How to Invest in Bitcoin

Some people choose to take their holdings offline and store it in a physical device called a cold wallet, otherwise known as a hardware wallet or cold storage that is similar to a USB stick. While this protects from online attacks you risk losing your holdings for other reasons. This is different to company stocks where the share price will generally move depending on how the business is performing. It is hailed by fans as a market-disrupting liberation and demonised by many personal finance experts as a dangerous creation. The collapse of the FTX exchange also triggered a crypto crash and many thought there was no way back for cryptocurrency. With the worst of this saga now behind investors, some may have a renewed sense of confidence.

How do I start investing in Bitcoin?

  1. Join a Bitcoin Exchange.
  2. Get a Bitcoin Wallet.
  3. Connect Your Wallet to a Bank Account.
  4. Place Your Bitcoin Order.
  5. Manage Your Bitcoin Investments.

The platform may ask you to submit a copy of your driver’s licence or passport, and you may even be asked to upload a selfie to prove your appearance matches the documents you submit. To buy cryptocurrency, first you need to pick a broker or a crypto exchange. While either lets you buy crypto, there are key differences between them to keep in mind. Further, cryptocurrency trading is largely unregulated in the UK, and if something goes wrong – for example, a company goes out of business – you will have no recourse to compensation.

Step 3: Make a Deposit

The current ‘crypto winter’ has seen the price of Bitcoin fall from it’s all-time high of £69,000 in November 2021, to below £19,000 in July 2022. Additionally, some companies may see bitcoin as a way to diversify their investment portfolio and take advantage of potential gains in the cryptocurrency market. In fact, many companies have started investing in bitcoin as a hedge against inflation and to diversify their investment portfolios.

From $16,000 on 1 January, it has risen 70% to $27,347 so far this year. Last month, the BTC price even exceeded $30,000 on hopes that the Fed’s hiking cycle was nearing completion and that inflation was calming down. As the value of investments can fall as well as rise, remember that these protections will not cover you just because your investment performs badly.


As of September 2020, Binance also has the binance Smart Chain – a highly advanced platform that has proven a hit with DeFi developers looking for seamless access to the Binance Exchange. BSC is probably the biggest rival to Etheruem when it comes to attracting DeFi to its platform, hosting several projects, including Venus, PancakeSwap and Linear Finance. Additionally, Binance operates the largest crypto-focused insurance fund – currently exceeding $1 Billion.

How to Invest in Bitcoin

A cryptocurrency exchange is a service for people to buy or sell their cryptocurrency. Bitcoin is one of thousands of cryptocurrencies (also referred to as ‘digital’ or ‘virtual’ currency) that aren’t controlled by any country, treasury or central bank. Distributed means that because no single party is in control of the ledger, someone else – or a community – has to verify transactions on the ledger. What this means in practice is that a network of computers contributes their computing power to the network to verify the transactions that occur on that network. They are incentivized to do so by the code that is built into this blockchain technology. It says that if you successfully verify a block of transactions on the network, then you’ll be rewarded with a digital asset.


But in addition to security, there are a few more reasons why you should consider buying and selling cryptocurrencies via Kraken. For example, the exchange appeals to both beginner and expert traders. This starts with a straightforward account registration process, a highly intuitive user interface, and affordable minimum deposit/trade limits – as low as $20.

  • Decentralized means that no single party is in charge of the ledger.
  • With that said, FCA-regulated trading platform eToro not only supports Paypal deposits and withdrawals but Skrill and Neteller too.
  • However, Dogecoin’s quirky branding and lighthearted approach have not only allowet it to foster a notoriously loyal fanbase, but also seen become amongst the ten biggest cryptocurrencies of 2021.
  • A public key acts like an email address and can be shared with others in order to facilitate receiving Bitcoin.
  • You are probably aware of Cameron and Tyler Winklevoss, who are reputed to be the world’s first bitcoin billionaires with over 100,000 coins.

As the popularity of digital currency increases, so does the regulation – making it more institutionalized and bringing it to the forefront of consumer minds. For some investors, the excitement of being involved in groundbreaking blockchain technology is enough of a draw. Since the start of 2021, bitcoin was at its lowest on 22 November 2022, when the BTC price was $15,711.

New labels to make it easier to pick sustainable investments

All cryptocurrencies carry similar risks and should only be invested in if you have the financial capacity to lose whatever you decide to buy. While Bitcoin is the most recognised cryptocurrency, there are a number of other digital currencies available. They exist in in physical form, usually paper or plastic and include a printed version of your public and private keys. If you lose your paper wallet however, you lose your entire Bitcoin investment.

How to Invest in Bitcoin

Also, Bitcoin is unregulated in the UK, which means you have no insurance against complete loss of funds. If you’re looking for one of the best crypto exchanges in the UK to support your trading on the go, then look no further than Luno. Luno make it possible to use your cryptocurrencies in the real world by facilitating the conversion of your crypto into your local currency at any time so you can spend it. A lot of other crypto exchanges in the UK will not offer the on-exchange option to convert to fiat currencies. Cryptocurrencies are an unpredictable asset class and nobody really knows just how high the price of bitcoin could go. But with the prices so high and governments looking at how best to go about regulating these coins, the risk of investing in bitcoin are very high.