cannot really know just how far, and how big the cryptocurrency industry can get overtime, especially when we look at some of the biggest cryptocurrency projects out there today. When you consider their global appeal, and ability to solve some of the biggest financial issues we are facing with traditional finance, the chances are high that inevitably they will have a mainstream implementation that will bring their value above and beyond anyone’s speculation.
Traditional Investments Aren’t at Their Best
Speaking of traditional financial issues, when you leave your money within a UK bank account, you might get, at best, 1% in interest per year. Alongside that, the majority of stocks listed on the London Stock Exchange haven’t really recovered after their losses throughout the year. With traditional investments failing at such a large level, people in the UK are seeking alternative forms of investments, and cryptocurrencies, especially with their large gains and exciting innovations, seem to be the go-to investment option.
They Bring new and Exciting Technology
You can do a quick Google search about each and every cryptocurrency out there, and the chances are high that each of them will bring something new, different and innovative to the market, either solving an issue on-chain or solving an issue in the real world. Then there are also some currencies that are just made for fun. When you look at the history of Bitcoin, for example, the anonymous founders wanted to challenge the global monetary system by taking control away from traditional banks or financial instruments and putting it back into the hands of the users.
Many cryptocurrencies are decentralized, and there is no single owner of the network. They are highly conducive for cross-border transactions as well, which is extremely useful in the case of transferring money to the third-world, where there are more than 2 billion people that do not have access to banking facilities. What this means is that, through the usage of cryptocurrency to transfer value, the fees can be extremely low and the transfer can take a few minutes, instead of days.
What this means is that each and every time an investor in the UK decides to invest in a cryptocurrency of any kind, what they are essentially doing is investing in a new, innovative and disruptive technology.
They Have a Low Barrier When It Comes to Entry
When we look at traditional investments, if you are a newcomer to the world of investing, and happen to be from the UK, you are quite limited when it comes to the kind of assets you can access. Stocks and ETFs are easy to buy, however, bonds, government securities, and emerging market equities are a different story altogether when it comes to their accessibility.
However, when we look at the cryptocurrency market, you can easily buy any cryptocurrency within the UK that is supported by the brokerage or exchange you end up choosing. All you really need is, for example, to make an eToro account, and after you’ve made a deposit, you can decide how much you want to invest in any of the supported cryptocurrencies.
Diversification as An Option
You might have noticed that there is a huge interest specifically within the Bitcoin cryptocurrency. This is due to the fact that it has gotten the most mainstream media attention, and held its value and reputation as the champion of cryptocurrencies due to its dominant market share.
In any case, it is worth noting that you can diversify your investments, and given the fact that there are over 10,000 cryptocurrencies out there, you can spread out the risk through the process of purchasing multiple coins and seeing where they lead you.
Ideally, your main focus should be on major cryptocurrencies. Think of this as a suggestion, not as hard advice, however, you might want to allocate 60% of your cryptocurrency portfolio to some of the largest cryptocurrencies out there that you can predict will go up in value, such as BTC or ETH, and spread out the other % to various cryptocurrency projects you have a genuine interest in, want to back yourself, or engage in other cryptocurrency methods of generating a profit such as yield farming.
Cryptocurrencies are a Liquid Asset
Cryptocurrencies have high liquidity. This means that you can easily convert your coins back into GBP at any time. This is due to the fact that cryptocurrencies are actually traded 24/7, 365 across public exchanges. All you really need to do is exit your position by converting your cryptocurrency back into pound sterling, and then withdraw the money into your debit or credit card, or even to your bank account completely. This freedom means that your money will never end up being locked up whenever you have a requirement for your money.
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What Cryptocurrencies Can You Actually Buy in the UK?
There are literally over 10,000 cryptocurrencies that exist out there. Many of these, however, are ERC-20 tokens, which means that they are built on the Ethereum blockchain. This being the case, few UK brokers will actually end up offering ERC-20 tokens, as their demand is quite low when compared to separate ones. As such, you will need to use a cryptocurrency exchange in order to be able to purchase many of them.
Many conventional cryptocurrency exchanges are unlicensed and do not have the legal permit to support FIAT deposits such as credit or debit cards, bank transfers, or e-wallets. So you will need to buy a popular cryptocurrency, transfer it to the exchange, and only then be able to buy ERC-20 tones using your previously bought cryptocurrency. This being the case, you want to focus on purchasing cryptocurrencies initially that are listed in the top 20 in terms of market capitalization, due to the fact that these will probably be available across many if not all UK brokers.
Currently, the top 20 cryptocurrencies according to market cap include:
- Binance Coin
- USD Coin
- Internet Computer
- Bitcoin Cash
- Binance USD
- IOTA UK
- YFI UK
- Shiba Inu Coin
Bitcoin, Ethereum Binance Coin, Cardano, Dogecoin, Ripple, Uniswap, Bitcoin Cash, Chainlink, and Litecoin are all currently supported on eToro for purchase.
How to Invest in Cryptocurrency UK
There are multiple ways through which you can invest in cryptocurrencies. You can attempt short-term trading, where you can purchase a specific cryptocurrency after it has dipped in value and sell it the moment it gains short-term growth, or you can hold onto your cryptocurrency for years, if not decades until it reaches its all-time high before selling it.
The process when it comes to buying cryptocurrencies for investment is exactly the same as it would be for trading, but in this case, instead of selling your cryptocurrency after a short period of time, you simply leave it in your cryptocurrency wallet.
In order to invest in cryptocurrency within the UK, you will need a cryptocurrency wallet. This can be in the form of a digital or physical wallet, that can store your cryptocurrencies. The thing to note here is the fact that you aren’t actually storing your currency within the wallet, just the public and the private keys that allow you to access your cryptocurrency that is kept in the blockchain.
How to Buy and Sell Cryptocurrency UK Safely
Just as with any investment, you want to maintain the highest possible level of security. Luckily for you, many brokerages, as well as exchanges out there, do go the extra distance to ensure that you have a high level of security for your cryptocurrencies, however, there are still a few things you need to look out for.
Use a Regulated Cryptocurrency Broker
Always ensure that the cryptocurrency broker you will end up buying cryptocurrencies from is regulated as if you do not choose one that is, you are essentially putting yourself at risk. You will, at one point, be required to deposit your money into the platform, and you should always buy cryptocurrency from a regulated provider to maintain a high level of security.
eToro for example is regulated by three tier-one licensing bodies.
- The United Kingdom Financial Conduct Authority
- Australian Securities and Investments Commission
- Cyprus Securities and Exchange Commission
It is also regulated by the Financial Industry Regulatory Authority in the US.
Dollar-Cost Average to Avoid Volatility
Cryptocurrencies are by far currently one of the most volatile currencies you can invest in. This means that the value of the cryptocurrency you end up purchasing can go up and down in just a few seconds. This will put off newcomers, especially if they are not used to a high level of volatility.
You could consider the dollar-cost average strategy when you initially get into the world of cryptocurrencies, however. This means that instead of putting a lot of money into cryptocurrency, you can invest in it regularly, though smaller amounts of money.
Let’s say you invest $50 per week, and every time you make a purchase, you get a different cost-price. Over a span of a month, for example, this price will average out, and ensure that volatility will have a limited effect on you throughout the long term.
Get a Hardware Wallet
There are two kinds of wallets, the first is a hot wallet, and the second is a cold wallet. Hot wallets are the wallets you get within the cryptocurrency exchange. This wallet is connected to the internet, and it could be susceptible to hacks or exploits, even though this is a rare occurrence. On the other end of the spectrum, you have cold wallets, which is the hardware or paper wallet. The main reason why you would want to get a hardware wallet is so that you can secure your cryptocurrency as much as possible, as, without a connection to the internet, it is practically impossible for a hacker to steal your cryptocurrencies.
Cryptocurrency Wallets Detailed
As previously mentioned, you are not storing your coins within your wallet, just the public key as well as the private key that allows you to access your cryptocurrency on the blockchain.
You have software wallets, such as web wallets, application wallets, and downloadable wallets, as well as hardware wallets such as hardware wallets and paper wallets.
The best wallets include:
Now, given the fact that you will already have a web wallet the moment you sign up for the cryptocurrency exchange, we’ll be covering the ones you can get separately.
- Trezor Wallet
- Ledger Wallet
- Exodus Wallet
- Electrum Wallet
- Mycelium Wallet
- Dash Wallet
Keeping Your Cryptocurrency Wallet Credentials Secure
This fact is valid throughout each and every kind of wallet out there. Your cryptocurrency wallet will come with two pieces of data, that only you should know.
- The private key
- The passphrase
The private key is what will stand in the way between you and your wallet being accessed by a third party, so you should keep it safe at all costs.
The passphrase is used as a backup, in the event that you might lose or for whatever reason, end up forgetting your private key. Ideally, you want to keep both of them in different locations.
What Payment Methods Can You Use to Buy Cryptocurrency UK?
If we take a look back at cryptocurrency exchange history, we can notice a pattern where, not long ago, many cryptocurrency exchanges didn’t even accept FIAT currency deposits. You had to have crypto, to trade it for another crypto. However, this is now history. A number of exchanges actually appear that allow you to deposit funds through the bank transfer method. However, initially, the deposit process could take up to one month to process.
Now, today, the cryptocurrency world has actually opened up to regulated brokerage sites, and they have the legal remit to accept a full range of popular payment methods. eToro actually allows you to buy cryptocurrencies within the UK with the following methods:
- Credit/Debit Cards
- UK Bank Transfer
The best thing about all of this is the fact that each of these, except for the UK bank transfer method, is instantly processed, and as soon as you confirm the deposit you have the opportunity to purchase cryptocurrency in the UK.
What Are the Risks When You Buy and Sell Cryptocurrency in the UK?
So far, we have mostly discussed the benefits when it comes to cryptocurrency purchases and trading, however, it’s time we discussed some of the risks involved with it.
Loss of Money
You can lose money on just about any investment out there, but when it comes to cryptocurrencies, this risk is significantly higher due to their volatile nature. There are plenty of cryptocurrencies that saw an astronomical rise in value in 2017, which dropped throughout the following year.
Cryptocurrencies are regulated in a grey area on a global level due to the fact that in most jurisdictions there is no cryptocurrency-specific legislation.
Brokers in the UK are required to verify all UK cryptocurrency buyers, which is linked to anti-money laundering regulations.
However, cryptocurrencies such as Bitcoin cannot really be fully regulated, as it relies on decentralized technology which no single person controls.
You also have the possibility that the UK government can, potentially, one day, ban cryptocurrency transactions.
There is always the chance that your cryptocurrency balance can potentially be stolen, especially if you are only relying on a hot wallet. This is why it is essential that you have a hardware wallet just in case, and never store all of your cryptocurrencies on a single wallet.
A Guide to Selling Cryptocurrency and Making a Profit
Once you have completed your first purchase of a cryptocurrency within the UK, you are now relying on the markets to tip the odds in your favor. In other words, if you want to make a profit, the value of the cryptocurrency you just purchased needs to increase. This will only happen if the demand outpaces the supply.
So, you can essentially buy, let’s use ETH as an example here, hold onto it for a few years, when the value increases by a certain %, and sell it later on. TO sell it, at least on eToro, the only thing you need to do is click on the sell button next to the cryptocurrency on your portfolio page.
However, this is only the case if the cryptocurrency is still on the hot wallet. If at some point in time you transferred it to a hardware wallet, you’ll need to transfer the coins from your wallet back to the exchange’s wallet, sell it, convert it into USD, and then make the withdrawal, all of which will incur additional fees.
eToro – Your Best Option When It Comes to Buying and Selling Cryptocurrencies in the UK
Hopefully, at this point, you are fully aware of all of the methods, benefits, and risks that are involved with the process of purchasing, trading, and selling cryptocurrencies. There are many brokerages and exchanges out there that will allow you to purchase cryptocurrencies, however, you will really need to dig into them in order to find a solution that meets all of your specific needs. If you are looking for the best-regulated broker to buy cryptocurrencies right away, eToro will give you access to 23 cryptocurrency coins to pick from, all of which can be purchased easily. Keep in mind that you will need to fulfill the minimum investment first though.
The cryptocurrencies currently supported on eToro include Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Ripple (XRP), Dash (DASH), Litecoin (LTC), Ethereum Classic (ETC), Cardano (ADA), IOTA (MIOTA), Stellar (XLM), EOS (EOS), NEO (NEO), TRON (TRX), ZCASH (ZEC), Binance Coin (BNB), Trezos (XTZ), Compound (COMP), Chainlink (LINK), Uniswap (UNI), Yearn. Finance (YFI), Dogecoin (DOGE), Aave (AAVE), and Decentraland (MANA).