How to Buy Bitcoin in the UK?
- What is Bitcoin?
- How to Buy Bitcoin in the UK?
- Bitcoin Trading
- Where can I Use Bitcoin in the UK?
- Bitcoin ATMs in the UK
What is Bitcoin?
Bitcoin is the first virtual currency of its kind, launched back in 2009 by Satoshi Nakamoto. Satoshi’s goal was to remove the control of governments, central banks and banks on money, as is the case with the Fiat money of today.
For Satoshi, the financial crisis was the last straw and in creating a decentralized digital currency, central banks and governments have yet to catch up or get into position to regulate Bitcoin and other cryptocurrencies that have since been created.
Bitcoin has garnered plenty of attention, rising from sub-$1,000 levels at the end of last year to just shy of $10,000 today.
The number of merchants and service providers that accept Bitcoin continue to increase in numbers globally, with there being a number of ways in which interested parties can purchase Bitcoin.
While Bitcoin has grabbed the headlines, the most important characteristic of Bitcoin is the blockchain technology that drives it. Blockchain is a general ledger that is decentralized and stored on all of the computers that form the Bitcoin network. Other characteristics that have fueled demand for Bitcoin include Bitcoin holder anonymity, which has raised concerns over Bitcoin and other cryptocurrencies being used by the criminal underworld.
Bitcoin was the first, but there have been many cryptocurrencies created since and many are in search of the exponential gains that the lucky few earned if invested in Bitcoin in the early days.
By market cap, Bitcoin remains by far the largest and it will take some time before it loses the top spot, if ever.
How to Buy Bitcoin in the UK?
There are a number of ways to buy and sell Bitcoin in the UK. The easiest and most simple one being via brokers which provide traders with the opportunity to take advantage of Bitcoin’s fluctuations. Plus500 is one of the brokers that allow trading cryptocurrencies.
Step 1 – Open an Account
To open an account with Plus 500 is a simple process, click here to continue. The registration is fast and easy. All needs to be done is to fill your email address and password.
Step 2 – Verify Your Account
In order to activate your account, you must provide the required documentation. Plus500 provides a simple and fast online platform which makes it an instant process. Customers are required to verify their accounts for identification and security purposes in accordance with Plus500 due diligence process.
Step 3 – Buy and Sell Bitcoin
Once Plus500 approves your account, you can start trading Bitcoin as well as the most popular cryptos. Bear in mind that Plus500 provides a leverage position and the opportunity to short Bitcoin when Bitcoin prices decline. Currently, you cannot short Bitcoin in any exchange which leaves you with brokers such as Plus500 to make a profit should Bitcoin prices fall.
The other method being via a Bitcoin exchange. Most exchanges have developed mobile phone apps to make it easier for those looking to buy and sell Bitcoin. The Exchanges will request credit/debit card or bank account details to cover the purchase price and bank details for the transfer of proceeds from the sale.
Normally, for higher limits on Bitcoin exchanges, the buyer is required to provide bank account details, while debit cards can be used for lower limits on transactions.
The good news is that you don’t need to buy a minimum of one Bitcoin and buyers can own a fraction of a Bitcoin when purchasing through Bitcoin exchanges or ATMs. Using Bitcoin exchanges may be somewhat more long-winded in terms of completing all of the necessary details, but the transaction fees are much more competitive and would be the best way forward.
Recommended UK Bitcoin exchanges include:
CEX.IO – This exchange provides buying and selling of Bitcoins as well as other cryptocurrencies. They allow the purchase of Bitcoin via credit/debit card, wire transfer, and cryptocurrencies. These are the steps that one must follow in order to purchase Bitcoin via CEX.IO.
Step 1 – Open a Digital Wallet
A digital wallet is where you hold your cryptocurrencies and interacts others via the blockchain technology. There are many providers of digital wallets, however, it is important to make a deep research before you decide which one is the best for you. Currently, the most popular digital wallets provider is Blockchain.info.
Step 2 – Register & Open an Account
Once you enter CEX.IO website, register and open an account that can provide you with their service.
Step 3 – Receive the 2FA Code
This is the authentication code as well as your password when you access CEX.IO. The code will be generated by an application and will be delivered to you by SMS.
Step 4 – Purchase Bitcoin
Now you can easily purchase Bitcoin and other cryptocurrencies. Note that you can always buy fractions of Bitcoin and CEX.IO allows you to choose fixed amounts with your own currency.
Choose the payment option that is most convenient for you.
In order to complete the purchase, the broker will ask you to verify your identity with documents and various details.
More recommended Bitcoin brokers in the UK:
Bitstamp – They make buying and selling easy, requiring those looking to buy Bitcoin to simply create an account, make a fiat currency deposit via SEPA wire transfer or other deposit method and then simply purchase Bitcoins once the funds have reached the newly created account.
Coinfloor – This exchange is said to have become the largest exchange for Bitcoin to Sterling exchanges and is considered to be the first publicly auditable Bitcoin exchange, with an emphasis security on its website.
CoinCorner – Allows the use of 3D secure enabled credit to immediately purchase Bitcoins, debit cards to deposit funds into an account for the purchase of Bitcoins or currency deposits made by SEPA bank transfers.
Coinbase – Supports 32 countries with more than 10m customers served and allows the purchase of Bitcoin for UK buyers using 3D secure enabled credit and debit cards.
There are others and it does require some amount of research to find the best exchange that addresses buy and seller requirements on fees, security, etc. Exchanges will also provide a number of enticing offers including bonuses, so it is worth having a look at the exchanges to see which are the most competitive, though it would be advisable to sign up with a reputable one.
If the sound of a Bitcoin exchange is off-putting, the alternative is to buy and sell Bitcoins via a Bitcoin ATMs, though most will only accept cash for a purchase, or face-to-face.
It’s worth noting that buyers and sellers of Bitcoin in the UK will face an issue when buying on most exchanges. Because UK banks are generally unwilling to provide banking services to Bitcoin exchanges, exchanges tend to bank outside of the UK and this, not only adds additional fees on to transactions but also increases the time it takes for money transfers by up to 5-days depending upon where the exchange’s bank is located.
The popularity of Bitcoin trading has certainly surged in recent years, with more traders entering the market each day as concerns over Bitcoin being a bubble ready to pop continues to ease over time. Volatility in Bitcoin has enticed traders from the more traditional markets, with the setup of trading platforms through Bitcoin exchanges facilitating the trading of Bitcoin and other cryptocurrencies.
Bitcoin exchanges provide the liquidity and the platform for trading, with the spreads between bid and ask prices narrow enough for traders to make tidy profits on a daily basis, as long as they are on the right side of a trade. Bitcoin exchanges also offer OTC markets and favorable fees to draw in traders the world over.
With a large number of Bitcoin exchanges now in existence, traders will look for exchanges that provide the most favorable fees, whilst also provide the appropriate security levels needed for such a digital currency.
Today, exchanges provide traders with the opportunity to go both long and short on trades through investing into CFDs, removing the need to hold Bitcoin wallets and Bitcoin itself, with margins also on offer. The larger exchanges offer up to 20x leverage.
The price comparison is a key consideration as well as fees. Some exchanges provide traders with no fees for daily trading, but with UK banks having issues with Bitcoin exchanges, the time taken for wire transfers to reach exchange accounts for purchases and for sales proceeds to reach the trader is also issues faced by the UK Trader.
The best brokers for Bitcoin trading in the UK include:
Plus500: They have a wide variety of cryptocurrencies that can be exchanged via a convenient platform. Plus500 provides the contract for differences which allows trading without physically owning an instrument.
eToro: Has over 6 million registered traders and requires a minimum deposit of £200. eToro is the widest social trading platform.
AvaTrade: A minimum deposit of just £100, with no commission on CFD trading. The broker support Bitcoin gold, Bitcoin Cash, etc.
MARKETS.COM: No commission and no withdrawal fees, with the ability to trade CFDs as important to the trader for short positions. Minimum deposit is also just £100.
FXTM: Providing traders with cryptocurrencies trading with low spreads and minimum commission. FXTM supports Bitcoin, Bitcoin cash, Litecoin and more.
Where can I Use Bitcoin in the UK?
The use of Bitcoin across the UK is growing and more retailers are accepting Bitcoin for purchases and/or services, including pubs and even universities.
For those looking to get a sense of how widely accepted Bitcoin is in the UK, WheretospendbitcoinsUK is a good place to start and the site offers search functionalities to those looking to use Bitcoin to purchase particular goods or services across the country.
Bitcoin’s anonymity will continue to support the rising use of Bitcoin across the country and beyond, though price volatility will always be a factor.
Bitcoin ATMs in the UK
As the Bitcoin world has evolved, so have the different platforms on offer for those looking to buy and sell Bitcoin. While Bitcoin exchanges are the most secure platform for transactions, Bitcoin ATMs have been on the rise globally.
Unlike traditional ATMs linked to the centralized banking networks, Bitcoin ATMs are there to simply facilitate the buying and in some cases the selling of Bitcoins.
Bitcoin ATMs have increased in popularity as they continue to provide buyers and sellers with the anonymity that so many require. For the privilege of anonymity, Bitcoin ATM transactions come with significantly higher fees than on Bitcoin exchanges and there are also limits on the size of transactions.
On a global basis, the average fee for a buy order is 8.54%, calculated on 1,126 Bitcoin ATMs worldwide, with redemption fees averaging at 7.03%, calculated based on 410 ATMs globally that support the sale of Bitcoin.
In the UK, the buying fees are perhaps slightly more competitive than the global average, while the fees for the sale of Bitcoins are on the higher end and can be as high as 20% of the value of Bitcoins being sold.
To find the nearest Bitcoin ATM, Coin ATM Radar is a good website to search for the nearest Bitcoin ATM. For many, the distances will certainly too great to travel in order to buy or sell Bitcoin, which would leave buying and selling via an exchange or on sites such as LocalBitcoin.
- How to Buy Bitcoin Cash?
- Top Five Cryptocurrencies Experts Talk about Bitcoin, Blockchain and ICO’s
- How Blockchain will change our Life, Economy and the World
While UK banks may be unwilling to provide the necessary services for Bitcoin exchanges today, times are likely to change. Bitcoin is becoming more widely accepted across the country and has garnered significant interest from both those looking for a long-term investment and those looking to trade on the volatility.
The UK market is in need of an upgrade to facilitate buying and selling, with face-to-face transactions the best option for those looking to hold a small number of Bitcoins and not have to deal with the impact of exchange rates and fees akin to Bitcoin exchanges.
We will expect the upgrade to happen, however, though the UK government will need to follow its Asian peers into accepting Bitcoin.
As is the case in other jurisdictions, those looking for anonymity pay the price, with fees considerably higher when buying and selling Bitcoin using Bitcoin ATMs or face-to-face platforms such as LocalBitcoin. It’s therefore important for buyers and sellers to understand whether anonymity is the top priority or the fees associated with transactions and then choose the best platform.