How and where to buy bitcoin in the UK

If you are new to bitcoin and blockchain technology, I urge you to research as much as you can: read about it, listen to podcasts and, above all, try out the technology. Buy small amounts of bitcoin, practise transacting in it with a friend, practise storing it. Get on top of the tech before you risk any significant capital. It will take you a few days, but it’s worth allocating the time. An easy place to get your first wallet is blockchain.com.

The most difficult aspect of bitcoin is the point of transfer between “fiat” money (eg the pound in your pocket) and bitcoin. The easiest place to buy it is on an exchange. Options include Gemini, Kraken, CEX.Io, Binance, SFOX, Crypto.com and eToro. Generally, the more you want to buy, the more paperwork you have to fill in. I’ve also found that in many cases it’s easier to set up an account on your smartphone than it is on your computer, especially with Binance and Crypto.com. 

Then, once you’re set up, you’ll experience the delights of sending money to your exchange via a bank. You might end up having to make a phone call at this point. Easier options for small amounts include Bittylicious and LocalBitcoins, or even bitcoin ATMs. Revolut makes it easy, but you can’t then move your bitcoins elsewhere. You can only sell back to Revolut, which is somewhat besides the point.

You can keep your bitcoins at an exchange – some offer cold storage, similar to the way that bullion dealers often offer gold storage. But longer term (and unlike with bullion dealers) I advise against this, as if the exchange goes out of business, you’ll be in trouble. Other long-term storage options include electrum plus a multisig (multi-signature) hardware wallet or – a slightly more user-friendly option – is bitcoin storage specialist keys.casa. This will all start making sense once you start playing around with the tech.

The Financial Conduct Authority recently banned the sale of crypto derivatives to retail investors, which means that getting exposure to crypto via traditional markets has become very difficult. So my advice is to go down the rabbit hole, and buy and hold actual bitcoin as it was meant to be bought, and hold. 

If you’d still prefer some sort of listed option, then you could buy Microstrategy (Nasdaq: MSTR), which has become something of a proxy for bitcoin. Or there is London-listed bitcoin miner Argo Blockchain (LSE: ARB), though its share price has lost touch with reality. Alternatively, as more institutions follow the likes of Ruffer, you might well be able to get some exposure to bitcoin in the longer run via more and more investment trusts, so keep your eyes open.

If you’d like to read more, Dominic has put together a downloadable Beginner’s Guide to Bitcoin for MoneyWeek subscribers, which includes a bonus section on other cryptocurrencies. If you’re not already a subscriber, sign up now to get the report plus your first six issues free.