Key Highlights :
1. Cryptocurrencies are digital-only forms of financial exchange that use cryptography as a means of security.
2. They divide opinion and are not for everyone. For example, the UK’s financial watchdog, the Financial Conduct Authority (FCA), issues regular warnings to consumers about the crypto industry, telling would-be investors that cryptoassets are unregulated, high-risk entities that offer little in the way of financial protection to consumers if things go wrong.
3. Last year, the cryptocurrency exchange, FTX, collapsed and its founder was arrested. The ensuing scandal has accelerated the call for more regulation in the sector.
4. Despite events like these and warnings from regulators, more than two million adults hold cryptoassets in the UK - on average, a holding of a few hundred pounds per person.
5. If you’re new to the world of crypto, understand the potential risk of loss, but still want to get involved, it can be tricky working out how to buy cryptocurrencies. Follow these steps to help get started: in the same way you’d visit a bureau de change to swap pounds sterling for euros, if you want to buy cryptocurrencies you first need to choose either a broker or a .
6. Both enable you to buy crypto, but differences exist with each option:
- Buy and sell 70+ cryptoassets on a secure, easy-to-use platform
- Cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply.
7. This is an online platform where buyers and sellers meet to trade cryptocurrencies, paying fees to the exchange for facilitating the process. They often feature more complex interfaces enabling various types of trade and also offer tools such as advanced performance charts.
8. Well-known cryptocurrency exchanges include Coinbase, Binance and .
9. If you don’t have a background in buying stocks and shares, the standard trading interfaces offered by some cryptocurrency exchanges can be a little overwhelming for beginners. That said, the same providers may also offer more user-friendly, easy-purchase options.
10. Convenience, however, usually comes at a cost. If you opt for a beginner-friendly version, expect to be charged more for buying crypto compared with using an exchange’s standard trading facility.
11. If you’re a UK investor new to crypto, it’s worth making sure that your preferred exchange or brokerage of choice allows ‘fiat’ currency transfers and purchases made with sterling.
12. A fiat currency is a government-issued currency, such as sterling or dollars, that is not backed by a physical commodity (such as gold), but backed by the government in question. This is worth checking because some exchanges only allow customers to buy cryptocurrency using another crypto. This means you’d have to find a separate exchange to buy the tokens
Cryptocurrencies are a digital-only form of financial exchange that uses cryptography as a means of security. Cryptocurrencies first emerged in 2009 with the launch of Bitcoin. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Cryptocurrencies are also anonymous, meaning users’ identities are not publicly known. Cryptocurrencies are often traded on decentralized exchanges and can also be used to purchase goods and services.
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