How to Buy Ethereum in The UK in 5 Simple Steps

The sections above have roughly explained what you need if you intend to buy or trade Ethereum in the UK. Given that cryptocurrencies are somewhat a technical subject, the part below will take you through the necessary steps you need to take to buy ETH successfully in the UK.

Step 1: Find an Appropriate Platform to Buy Ethereum

Just like any other purchase you might intend to make, the first step involves locating an appropriate platform where you can make your purchase. There are plenty of reputable brokers and exchanges that allow you to buy Ethereum in the UK. Exchanges allow you to access the actual asset and hold it for the long term or use the coins to settle transactions. As for brokers, they offer financial instruments attached to the asset known as CFDs. These instruments allow individuals to exploit the volatile price of ETH with leverage for higher returns.

Step 2: Registration / Create a New Account

After identifying a suitable platform, register an account by entering your email address/phone number and setting a strong password. Then you have to verify your account since most platforms have to abide by AML and KYC regulations. This involves uploading a photo of your ID/passport and taking a selfie. The platform may request a video call to confirm if it's you that appears on the document you just submitted. Also, to increase your trading or buying ability, you will have to verify your address by submitting a utility bill such as a bank statement that isn't more than 6 months old.

Step 3: Deposit Funds

Once everything checks out, you can proceed to fund your account. Most brokers have a stipulated minimum amount required for this process. The amount ranges from $100 to $250. As for exchanges, the amount you use to fund your account will depend on how much you intend to spend on buying ETH. Various platforms will support different modes to enable you to fund your account. Most of the common modes you are likely to see include using bank transfers, credit/debit cards and  third-party payment processors such as PayPal.

Step 4: Start Trading or Buying Ethereum

After funds reflect on your broker account, it's time to trade CFDs attached to ETH. Some brokers such as eToro will allow you to spot purchase ETH without leverage. Also, an exchange such as Binance will offer access to the actual asset and a chance to trade derivatives attached to various cryptocurrencies, including ETH. If you are completely new to this activity, ensure you use the demo account to learn how to set strategies and other educational materials on offer to better your skills before engaging in actual trading.

Step 5: Optional Steps

If you buy the actual asset on an exchange and your intention isn't transacting immediately with the coins, it's wise to move them to a safe hardware wallet where they are secure and out of reach from bad actors. Therefore, in case the exchange is breached, your funds are safe. Also, as a long-term investor, it's possible to stake ETH thanks to the coming of Ethereum 2.0. However, you will need at least 32 ETH to become a validator.

On the other hand, if you opt to trade derivatives attached to ETH using brokers, you are better off hedging your positions to minimise potential losses.

There are many ways to make your first purchase or fund your account in the UK. The mode you choose to go with will depend on your personal preferences, such as speed, security and fees to be incurred. Luckily, most payment modes are supported in the English nation. Below are some of the most common ones you can use to purchase ETH.

• Buy Ethereum with Cash – This is possible using a crypto ATM or peer-to-peer platform by meeting the seller. 

• Buy Ethereum with a Credit Card – This is the most popular option supported by many platforms. It's fast, but you are likely to incur higher fees.

• Buy Ethereum with Bank Transfer – Another popular option supported by various platforms. The fees are pretty low, but it's very slow, with transfers taking 3 to 5 business days. 

• Buy Ethereum with PayPal – Third-party payment options such as PayPal are also popular in the UK. This mode is relatively fast and convenient. 

• Buy Ethereum with Bitcoin – This has to be the most convenient of all the modes listed here since it involves direct swap or trading Bitcoin (BTC) for ETH. The catch is that you need to have BTC first before you can complete the transaction.

Why Buy Ethereum?

Launched six years ago, Ethereum has quickly established itself as one of the most important projects within the cryptocurrency space thanks to introducing smart contracts to the blockchain space. From the start, the platform aimed to become the go-to place for decentralised applications by allowing users from any corner of the earth to write and run software that is resistant to censorship, downtime and fraud.

Today Ethereum hosts over 90% of the DeFi activity, a market that has peaked in interest since mid-last year, fueling the recent crypto bull run. Increased activity on Ethereum has seen the network slow down with high fees incurred from transactions. Scalability has been a major issue for the network since it's designed as a Proof of Work protocol. But, the team behind this project has been busy trying to transition to Proof of Stake, which is less harmful to the environment and will allow more transactions to occur. Ethereum 2.0 has launched and is currently in the test phase, and with time the network should transition completely. This has inspired greater interest in the protocol and its token.

As an investment, ETH remains one of the most solid assets one can put their money on. As mentioned at the start of this guide, the coin has grown 4472x since it's all-time low recorded six years ago. 

As insane as these returns seem, as the project grows, the ROI will continue to increase. The good thing with crypto is that it's never too late to get involved with any project as long as it's solid and you can make money either by trading or holding the tokens for the long term. If you had entered the ETH market one year ago, today, your investment would have grown almost 10x, and this is despite the recent market crash that has seen ETH lose over half its value.

Ethereum 1 year chart. Source: Coinmarketcap

Is it Legal to Buy Ethereum in The UK?  

The UK has never officially endorsed cryptocurrencies as legal tender or outrightly banned them. The FCA has warned users to be careful though dealing with this new asset class due to the numerous scams surrounding them. That said, buying Ethereum and other cryptocurrencies is completely legal in the UK. One thing you need to be aware of is trading cryptocurrencies is likely to attract capital gains tax. Therefore, you need to keep clear records of your trades. Also, even though you are free to purchase digital assets in the UK, it's wise to use reputable platforms to minimise the chances of losing your funds by dealing with fraudulent platforms.

Where Can I Use Ethereum in The UK?

You are likely to struggle to find businesses that accept crypto coins, such as ETH in the UK, but there are a few cafes that will sell you coffee for the coin. One good example is Falkirk in Scotland. But this doesn't mean you can't spend your crypto as you like in the UK. If you find an individual or business that is okay with buying goods or paying for services using ETH, feel free to go for it. Also, you can sell your ETH using ATMs or other platforms for fiat and spend the money as you wish. ETH boosts excellent liquidity, and it's supported on almost every crypto platform, so this conversion process should be pretty straightforward. Over 174 Bitcoin ATMs in the UK are scattered in various cities such as London 99, Birmingham 23, Manchester 12, Cardiff 6, and many others.