Best Crypto Exchanges in the UK 2022
Are you keen on signing up with a crypto exchange? Or maybe you want to switch to another exchange but you’re not sure where to start as there are so many.
We’ve tested and researched to bring you the top cryptocurrency exchanges to use in the UK.
We’ve reviewed over 100 platforms comparing a huge range of factors including ease of use, trading fees, customer support, security and more.
10 Best Crypto Exchanges UK
Here is a quick list of our top exchanges to use in the UK:
- eToro – Overall Best Crypto Exchange UK
- Binance – Best Crypto Trading Platform UK for Experienced Traders
- Coinbase – User-Friendly UK Crypto Exchange
- Kraken – Crypto Exchange with High Deposit Limits
- Crypto.com – Top Crypto Exchange with User-Friendly Mobile App
- AQRU – UK Crypto Exchange with Crypto Savings Account
- Uphold – UK-Based Crypto Exchange & Multi-Asset Brokerage Platform
- Margex – Best UK Crypto Exchange to Buy on Margin
- Bitstamp – Long-Running Crypto Exchange with Low Trading Fees
- Coinjar – Crypto Exchange with Lots of Additional Features
The adoption of cryptocurrency continues to be on an exponential rise, with new coins emerging and presenting potential gains in the financial world. Greater adoption has led to instrumental and innovative changes in the world’s economy.
Cryptocurrency has triggered major developments in how we conduct transactions throughout the world. In fact, it has evolved to using non-fungible tokens to sell rights of intellectual property and arts, for financial exchange, and most importantly, payment services.
Due to its essential impact in improving seamless financial transactions, there is no doubt that cryptocurrency has totally revolutionised the world’s financial system and is here to stay.
However, diving headfirst into the world of crypto might seem a little bit complicated and daunting to many. Often, beginners have problems as to where to start, as several platforms offer endless lists of coins with countless features, making it difficult to know what to look for.
In this article, we’ve carefully analysed and listed the top 10 best crypto exchanges in the UK, their features, pros and cons and transaction fees.
We carefully scrutinised their top features and other factors crucial to deciding which UK crypto exchange is best for you.
After reading this article, you’ll have a good understanding of cryptocurrency exchanges as well as complete guidance on choosing the best crypto exchange UK for your needs and requirements.
10 Best Crypto & Bitcoin Exchanges UK Reviewed
You need to find a platform that suits you in terms of fees, ease of use, safety, supported coins and so on. Therefore, in our reviews, we will take into account all of these elements.
There are many trusted crypto platforms out there, and each is suitable for a certain type of investor. To find a platform that fits your investment goals, discover what each one offers below.
1. eToro – Overall Best Crypto Exchange UK
Not only is eToro one of the most secure and safest crypto exchanges in the UK, but it is also extremely cost-effective. Different from other crypto trading platforms, this popular exchange is regulated and authorised by the UK’s Financial Conduct Authority (FCA).
You can open up an account and buy crypto on eToro within minutes. You can then deposit funds with your debit/credit card or e-wallet right away, or opt for a bank transfer which may take a few days.
The minimum deposit for UK investors on eToro is $10. After you added funds to your account, you’ll have access to more than 70 cryptocurrencies. You can buy Ethereum, Bitcoin, Cardano and Solana, just to name a few.
You can also invest in popular meme coins like Dogecoin as well as metaverse coins. eToro is constantly adding the newest cryptocurrencies to its portfolio such as FTX token, ApeCoin and more!
One of the best things about eToro – which has just recently surpassed 20 million registered users worldwide, is its CopyTrader feature.
eToro’s Copy Trading technology allows you to trade cryptocurrencies completely hands-off by copying the buying and selling of a successful investor.
The platform also has Smart Portfolios, which are fully managed investment portfolios. It will automatically copy multiple assets based on a predetermined investment strategy.
The Smart Portfolios are designed to help investors diversify their portfolios, minimize long-term risk and take advantage of current market opportunities. Many of the portfolios include cryptocurrency.
Both features are a good introduction to the world of cryptocurrency investing for beginners.
eToro is a multi-asset platform, meaning that not only can you buy and sell cryptocurrencies such as Bitcoin and Ethereum, but you can also trade stocks, ETFs and other various CFDs.
The platform has a very simple fee structure, a fee of 1% is calculated for buying or selling cryptoassets on eToro. This fee is included in the price shown when you open or close a position. The 1% fee is added to the market price (Bid-Ask spread).
It is worth noting that a small 0.5% fee is applied when depositing in GBP. This is the platform’s currency conversion fee into dollars. However, we see this as marginal due to its low 1% fee and how eToro doesn’t charge any ongoing platform fees.
The FCA-regulated platform supports most common payment methods such as debit/credit cards, bank transfers, PayPal, Skrill, Neteller and more.
Overall, if you are taking your first steps in the crypto world and signing up for your first UK crypto exchange, eToro is the perfect option. The platform is incredibly simple to use and opening an account takes only a few minutes.
The minimum deposit to begin investing is only $10, so there’s no need to potentially risk large sums of money at the beginning.
- Regulated by the FCA in the UK
- Low minimum deposit amount
- Low trading fee
- CopyTrader feature for passive investing
- Easy-to-use interface
- Small conversion fee
2. Binance – Best Crypto Trading Platform UK for Experienced Traders
Founded in 2017 by Changpeng Zhao, Binance is the largest crypto exchange in the world. It processes more than 1,400,000 transactions in a second and is used by over 100 million people worldwide, making it among the best crypto exchanges in the UK.
If you’re searching for more of a trading platform, where you can actively buy and sell crypto, Binance is for you.
Despite having a slight hiccup with UK financial regulation in 2021, GBP deposits and withdrawals have resumed as normal.
Binance has many benefits, and it beats its competitors in terms of trading volume and registered users. With Binance, you can trade more than 1,000 digital asset pairs at a commission of only 0.1% and purchase more than 500 cryptocurrencies.
Moreover, if you own some BNB tokens, you’ll pay even less, making Binance one of the cheapest crypto exchanges in the UK.
What sets it apart from competitors is its array of trading tools and charting features. Making the platform great for experienced traders who want to dig into more technical analysis.
Another feature that Binance offers is the possibility to set up custom orders and receive pricing alerts on the app. It also offers a crypto savings account where you can earn interest, a wallet, a card, a loan and a gift card service.
Binance continues to maintain its place at the top of the world’s best crypto exchange with a low transaction fee and high level of encryption. It serves millions of users from all over the world with hundreds of fiat currencies.
Although Binance is best for experienced traders and crypto investors, it offers Lite Mode for newbies who are finding it difficult to get the hang of the Standard mode.
Its user interface features several vital trading options, including spot, futures and margin trading. It also offers a seamless way to make crypto purchases and transactions. Read our complete Binance review.
- 500+ cryptocurrencies available
- Competitive instant buy fees
- Offers a popular NFT marketplace, crypto staking and other features
- Account opening process is simple and fast
- Complicated UI is mainly designed for experienced users
3. Coinbase – User-Friendly UK Crypto Exchange
Coinbase is a mainstream crypto exchange founded in 2012 and headed by co-founder Brian Armstrong. Regarded as one of the earliest crypto exchanges, Coinbase has enjoyed a huge rise in usage like Binance.
Coinbase serves more than 70 million verified users in more than 100 countries worldwide. Located in the US, Coinbase works closely with regulators to build a reputable brand that fosters user security.
Coinbase currently supports 139 coins and 402 trading pairs and rakes in more than a billion-dollar trading volume daily.
Coinbase is a useful beginner-friendly exchange platform. However, it also features Coinbase Pro, which is ideal for experienced traders. Coinbase also offers valuable educational materials for users.
Unlike Binance, Coinbase’s transaction fee is higher when compared to other crypto exchange platforms – 1.49% for standard transactions, 3.99% for instant buys and 2% + £0.55 for withdrawals.
In addition, Coinbase charges a 0.5% spread on trades, including a fee of £0.99 – £2.99 depending on the trading volume.
Despite its high fees, many investors turn to Coinbase because they appreciate its enhanced security features and ease of use. Coinbase keeps 98% of client funds in cold wallets and it requires everyone to set up two-factor authentication. And if you log in to your account from another IP address, you’ll be asked for a confirmation.
Another feature worth mentioning is its fully-fledged crypto wallet. You can download it to your phone and get full control of your private keys which will allow you to exchange tokens within the app.
Coinbase is generally more suitable for beginners as it offers an extremely basic user interface and comprehensive educational materials for newbies looking for help to get started in the crypto world.
Meanwhile, Coinbase is less suitable for experienced traders looking for complex analytical tools and options when trading, unless using the Pro feature.
- User-friendly interface
- Reliable crypto wallet
- Responsive customer support
- Complicated fee structure
- High fees
4. Kraken – Crypto Exchange With High Deposit Limits
Kraken is one of the oldest crypto exchanges, launched barely two years after Bitcoin. Currently, Kraken offers 94 different cryptocurrencies and 403 trading pairs. It also helps businesses integrate cryptocurrency into their financial system.
Furthermore, Kraken is an entirely newbie-friendly exchange as well as a complex trading platform for experienced traders, offering API for even more flexibility.
Kraken’s transaction fees range from 0% to 0.26%. However, this fee generally depends on 30 rolling volumes. Kraken offers zero transaction fees on deposits using the Faster Payments Service. However, the SWIFT or CHAPS deposit attracts a £3 and £21 transaction fee.
An advantage of using Kraken is its high trade limit. Kraken offers a whooping £72,000 trade limit, higher than most other exchanges.
Kraken is also an excellent choice of crypto exchange for both new and seasoned traders as it offers a wide range of cryptocurrencies and trading pairs.
- Suitable for traders of different experience levels
- Advanced trading platform
- Never been hacked
- High instant buy fees
- Poor selection of educational materials
5. Crypto.com – Top Crypto Exchange with User-Friendly Mobile App
Crpyto.com is another reliable solution to buy, sell and trade cryptocurrency. It offers solutions for investors, businesses and institutional investors looking to integrate cryptocurrency into their financial systems.
The exchange is suitable both for beginners and seasoned traders, and it’s arguably one of the best crypto exchanges for UK investors. You can access the platform on the web as well as via its mobile app.
Crypto.com offers several mouthwatering features, including credit card provisions that offer perks and even interest rates on deposits.
Crypto.com features over 150 coins and 264 trading pairs and offers a wider range of cryptocurrencies when compared to other exchanges. It also rakes in more than $1 billion in daily trading volume.
Concerning fees, Crypto.com charges in an almost similar way to Kraken. It offers a progressive trading fee, from 0.4% to 0.04%. However, the disparity depends on volumes. That fee can be reduced if you decide to pay with the native token CRO.
If you decide to use the app, you’ll have an excellent user experience. The app is well-designed, and its clean interface will help you move around easily, even if you’re a beginner.
You’ll be able to track specific assets as well as stake CRO, along with 34.6% APY.
There’s also a Crypto Earn feature that will allow you to earn interest on 50 cryptocurrencies at up to 14.5% APY. That also includes stablecoins like USDT and USDC at up to 10% APY.
You should bear in mind that Crypto.com allows users to buy crypto with the app using their credit/debit card, without any need to deposit. In the first 30 days after signing up, this feature is completely free. After that period of time, a 2.99% fee will occur.
Besides a user-friendly trading app, the exchange is known for its crypto wallet. The wallet is non-custodial, supporting over 100 coins. You can even send crypto to other Crypto.com wallets at different speeds, and that can come in handy if you want to save on network fees.
Finally, if you’re new to crypto, you can explore the ‘University’ section. You can learn a lot from a wide selection of educational resources.
Crypto.com is an excellent crypto exchange for beginners and experienced traders. It is also suitable for users looking for more than just trading out of their platform.
Crypto.com’s card is a great solution for users to receive rewards and interest rates, depending on their transaction volume and card usage.
However, the platform’s main disadvantage is its complicated UI and features that can confuse new users, especially the additional products being offered on the platform.
- Can earn up to 14% interest on cryptocurrency
- Fee-free card purchases for the first 30 days
- Educational ‘University’ section
- In-app live support can be slow
6. AQRU – UK Crypto Exchange with Crypto Savings Account
Another crypto platform you may consider is AQRU. AQRU is a division of Accru Finance Ltd, a financial firm based in London.
The firm allows investors to generate a yield on their crypto holdings. You can use AQRU’s payments gateway to buy crypto, and there are five cryptocurrencies to choose from.
With AQRU, you can fund your account in BTC, ETH, USDC, USDT or DAI and start to generate interest. AQRU offers up to 12% interest per year on stablecoin deposits.
There’s also the opportunity to earn 7% interest on BTC or ETH deposits, which is considerably higher than a traditional savings account. Also, interest is paid on a daily basis, and there aren’t any lock-up periods.
Nevertheless, if you want to use the AQRU platform, the process of buying crypto is completed through MoonPay, a leading payments gateway. For the yield-generation services, AQRU doesn’t apply fees. However, some third-party fees might occur if you choose to use MoonPay.
Lastly, AQRU offers a referral bonus scheme, so you can get 75 USDT for yourself and your friend if they use your link to join the platform.
- Earn up to 12% interest on crypto deposits
- No lock-up periods
- Free GBP deposits
- Low number of cryptocurrencies
7. Uphold – UK-Based Crypto Exchange & Multi-Asset Brokerage Platform
Uphold is a crypto exchange and multi-asset brokerage platform based in the UK. It offers more than 115 cryptocurrencies, from crypto giants like Bitcoin and Ethereum to popular meme coins, DeFi coins and stablecoins.
Uphold normally charges a variable spread, but it doesn’t charge a commission for crypto trades.
The spread is different for every crypto and it largely depends on the state of the market. But for popular cryptocurrencies, it’s usually in the range of 0.8%-1.2%. You can check the current spread in the preview of an order of any digital currency before you decide to trade.
Furthermore, Uphold strives to be very transparent, and that’s one of the things that sets it apart from other exchanges. With Uphold, you can get insights into how much cash the exchange has in reserves at any time (in case of market downturns).
Also, Uphold undergoes third-party security audits, and that ensures the overall safety of the system.
Just like eToro, you can trade more than just cryptocurrency with Uphold – the platform offers stock and commodities trading. Uphold is a good option for traders interested in trading a variety of assets, although we still think eToro is overall better.
- 115 cryptocurrencies
- Stock and commodity trading
- Preview the spread before every trade
- Transparent financial reserves
- Third-party security audits
- High spreads on lower volume assets.
8. Margex – Best UK Crypto Exchange to Buy on Margin
If trading Bitcoin with up to 100x leverage sounds appealing to you, you should check out Margex. The exchange works similarly to other types of margin trading, so it doesn’t fall under the ban on crypto derivatives in the UK.
Moreover, with Margex, everything is quite transparent. If you want to open a margin trade, you can pick your leverage and see the price level as well as your maximum risk. All of this will make it easier for you to make wise decisions.
Also, Margex has an advanced crypto trading platform equipped with useful tools for technical Bitcoin trading.
You’ll come across technical indicators, customizable charts, price alerts, and limit and stop loss orders. In addition, Margex will give you insight into the Bitcoin order book and all the recent trades which will undoubtedly help you get on the right track.
Finally, Bitcoin trading on Margex entails competitive fees. There’s a 0.019% fee for creating liquidity and a 0.060% fee when you remove it from the market. You can trade with as little as £1 at a time.
- Very low maker/taker fees
- Trade with up to 100x leverage
- Advanced technical trading platform
- Minimum trade size is £1
- Limited cryptocurrencies
9. Bitstamp – Long-Running Crypto Exchange with Low Trading Fees
If you’re searching for a way to buy crypto in the UK with low fees, you should check out Bitstamp. Established in 2011, Bitstamp is one of the longest-running crypto exchanges in the world. It now supports over 50 different cryptocurrencies available for trading in the UK.
Bitstamp is known for its strong security features and great user experience. But one of the main reasons Bitstamp became so popular are because of its low trading fees.
When you complete a crypto trade, Bitstamp charges a flat 0.5% fee. If you exceed $10,000 in monthly trading volume, that fee will fall to only 0.25%.
You can also buy crypto with a credit/debit card. That will allow you to buy instantly but it will also cost you 5% per transaction.
When it comes to safety, Bitstamp holds 98% of customer holdings in cold storage and also provides protection of your assets through BitGo insurance.
To fund your account in GBP, do it via the Faster Payments (FP) network. That won’t cost you anything, although there’s a small £2 withdrawal fee.
Generally, trading on Bitstamp requires choosing between one of the two platforms or the mobile app. The app is well-designed and secure (features biometric authentication), and it will allow you to send and receive crypto instantly.
Regardless of what you choose, you’re going to have a good and safe user experience with Bitstamp.
- No minimum deposit
- Low Bitcoin trading fee
- Free deposits via Faster Payments (FP)
- App with good safety features
- Missing major cryptocurrencies
10. CoinJar – Crypto Exchange with Lots of Additional Features
Founded in 2013, CoinJar serves more than 400,000 monthly users and accrues over $10 million in daily trading volume.
CoinJar supports only 26 coins and 123 trading pairs which will be enough for newbies and regular users. However, it is very unlikely to attract experienced traders looking for a wide range of cryptocurrencies.
CoinJar is a highly reliable and secure exchange that fosters industry-standard security, which is better than many other exchanges.
CoinJar charges zero fees on deposits and withdrawals. Although there is a 2% charge on instant buy products. The trading fee on large trades on CoinJar is very competitive compared to other exchanges. Typically, the trading fee varies from 1% to 0.04%, depending on the type of trade.
In conclusion, CoinJar is another great exchange for new users looking to delve into cryptocurrency. It offers low-fee trades with a good number of crypto listings and seamless deposit methods with VISA cards to allow an easy and fast crypto trading experience.
- Seamless user experience
- Offers VISA card to spend crypto
- Easy to use mobile app to monitor a portfolio
- Instant buy and sell trading fees are too high
What Is a Crypto Exchange?
In short, crypto exchanges allow you to buy, sell and trade digital currencies.
A crypto exchange is a way to purchase cryptocurrency assets. It pairs buyers and sellers to execute a trade at a fixed rate.
Exchanges typically benefit from taking the finders fee, a small fee from the whole trade, but they will also provide you with safety, numerous tools and other features suitable for your investment goals.
There are different types of exchanges. However, Centralised Exchanges (CEX) are the most commonly used types of exchanges. CEX’s brings interested parties together and handles asset exchange via their account.
On the other hand, Decentralised Exchanges (DEX), which are less commonly used, pair transacting parties with each other directly without any interference.
Fundamentally, crypto exchanges are designed to bring parties together to facilitate the trade and exchange of cryptocurrency.
How Do Exchanges Work?
As we mentioned earlier, crypto exchanges facilitate trades between buyers and sellers, and that makes them no different from traditional stock trading sites.
If you want to know how using these exchanges exactly works, let us take you through the process, step-by-step:
- You first need to open an account with your chosen exchange by providing some personal information
- You have to deposit funds to be able to start trading. Regulated exchanges like eToro accept fiat deposits via debit/credit card or bank transfers.
- After you’ve funded your account, choose a cryptocurrency pair you want to trade. The most traded pair in this space is BTC/USD.
- Now you need to place an order at your chosen exchange and enter the amount of money you want to spend.
And that’s it. The process is more or less the same with all the platforms we reviewed above. If you’re looking for a more thorough walkthrough, you’ll find a more detailed guide on how to use a crypto exchange in the UK further down.
How to Choose the Best Crypto Exchange UK
Choosing the best cryptocurrency exchange in the UK can be a very hard decision, especially for beginners. However, the best decision is a personal decision that depends on individual priorities and preferences in the exchange platform.
While many people choose low-fee exchanges, others prefer secure and reliable exchanges.
Some users prioritise stability and longevity so they won’t have to worry about any account migration in the near future. Meanwhile, experienced users prefer adequate functionality to be able to execute trades quickly and at ease.
That being said, below are some factors to consider when choosing a UK crypto exchange.
Ease of Use
The complexity of the user interface at most times causes difficulty in operation and, many times, a bad experience. It could also lead to dissatisfaction.
Ease of use is important for beginners, and when buying and selling assets it is critical. A hard-to-navigate user interface can make it almost impossible to take advantage of fast-moving opportunities.
Security is another important factor to consider when choosing a crypto trading platform. The security of an exchange is worth looking at from two angles: security of coins and assets and, secondly, whether the exchange’s security is up to standard and satisfactory by regulators.
If an exchange’s security is not satisfactory, it can attract sanctions from regulators. Although actions from regulators are ultimate to protect users, it can lead to potential short-term hold up of funds.
When choosing a crypto exchange platform, transaction and trading fees are other factors to consider. For low-volume traders, fees may not be an immediate issue since other benefits outweigh fee costs.
Also, comparing the functionality and service provided to the fee can help determine if the charged fee is fair. Lower fee platforms are recommended for high-volume traders, while traders focused on buying and lending may consider a wide range of features and functionalities.
Supported cryptocurrencies may not be a deal-breaker for everyone, the top 20 coins make up 90% of usage after all, but for experienced traders, you may want more flexibility and freedom depending on your trading strategy.
Generally it’s always better to have more tokens at your disposal.
After all, building a diversified portfolio is highly recommended. This will reduce the risk of one asset’s performance affecting your entire portfolio. In other words, diversifying your portfolio means not putting all your eggs in one basket.
Simply, liquidity means how fast an asset can be traded without the asset’s value being affected. Given the high volatility of the crypto market, liquidity is an important factor to consider when choosing an exchange.
This is especially important when using high leverage because the inability to convert assets on time can liquidate the whole account. High liquidity is favoured and the higher the number of users on a platform generally means the exchange is more liquid.
Cryptocurrency and other financial assets are legal property in the UK.
Exchange platforms need to carry out necessary steps to comply with the regulator’s guidelines, including getting a license like an EMI license. Although licensing is optional, regulators prefer platforms with licenses.
You should look for an exchange that holds a regulatory license. In fact, that’s one of the most important things to take into account if you want to trade safely.
And that’s precisely why we find eToro the best crypto exchange in the UK. Apart from being regulated by the FCA, eToro is also regulated in Australia (ASIC) and Europe (CySEC). And in case you decide to invest in stocks or ETFs, your money will be secured by the FSCS.
Customer support is an integral part of every institution, regardless of the sector or type of platform. Customer support is essential for building trust and integrity, as a lack of support eventually leads to a loss of confidence.
Also, lack of customer support can sometimes make platform navigation and usage more difficult. On rare occasions, it can lead to a loss of money. Therefore, considering the availability of customer support is essential when choosing a UK crypto exchange.
Transaction processing time for each coin is different. However, it is also important to consider an exchange’s processing time.
Wallet security is also an important point to note if you plan to store your cryptocurrency using an exchange’s in-built wallet. Generally, there are hot wallets that make use of internet access but are not as secure as the second type, cold wallets.
A cold wallet is more secure as it does not require internet access; therefore, it is not susceptible to hacking and cyber-attacks.
It is always safer to use a cold wallet. However, you can also use an exchange’s wallet service if you’re sure that there is a standardised security protocol.
Tools and Features
In terms of tools and features, crypto exchanges are quite versatile.
Exchanges like Binance offer a variety of tools and features. The platform provides charting tools, technical indicators, custom order types and so on.
Another cool feature you might want to use is a copy trading tool offered by eToro. This feature will allow you to copy more expert traders, making it quite useful for beginners. The platform also has Smart Portfolios, a feature that can also come in handy for those looking to diversify their risk.
As you’ve probably noticed, many exchanges offer a mobile app to trade crypto. One thing is for sure: using an app to trade crypto is more convenient than using a laptop or computer.
You can complete trades on the move and check the market price anytime, anywhere. More importantly, using an app will allow you to act on trends and invest effectively.
Besides checking if an exchange has a mobile app, you should also check its quality. The thing is, some apps are rather difficult to navigate and, therefore, won’t bring you a good user experience. So, it’s important to make sure that the app you want to use allows you to do that in a smooth and easy way.
Tax on Withdrawing Funds from Crypto Exchanges
Over time, you’ll probably witness some desired price movements and make a profit. At that point, you will probably want to withdraw funds you earned thanks to your investments and use them in the real world. In that case, you’re going to have to pay tax.
If you’re a beginner, don’t worry – it’s not as complicated as it might seem at first. After all, the tax laws in the UK generally aren’t as complex. And there actually isn’t any particular cryptocurrency tax in the UK.
In fact, cryptocurrency withdrawals are subject to Capital Gains Tax (just like in equity markets). You can also be subject to Income Tax though, depending on how you’re planning to use your crypto holdings.
To make things clearer, we will explain how these two tax types work.
- Capital Gains Tax – This is relevant when you sell your crypto for FIAT currency. That said, you’ll be charged this type of tax if you’re making withdrawals from crypto exchanges. However, Capital Gains Tax only applies when you have actually made a profit; there’s no tax involved if you experience a loss or your investment ends at breakeven.
- Income Tax – Income tax applies if you perform certain DeFi transactions. That can include staking your crypto or adding it to a liquidity pool. However, if you’re not sure if this type of tax applies to you, you should talk to a professional, especially because the rules for taxation in this area can still be a bit confusing.
Capital Gains Tax rates are listed on the UK Government website. If you’re in the category of the basic Income Tax band, you’ll pay 10% on any gains. But if you’re above this band, you’ll pay 20% on the profits you make.
We hope this overview of the tax system for crypto trading in the UK helped you have a better understanding of how things work. However, everything in this area is still a bit hazy, and it’s probably best to talk to a tax professional.
You can also visit the UK government’s guide on UK tax on cryptoassets.
How to Use a Crypto Exchange in the UK
Finally, we’ll take you through all the essential steps of using a crypto exchange in the UK. In our walkthrough, we will use eToro as an example.
At the end of the day, eToro is one of the best options for trading crypto, whether you’re a beginner or a seasoned trader. This FCA-regulated platform will allow you to buy crypto (from just $10) in a very quick and easy way.
Step 1: Open an Account on eToro
First, you need to open an account on the eToro website. That’s a very straightforward process; you just need to provide some personal information as well as e-mail address and mobile number (eToro will text you the verification code afterwards). To make things even quicker, you can sign up with your Facebook or Google account.
Step 2: Verification
As we mentioned earlier, eToro operates within the guidelines of multiple regulators. Therefore, it will ask you to go through a verification process. You can upload a copy of your ID card, passport or driver’s license. And as proof of your residential address, you can upload a bank account statement or a recent utility bill.
Any withdrawals will be restricted until you complete this step. However, you can deposit up to $2,000 (about £1,700) without uploading an ID just yet.
Step 3: Deposit Funds
On eToro, you need to deposit at least $10 (about £8), and that’s really not a lot. You can make instant deposits via Visa, MasterCard, Paypal and Skrill. You can also opt for UK bank transfers, but you’ll have to wait a few days to process.
Regardless of what supported payment method you choose, eToro will charge you a small FX fee of 0.5%. Your GBP payment will be automatically converted to USD.
Step 4: Search for Crypto
To find crypto on eToro, you just need to enter the name of the crypto in the search bar. Once you see the digital currency you’re looking for, select the ‘Trade’ button. And to explore what digital assets are offered on the platform, click on the ‘Discover’ button followed by ‘Crypto’.
Step 5: Buy Crypto
Now you’re finally ready to buy crypto. To do so, let eToro know what amount of money you want to spend. You can invest any amount from $10 upward, regardless of the token’s current value.
When you’re ready to confirm and complete your order, click on the ‘Open Trade’ button.
Where to Store Cryptocurrency After Buying on an Exchange
Storing cryptocurrency after buying it is another common concern for beginners. After buying your preferred cryptocurrency, many platforms serve as wallets for storing cryptocurrency.
If you prefer to move your crypto off an exchange, there are a few ways you can store your cryptocurrency after purchase. You can either use a hot wallet, cold wallet or paper wallet.
Although cold and hot wallets work the same way, i.e. to store cryptocurrency, their main difference is internet access.
Hot wallets require internet connectivity and are mainly used on mobile phones or desktops. These types feature public and private keys, a combination of words or characters to secure your wallet.
Hot wallets are normally free, an advantage that makes them accessible to everyone. Additionally, hot wallets can store any type of cryptocurrency. However, due to their internet access, hot wallets are more vulnerable to cyber-attacks.
A cold wallet is a hardware device, like a physical leather wallet that you can hold and carry. Although not free, cold wallets guarantee a maximum level of security. It is much harder to hack as long as it is unplugged from a computer or mobile device.
The main disadvantage of cold wallets is their cost of purchase. Additionally, they are susceptible to physical damage because it is a physical hardware device.
Apart from those two common types of wallets, there are paper wallets. Paper wallets offer the advantages of cold wallets but for free.
Paper wallets are similar to cold wallets as they don’t require network connectivity. They involve printing private or public keys as a QR code that can be stored and scanned when needed.
Hopefully, our comprehensive guide has helped you choose the right crypto exchange for you. It’s important to opt for a platform that fits your investment goals and interests, but you should also pay attention to fees, regulation, supported coins and so on.
All things considered, we recommend using eToro, regardless of your level of experience. This FCA-regulated platform will allow you to get started with only approximately £8. It’s also very safe and user-friendly.
Crypto Exchange FAQs
Are UK crypto exchanges regulated?
There are no stringent regulations surrounding cryptocurrency and crypto exchange services in the UK. Although exchange services follow parameters set by the Financial Conduct Authority, there are no regulations for crypto exchanges in the UK. This is because cryptocurrency is viewed as a property that anyone can own.
What is the cheapest UK cryptocurrency exchange?
The cheapest crypto exchange in the UK depends on many factors that generally affect total costs like leverage, deposit method, fees and the type of crypto you wish to buy. Binance is a good option to start with. However, its complex user interface can be complicated for beginners to navigate and use. Another recommended option is eToro.
Do UK crypto exchange platforms offer leverage?
Leveraging is a normal offering from crypto exchanges. Some exchanges offer it, some exchanges don’t.
Is Binance better than Coinbase?
This is a subjective decision that totally depends on your goals and the preferred functionality you want. The only disadvantage of Binance can be its complex interface for beginners. However, Binance offers a wide range of functionality at a very low cost. In contrast, Coinbase is generally easier to navigate, especially for beginners. Therefore, your preference can also be influenced by your proficiency in trading.
Meanwhile, it is essential to know that you can start with Coinbase while learning to get the hang of Binance, then switch once you think you are proficient enough.
Which crypto exchange is the safest?
This is also another subjective question that depends on personal discretion. Crypto exchanges tend to provide the best service to their users, which builds a strong relationship between them. Therefore, users’ discretion regarding the best cryptocurrency exchanges is personal.
Although rare, this doesn’t mean cyber attacks and hacking do not happen to some. It is highly recommended to check out reviews and recommendations so you can have an idea of how secure and reliable your preferred crypto exchange is.