How to Invest in Cryptocurrency in the UK: A Simple Guide for Beginners

Entering the cryptocurrency market as a beginner can be intimidating. Cryptocurrency prices are volatile and often driven by speculation, so having a firm grasp of risk management is crucial. It’s also important to choose a reputable trading platform when investing – preferably one approved by the FCA.

This guide is aimed at first-time investors. I explain how to invest in cryptocurrency safely in the UK, which platforms to consider, and how to minimize risks. I also cover cryptocurrency basics, including the importance of wallets and the different types of assets available. Read on to embark on a cryptocurrency journey with best practices in mind.

Beginner-Friendly Walkthrough on How to Invest in Cryptocurrency UK (Full Guide)

The walkthrough above provided a quick snapshot of how to get into cryptocurrency in the UK. This section explains each step in a lot more detail, ensuring no stone is left unturned. First-time buyers can read on for a smooth cryptocurrency investing experience.

Step 1: Open an eToro Account

I briefly mentioned that eToro is a popular choice for cryptocurrency beginners. It offers over 100 cryptocurrencies, no fees are charged on GBP payments, and it’s approved by the FCA.

Therefore, I’ll use eToro for the remainder of this tutorial. You can, however, use any other platform; the required steps will be similar.

So, head over to the eToro website to open an account. Provide eToro with your name, residential address, national insurance number, and other requested details. Confirm your email address and mobile number when prompted.

Step 2: Complete Know-Your-Customer (KYC)

Like all regulated trading platforms, eToro must comply with KYC regulations, as explained in the FCA handbook. This simply means you need to upload some documents.

First, upload a passport or driver’s license. This is to confirm your identity. Second, upload a recently issued proof of address. For instance, a utility bill or credit card statement.

Step 3: Deposit GBP 

You can now deposit GBP into your eToro account.

The minimum deposit is $100 (about £77) when using the following payment methods:

• Visa/MasterCard/Maestro (debit or credit)
• Skrill
• PayPal
• Neteller

The minimum increases to $500 (about £385) when depositing funds via a UK bank transfer.

All deposit methods are processed without fees.

Step 4: Choose Which Cryptocurrency to Purchase

You’ve now got funds in the eToro account. You can proceed to the next step if you already know which cryptocurrencies to buy. If not, click the ‘Discover’ button from the left-hand sidebar. Then click ‘Crypto’.

You’ll now see a list of over 100 cryptocurrencies across various categories. For example, eToro shows the best and worst-performing cryptocurrencies in the past 24 hours. You can also view cryptocurrencies by their market capitalization.

Clicking a cryptocurrency reveals useful information about the respective cryptocurrency. This includes news stories, charts, sentiment, and social indicators from other eToro investors.

Step 5: Complete Cryptocurrency Investment

You can now complete your cryptocurrency investment.

• Click ‘Trade’ if you’re using the search bar to find the desired cryptocurrency
• Click ‘Buy’ if you’re already on the cryptocurrency’s research page

As you’ll see from the image above, you need to specify the investment size in USD. In my example, I’m buying $250 (about £190) worth of Pepe, a popular meme coin.

Finally, click the ‘Buy’ button to confirm the purchase.

Step 6: Decide How to Store Cryptocurrency

eToro executes cryptocurrency investments instantly, so you can view the purchased coins by clicking ‘Portfolio. You don’t need to do anything else if you’re happy to leave the cryptocurrencies in the eToro account. This is because eToro offers free wallet storage, so it’s responsible for keeping client-owned coins safe.

That said, you can also withdraw the cryptocurrencies from eToro to a private wallet. This means you’re taking full responsibility for security, so you’d need to be comfortable with private keys and backup passphrases. My beginner’s guide on the best Bitcoin wallets will help you make an informed decision.

Where to Invest in Cryptocurrency: Best Places in the UK

I’ll now take a closer look at the different places to invest in cryptocurrency in the UK. I’ll cover various cryptocurrency exchanges and wallet providers, ensuring you choose the best option for your experience level and goals.

Cryptocurrency Exchanges

The best place to buy Bitcoin and other cryptocurrencies is via online exchanges. These platforms specialize in digital assets for retail clients, so you can normally invest with everyday payment methods (e.g. debit cards and bank transfers).

Some exchanges are approved by the FCA, ensuring a safe experience. Others operate outside of the UK, so FCA protections don’t apply.

Key considerations to make when choosing an exchange include trading commissions, available coins, and user-friendliness. Most important is that the exchange offers robust security.

In my view, eToro and MEXC are the best cryptocurrency exchanges in the UK, so I’ll briefly explain what these platforms offer. These two exchanges also ended up at the top of the list of exchanges for buying Ethereum in the UK.

eToro – FCA-Regulated Platform With Instant and Free GBP Payments 

Not only is eToro approved by the FCA but it’s fully regulated, just like a traditional stockbroker. It also holds licenses with other global regulators, and client funds are segregated in FSCS-member bank accounts. Therefore, eToro offers the safest way of investing in cryptocurrencies in the UK. Getting started takes minutes; just open an account and deposit some funds.

You can use a debit/credit card, e-wallet, or UK bank transfer. eToro offers over 100 cryptocurrencies, including popular meme coins like Pepe, Bonk, Shiba Inu, and Dogecoin. The trading commission of 1% is higher than other exchanges. But, you can deposit GBP without paying fees. What’s more, GBP withdrawals also come without charge.

eToro is also a good option if you prefer investing passively. Its ‘copy trading’ feature allows you to copy an experienced cryptocurrency investor. So, any investments they make will be replicated in your account. This will be done proportionally based on the amount you’ve allocated for copy trading. eToro offers customer support via live chat but only between Monday and Friday. It provides a free mobile app for those who like to trade on the move.

Visit eToro

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more

MEXC – Choose From Almost 3,000 Cryptocurrencies Without Paying Trading Commissions

MEXC is an offshore cryptocurrency exchange with over 15 million active users. It isn’t regulated by the FCA, so UK protections don’t apply. It does, however, have robust security practices, including cold storage wallets and two-factor authentication. Moreover, MEXC publishes its asset reserves, ensuring sufficient funds to cover user deposits.

If you’re comfortable using a non-UK platform, MEXC is the cheapest exchange around. No commissions are charged when placing limit orders. This means you need to specify the price when your trades are executed. Alternatively, you can place instant market orders and pay a tiny commission of 0.02%.

Another benefit of using MEXC is its vast asset library. Nearly 3,000 digital currencies are listed, including large-caps, meme coins, and new launches. It offers a free mobile app for iOS and Android, plus a copy trading tool for passive investing. MEXC also offers derivative markets, including perpetual futures with leverage of up to 200x.

Visit MEXC

No-KYC Exchanges

I mentioned earlier that FCA-regulated exchanges must comply with KYC requirements. This means users must upload a government-issued ID before investing.

However, there are also exchanges offering a ‘no-KYC’ experience, so you can register without providing documents. You won’t be required to provide any personal information either.

In most cases, all that’s needed is an email address. No-KYC exchanges offer other benefits, including low fees, access to cryptocurrency futures, and competitive staking rewards.

My research shows that Margex and BloFin are the best no-KYC exchanges, so I’ve provided more information below.

Margex – Trade High-Risk High Return Cryptocurrency Futures With 100x Leverage

Margex is a cryptocurrency futures platform that offers leverage of up to 100x. In simple terms, this means you can trade £1,000 worth of cryptocurrencies with just £100. Futures support long and short trading, so you can predict whether you believe the price will rise or fall. Futures are, however, risky, as unsuccessful trades can be ‘liquidated’.

This means the position is automatically closed and you lose the original margin. Margex supports dozens of markets, including Bitcoin, Ethereum, and XRP. It also has low fees, with limit orders costing just 0.019%. Market orders are charged 0.06%. Margex has partnered with payment providers, so you can also buy cryptocurrency with a debit/credit card.

The minimum requirement for UK investors is £4. Margex is also a good choice for earning passive rewards on cryptocurrency holdings. It pays 4-5% interest on multiple coins, including Bitcoin and Ethereum. Margex also offers a demo trading platform without requiring users to register. This will help you decide whether Margex is suitable.

Visit Margex

BloFin – User-Friendly Trading App Supporting 300+ Popular Cryptocurrencies

BloFin is one of the best options for trading cryptocurrencies on the go. It offers a user-friendly app for iOS and Android; fully optimized for a smooth investing experience. Over 300 cryptocurrencies are supported, including some of the best meme coins. This includes Dogecoin, Shiba Inu, First Neiro on Ethereum, and dogwifhat.

The mobile app comes with customizable charts, ensuring analysis can be performed even on a smartphone. This includes technical indicators and time frames ranging from a minute to a month. Another feature is that BloFin supports spot trading and perpetual futures. The latter is ideal for trading with leverage and placing short-selling positions.

BloFin also enables UK traders to buy cryptocurrency with a debit/credit card. GBP payments are processed by Simplex, so fees average 3.5-5%. BloFin also offers copy trading tools. The top-performing investors have made over 250% in the past 90 days. It also offers a free academy, allowing beginners to learn the ropes of cryptocurrency trading.

Visit BloFin

Cryptocurrency Wallets

Wallets are an integral part of the cryptocurrency ecosystem. Think of them like a bank account. But for storing crypto assets rather than pounds and pence. And, just like bank accounts, wallets allow users to send and receive funds.

It’s important to distinguish the two main types of cryptocurrency wallets:

• Custodial Wallets: These wallets are aimed at beginners. The provider is the ‘custodian’, so it’s their responsibility to keep the cryptocurrencies secure. You will, however, need approval when making transactions.
• Non-Custodial Wallets: Favored by ‘cryptocurrency evangelists’, these wallets provide full control of every aspect, including storing, sending, and receiving funds. No approval is needed for cryptocurrency transactions, and nobody can access the crypto wallet but users themselves.

Crucially, both wallet types typically support crypto investments too, so you won’t be required to register with an exchange.

I found that the eToro Money Wallet is the best custodial option, while Exodus is ideal for those seeking non-custodial storage. I explain why in the following section.

eToro Money Wallet – Beginner-Friendly Custodial Wallet for iOS and Android Smartphones

eToro Money Wallet is one of the easiest cryptocurrency wallets to use. It’s a popular option for investors with little to no experience. It supports the three main wallet segments, storage, sending, and receiving cryptocurrencies. However, it’s a custodial wallet, so transactions require approval before being posted to the network.

Nonetheless, eToro Money Wallet also supports instant payments via GBP. This means you can buy cryptocurrency directly from the wallet app. It’s also a multi-asset wallet, so you can build and manage a diversified portfolio in one secure place.

Another feature is the ‘unlosable private keys’. Put simply, this means you can access the wallet even if you lose the device or forget the password. eToro Money Wallet also connects to the main eToro exchange. As such, you can access other eToro assets, such as stocks, ETFs, forex, indices, and commodities. eToro Money Wallet is free to use, but outgoing transactions will incur a surcharge.

Visit eToro Money Wallet

Exodus – Take Full Control of Your Cryptocurrency Investments and Private Keys

Exodus operates in complete contrast to eToro Money Wallet, as it offers non-custodial storage. This means you control the private keys, similar to keeping cash in a safe at home. As such, you can send and receive funds without needing approval. You can also avoid counterparty risks, as not even Exodus can access the funds.

Equally, however, Exodus won’t be able to help if you misplace the private keys, so you bear full responsibility for security. Nonetheless, Exodus supports most cryptocurrencies, with over 50 compatible blockchains built into the wallet. This includes everything from Bitcoin and XRP to Solana, BNB, and Litecoin, not to mention Ethereum, Cardano, Dogecoin, and EOS.

You can also add custom cryptocurrency assets, such as ERC-20 and SPL tokens. Exodus is free and outgoing transactions come without surcharges. It’s available on multiple devices, including Android, iOS, Windows, and Mac. Best of all, you can buy cryptocurrency instantly with a debit/credit card.

Visit Exodus

Cryptocurrency Types: Key Terms to Know

The cryptocurrency ecosystem has many terminologies. This includes different cryptocurrency types, so it’s wise to have an understanding of the basics.

Here’s what you need to know when learning how to invest in cryptocurrency:

• Bitcoin: The first cryptocurrency to launch was Bitcoin. It’s the largest cryptocurrency by market capitalization, making it the best option for first-time investors.
• Altcoins: In addition to Bitcoin, millions of other cryptocurrencies can be traded. These are known as alternative coins, more commonly called ‘altcoins’.
• Meme Coins: Altcoins come with sub-niches, with meme coins being the most popular. These cryptocurrencies are based on internet memes, public figures, or popular culture trends. The most popular are Dogecoin and Shiba Inu. As explained by Bloomberg, some meme coins have market capitalizations of several billion dollars.
• Utility Coins: These cryptocurrencies provide value within the respective project, often for access to certain services. For example, utility coins offered by exchanges can provide lower commissions. Similarly, a mobile game could offer a utility coin as a reward when completing levels.
• Stablecoins:  A small number of cryptocurrencies are known as stablecoins, as they’re pegged to a real-world currency or asset. This often means stablecoins don’t experience volatility. For example, Tether and USD Coin are closely valued at $1 at all times.
• Coins and Tokens: Beginners will find that coins and tokens are often used interchangeably to describe cryptocurrencies in general. However, there is a difference. Coins like Bitcoin, Ethereum, and Solana have a proprietary blockchain. Tokens operate on another blockchain. For example, Bonk was built on Solana. And Shiba Inu was built on Ethereum.

There are dozens of other cryptocurrency niches covering various markets, such as gambling, gaming, artificial intelligence, and real-world tokenization. Certain niches experience pricing rallies, which can last for a few days to several months. Being aware of trending niches is a great strategy to maximize gains.

Other Methods to Invest in Cryptocurrency

I’ve explained how to invest in Bitcoin in the UK via brokers, exchanges, wallets, and P2P marketplaces. There are, however, other ways to access this market:

Cryptocurrency ETFs

ETFs are not only a great way to invest in commodities like gold and wheat but also cryptocurrencies. Currently, ETFs are available for Bitcoin and Ethereum, but other popular cryptocurrencies are expected soon.

Here’s how cryptocurrency ETFs work:

• A large financial institution, such as BlackRock or Fidelity, sells shares to investors.
• Those shares represent cryptocurrencies that are held by the institution.
• This means ETF price movements closely mirror the actual market
• Cryptocurrency ETFs trade on stock exchanges, making them a great choice for beginners
• This is because you won’t need to invest via exchanges or wallets
• Nor do you need to worry about storage, as the ETF provider is the custodian

You can buy Bitcoin and Ethereum ETFs on eToro at 0% commission. The minimum investment requirement is $10 (about £7).

Visit eToro

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more

Cryptocurrency Futures

Cryptocurrency futures can’t be traded on exchanges based in the UK. This is because they’re cryptocurrency derivatives, which the FCA has restricted for retail clients. However, futures can be accessed when using an offshore exchange that doesn’t implement KYC. This is because users can register without providing personal information, such as their nationality.

So how do cryptocurrency futures work? Here’s the basics:

• The most popular futures type are ‘perpetuals’, which don’t come with a settlement date
• They closely track the real-time spot price of the respective market
• For example, if Ethereum is trading at $2,900, so will the perpetual futures
• Futures enable traders to apply leverage, meaning account balances can be amplified
• They also support short-selling, so you can speculate on a cryptocurrency declining in value

One of the best cryptocurrency futures platforms is MEXC, considering it offers 0% commissions and leverage of up to 200x.

Visit MEXC

The Cryptocurrency Thesis: Investment Potential and Risks

This section discusses the cryptocurrency investment thesis for 2025. Read on to make an informed decision on the potential upside and risks.

Benefits of Investing in Cryptocurrency in the UK

Cryptocurrencies are a high-growth asset. While many cryptocurrencies have produced losses, the broader market has outperformed traditional assets for over a decade.

According to CoinGecko, here are some examples of how cryptocurrencies can produce unprecedented returns:

These are just some examples, based on the largest cryptocurrencies by market capitalization. However, there are also micro and small-cap projects that have also returned significant amounts. These are similar to penny stocks on the Alternative Investment Market (AIM), meaning the potential rewards and risks are substantial.

Risks of Investing in Cryptocurrency in the UK

It’s important to understand that many cryptocurrencies trade at a fraction of their all-time highs. This means investors have been left with large losses.

• For example, Decentraland – a popular metaverse project – produced life-changing returns in 2020/2021. Decentralized peaked in November 2021 at $5.90. Today, Decentraland trades at $0.44. So, those investing near the peak are now down almost 92%.
• Similarly, Dogecoin witnessed a strong rally in 2021, eventually reaching an all-time high valuation of over $80 billion. This priced Dogecoin at $0.74. Today, Dogecoin trades 56% below its peak.

These are just two examples of how cryptocurrency valuations can capitulate. Beginners should consider diversifying into at least ten different projects to mitigate the risks.

Pros and Cons of Investing in Cryptocurrency in the UK

The pros and cons of buying cryptocurrency are summarized below:

Common Errors Made By Cryptocurrency Beginners (And How to Avoid Them)

We’ve established that cryptocurrencies are only suitable for investors with a high-risk tolerance. I’ll now discuss some of the most common mistakes made by first-time investors. I’ll also explain how to avoid these errors, ensuring you invest with best practices in mind.

• Investing Too Much: Beginners will often look at historical returns and invest more than they can afford to lose. This is strongly discouraged. Cryptocurrencies are high-risk, so there’s no knowing what the future holds. As mentioned, many cryptocurrencies are worth a small fraction of their prior all-time high. Only consider investing small amounts if you wish to proceed.
• Not Researching Projects: Another common mistake is investing in cryptocurrencies without first researching them. Understanding the basics is crucial, such as what the project does, its goals, and whether it solves any real-world problems. At a minimum, read the project’s whitepaper, which should be available on its website. This explains everything stakeholders need to know.
• Failing to Diversify: Picking the right cryptocurrencies is challenging, considering millions have been created. Failing to diversify is a high-risk move; you could choose a cryptocurrency that fails to deliver. Instead, it’s wise to invest in at least 10 different projects. Only one needs to blow up to see sizable returns.
• Expecting Prices to Recover: Beginners often believe that cryptocurrency prices will always recover. This couldn’t be further from the reality. Even large-cap projects like XRP, Litecoin, and Dogecoin have declined by significant amounts. It’s important to set realistic expectations before buying cryptocurrencies. And, if needed, don’t be afraid to cut your losses by cashing out at less than you originally invested.

Conclusion

To conclude, UK residents can invest in cryptocurrencies via many providers. However, the overall safest option is to use an FCA-approved platform. These providers legally accept UK clients, ensuring a safe and credible cryptocurrency journey.

I found that eToro is one of the most popular options for beginners. This regulated platform accepts instant and free GBP payments. You can then trade over 100 coins, including Bitcoin, Dogecoin, and Shiba Inu.

Visit eToro

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more

FAQs

Are cryptocurrencies legal in the UK?

Cryptocurrencies are legal in the UK. The only exceptions for retail clients are derivatives and ETNs, as per FCA guidelines.

What is the minimum I can invest in cryptocurrency?

Most cryptocurrency exchanges have small trade minimums of around $1. Minimum deposit requirements are often slightly higher.

How do I buy and sell crypto UK?

You’ll need to register with an exchange to buy and sell crypto in the UK. Popular options include eToro, MEXC, Margex, and BloFin.

Where is the best place to buy crypto UK for beginners?

Although fees are high at 1%, I found that eToro is the best option for beginners. Its investment platform is suitable for those without prior experience.

How much to invest in crypto per month?

Investing in crypto every month is a great way to benefit from dollar-cost averaging. The exact amount should align with your budget, and how much you’re prepared to lose.

Do UK investors need to pay tax on crypto?

UK investors get a £3,000 capital gains allowance in 2024/25. Any realized profits above this amount will be subject to tax.

How much does it cost to buy a cryptocurrency?

Similar to stocks, cryptocurrency prices are determined by market forces. You can check CoinMarketCap for real-time valuations.

References

1. COB 5.2 Know your customer (FCA)
2. Custodial vs non-custodial wallets: What’s the difference? (MoonPay)
3. What is Cryptocurrency and how does it work? (Kaspersky Lab)
4. Memecoin Mania Drives Solana Toward All-Time Highs (Bloomberg)
5. Crypto investment scams (FCA)
6. FCA bans the sale of crypto-derivatives to retail consumers (FCA)
7. Tax return reminder for cryptoasset users (Gov.UK)