Best Crypto Exchanges In The UK (March 2024)
‘Crypto’ or Cryptocurrency investing has been on the rise for a while now, and it seems to be here to stay. Investors are finding the best routes to start their crypto portfolio, and discovering the pros and cons of each crypto exchange in the UK.
Getting online and randomly choosing an exchange can be tempting. But, there is a good amount of research each investor should complete before buying their first coin. A good place to start is learning the true definition of cryptocurrency and what a crypto exchange truly is – before we reveal the best crypto exchange in the UK in 2024.
What is Crypto or Cryptocurrency?
If you’re still unsure about what exactly cryptocurrency is, why it’s popular right now, and how a crypto “exchange” fits into all this. Here’s a brief introduction to crypto and crypto trading:
Cryptocurrency is a highly encrypted form of digital currency that isn’t controlled by any centralised system or government.
First of all, what makes this form of payment so unique is cryptography. Or, the encrypting of a certain item into code, involved in its creation. This means that it is highly unlikely that anyone could replicate your crypto coins. So, the first defining feature of crypto is its security made possible through encryption.
Are cryptocurrencies regulated?
The other defining feature that sets cryptocurrency apart from other investments and currencies is the decentralisation of this investment. It’s not currently regulated by any government. Meaning it can’t be manipulated and changed to fit the needs of anyone country’s economic situation. Investors believe that this excludes crypto from being corrupted by local governments.
How Does a Crypto Exchange Work?
Typically, once investors understand how unique and groundbreaking crypto is, they want to get in on the action. Not only is crypto a currency, but it is also a form of investment available for investors to buy and trade. Where can an investor start to build their crypto holdings? For the everyday person, a cryptocurrency exchange is the best place to start.
A crypto exchange works by allowing investors to purchase, trade, and sell their crypto on a daily basis. It’s an internet-hosted site that allows users to do all this from their computer or phone. Most crypto exchanges allow many forms of currencies to be used for funding crypto purchases, providing inclusivity for global participation. They also typically provide investors with the option to purchase portions of a crypto coin. Allowing crypto investing to be accessible to the everyday investor.
Compare The Best Crypto Exchanges in the UK ?
Best Crypto Exchange platforms in the UK
Even with this helpful inclusivity, several crypto exchanges tend to cater more to specific parts of the world than others. Due to languages of origin, currencies accepted, and each investor’s preference, each exchange will cater to a separate demographic. It’s good to consider where the exchange was founded, who started it up, and who it’s geared towards.
As a UK-based investor, you might wonder which exchanges are most convenient for your locality. One of the most important choices you’ll make as a crypto investor is where you purchase your crypto. this can be an incredibly overwhelming choice with all the options currently available.
Which crypto exchange is going to be right for your situation? Read on to find out the top 3 crypto exchanges for the modern investor in the UK.
1. eToro – Best crypto exchange for experienced traders in the UK
eToro is an Israeli founded crypto exchange that is meant for crypto fanatics. If you’ve been trading crypto for a while and want to have access to an incredible interface that provides advanced features and low fees, this exchange is for you.
Pros:
- eToro boasts a zero-commission fee structure to encourage anyone and everyone to invest in crypto. No broker fees here!
- Investors can fund their accounts with Paypal or Credit Cards. No need to link a bank. This provides instantaneous and convenient deposits.
- eToro offers users investments other than just crypto, if you’re interested in using the platform as a centralised place to hold your larger investment portfolio.
- “CopyTrade” is a feature available, meaning investors can “copy” the trades of successful investors they trust by selecting CopyTrade on the app.
- eToro’s platform holds 35+ crypto options for users
Cons:
- eToro operates solely under USD, so there will be a conversion fee when exchanging your funds back and forth to GBP. This is the biggest drawback when it comes to eToro for UK investors.
FYI: eToro also holds licenses with the Financial Industry Regulatory Authority (FINRA).
2. Coinbase – Best Crypto Exhchange for Beginner Traders in the UK
Coinbase is a US-based crypto exchange that has recently risen to huge popularity. It boasts an easy-to-use app and a plethora of crypto choices for investors.
Pros:
- Great for beginners
- Offers passive investing options with automatic investments for users
- Coinbase offers “staking” with some of its coins.
What is staking? It’s a way for investors to get rewards on their crypto by just holding them. Think of staking like earning interest on money in your bank account, but for crypto. - Coinbase also offers a card that investors can use as crypto payment. It’s a global currency, after all!
- Coinbase boasts 150+ options for crypto purchases
Cons:
- Coinbase has a complicated fee structure for buying and selling, and the fees are tough to predict
- Their customer service reputation isn’t great, and users complain that issues aren’t typically resolved quickly and easily
FYI: It also holds licenses with the Financial Industry Regulatory Authority (FINRA).
A full review from 2021 is also available here: Coinbase Review (UK) – Still The Best Crypto Exchange?
3. Kraken – Best Crypto Exchange Platform for beginners (without the crypto wallet)
Kraken is another tried and true US-based crypto exchange that’s been around since 2011. It’s primarily geared towards beginners but offers several account types to cater to investors of different experience levels.
Pros:
- Trading fees on Kraken are low compared to other crypto exchanges
- Offers FPS/BACS for UK customers
- Users can choose from 3 different account types based on their experience and comfortability trading crypto
- Kraken is known for its user-friendly features that prove helpful for beginners
- Staking is also available with this crypto exchange
- Kraken offers 69+ crypto coins
Cons:
- Currently, Kraken does not offer users the option for funding their account with a credit card or Paypal
What are the risks of cryptocurrency?
Before you start regularly trading on one of these crypto exchanges, it’s important to understand the risks, fees, and safeguards involved. Here are some key pieces of knowledge to explore before you dive into crypto trading:
Tax on Cryptocurrency in the UK
Currently, there are taxes owed when UK citizens sell their crypto in certain scenarios. If you’ve made capital gains over £12,300 on your crypto investments, then you’ll have to pay taxes on these gains. Before you put in trades to make quick money, remember this tax.
yourMoney has actually written a full guide on Tax on Cryptocurrency in the UK here: How Do Crypto Taxes Work in the UK? (A Simple Guide)
What to Know About Investing in Crypto Exchanges and are cryptocurrencies safe?
Cryptocurrency definitely provides a high level of security in that the coins themselves are highly encrypted, but because of the fairly new system for crypto transactions, there are still safety risks involved when you invest in crypto.
Each of these exchanges best for a UK investor will also involve some form of risk for your money. Several safety risks to consider include:
- Web-based glitches within the exchanges – each exchange is hosted entirely online, and with this virtual aspect of trading, the entire exchange might have issues or glitches during the crypto market’s 24/7 trading hours. If an app goes down, there’s not much the exchange can do to help investors who couldn’t put in a trade.
- Customer service issues – each exchange hosts different customer service features, but not all are created equal. Be sure to pick an exchange that boasts highly responsive and helpful customer service teams, for times when you have issues or questions with the exchange.
- Irreversible transactions – also due to the relative newness of crypto is the risk of the irreversibility of each transaction. As helpful as a customer service team could be, if you complete a trade-in error, or a hacker drains your account, the current crypto market makes these transactions unable to be reversed. This might change in the future with advances in crypto technology, but it’s the reality for now.
- Less valuable coins on the market – some coins can lose most or all of their value over time, and if you chose to invest in them, you might never see any of your original investment return. This is why researching each coin you invest in is so key to success with crypto investing.
How do I research crypto before I buy it?
Speaking of researching, there are several best practices when it comes to vetting crypto before you invest. Make sure to examine these aspects of a coin before you put your hard-earned money into a new coin:
- How it was created – check out news articles, websites, and even social media to try to source the inception of the coin and the company or individual involved in its creation.
- When it was created – is this a newer coin? Perhaps there isn’t much information out there about its details. This creates more risk for investors, so the timeline of a coin’s creation can be crucial to find out more before you buy a new coin.
- What do seasoned investors think about its future – this is maybe the most important part of the vetting process. Find reviews from investors you trust and see if they have confidence in the future of the coin in question.
What are the benefits of cryptocurrency?
Even with these risks involved in purchasing crypto, there are certainly many benefits.
- Diversified investments
This benefit to crypto cannot be stressed enough. There are many investment options out there right now, but crypto is newer, full of future possibilities, and a great way to diversify your investment holdings. Traditional investments might not continue to prove lucrative for investors, but the future of crypto seems promising!
- Offset fluctuations of pounds
For anyone in the world, crypto can assist with offsetting a country’s currency fluctuations. Whether a pound, dollar or euro, each government regulated currency can be manipulated by the government and driven by supply and demand. Crypto lives outside these boundaries, only affected by its own market conditions. If you’re worried about the fluctuations in value of the pound, crypto is a good investment to offset these ebbs and flows.
- Opportunity for growth and innovation
Again, with the newness of crypto comes a future full of possibilities. Investors are living through history as they watch new coins hit the market and trust builds around crypto’s future. Your crypto investment now could be the start of a huge payoff later.
FAQs
Even with all these risks, benefits, and explorations of different crypto exchanges, you might still have questions about crypto. Here are a few FAQs investors commonly research as they explore the world of crypto investing:
How Much Money Do You Need to Buy Crypto?
The minimum requirement for each crypto investment varies from exchange to exchange, so this number will depend on the exchange you use for your investments. Typically, this number is anywhere from £2-£35.
A good rule of thumb for crypto investing involves investing only what you can afford to lose. Because of the riskier nature of cryptocurrency, investing your entire savings account or going into debt to invest in crypto isn’t typically advised. As an educated investor, it is key to decide on your investing goals, and what you can afford to lose before you jump into a new investment.
How Do I Open a Crypto Exchange platform Account?
Typically, the process to open your very own crypto exchange account will look something like this:
- You’ll enter your personal information and verify your identity. This might include uploading a form of identification, verifying your email, or downloading a verification app. Each exchange handles verification a bit differently.
- You’ll fund your account. This step also varies from exchange to exchange, but you will have a few options to move funds into your crypto account. These range anywhere from online payments such as Paypal or a credit card, to linking your bank account and waiting for deposited funds to arrive, to moving your investments from another crypto exchange over to your new account.
How do I buy and trade cryptocurrency?
After you go through this process of opening and funding your crypto exchange account, you’ll have the chance to buy crypto. Check out the current prices of each coin, and do your research with the steps we mentioned before. Next, you can put in a purchase for the coin, or part of a coin, depending on how much you’d like to invest. Some exchanges have minimums to the amount you’ll need to put into any one investment, and this can actually help you in the long run if they charge fees to purchase each coin.
As far as trading crypto, if you come to a point where you feel you’d like to part with your coins, or sell a portion of your holdings in any one crypto, you can put in a trade order for that crypto. Typically, each exchange has an easy to find “sell” function where you can select if you’d like to invest in an alternate form of crypto, or sell your asset to receive back your original form of payment. Keep in mind that these fees vary from transaction to transaction, so check out how much money your investment will actually make after the fees have been collected.
Are cryptocurrencies regulated?
At the time of this article, cryptocurrency transactions (when used to purchase items or services) are not regulated by any governments, but they are also not accepted as currency by all governments, and some governments require reporting of gains if crypto is invested in and sold. As aforementioned, the UK does currently require investors to report and pay taxes on their gains from crypto as an investment.
In short, cryptocurrency is not currently regulated in the UK or elsewhere.
Is cryptocurrency legal?
Crypto as an investment is currently legal for investors everywhere since it’s not regulated by any one country’s government, but crypto as a currency is currently banned in some countries.
Can the government track your cryptocurrency?
Right now, investors are wondering if governments are tracking cryptocurrencies. Are they being watched? Will there be more regulation in the future? No one knows for sure what the future holds, but it’s best to realise that although the coins themselves are highly secure, crypto transactions can be tracked.
Since crypto transactions are stored in a blockchain, meaning a sort of ledger that records each buy and sell, any government could track cryptocurrency movements. And, as mentioned before, some governments such as the UK and US do tax earnings on crypto sales.
Is crypto real money?
The short answer here is: yes. Cryptocurrency is a true currency that can be exchanged for goods and services around the world. The acceptance of this currency is slowly growing across the globe, and it can be a great way to buy and sell international goods without currency exchange. Here lies one of the main benefits involved in the future of crypto: the globalisation of an entire currency.
What is the best crypto exchange app/platform in the UK?
With all the excitement surrounding cryptocurrencies, and the information available to learn more about how to successfully buy and sell crypto, it’s no wonder crypto exchange apps are on the rise. When choosing the best crypto exchange platform for you, it’s best to consider your current expertise surrounding crypto, your investing goals, and what you’re looking for in an exchange. Whether you choose eToro, Coinbase, or Kraken, the future of your crypto investing career is full of opportunities. There are other apps and platforms that yourMoney has reviewed including both Luno and Binance – feel free to check these out below ?
- Luno Review UK (Most User-Friendly Crypto Exchange?)
- Binance Review (UK): Still Worth It For UK Users?
