All the Bitcoin news and information you need.
Bitcoin Daily is delivered to your inbox each morning, we find the top 3 stories and offer our expert analysis. Not convinced? Check out our latest newsletter.
Bitcoin in the UK: Live GBP Price, Best Exchanges, Taxes, and History
In general, the United Kingdom has had a relatively friendly relationship with Bitcoin and other cryptocurrencies. With easy ways to invest, it remains relatively simple for newcomers to the cryptocurrency market to buy some BTC. In fact, the United Kingdom has become one of the leading destinations for cryptocurrency companies with many major exchanges like Gemini and Coinbase having offices in the country.
However, there have been recent concerns by regulatory bodies like the Financial Conduct Authority (FCA) which have taken efforts to stop Bitcoin-related financial derivatives. For everyday investors looking to just buy and HODL, though, this should not be an issue. Overall, the United Kingdom will remain a cryptocurrency-friendly place and purchasing digital assets is quite easy.
Is Bitcoin Legal in the United Kingdom?
As of now, Bitcoin is entirely legal to own and mine in the country. Transactions are not monitored and there are no licenses needed to mine any cryptocurrency. It is treated as a ‘foreign currency’ under the law since at least 2017. However, the FCA is considering banning cryptocurrency-related derivative products since they are too speculative. This ban is still under consideration.
How to Buy and Sell Bitcoin in the United Kingdom
In the United Kingdom, you have multiple ways of buying and selling Bitcoin. However, if you prefer, you can also purchase BTC through an ATM or via an in-person exchange through various marketplaces. Many of the major exchanges offer BTC trading in British pounds as well so there is no need to convert your fiat to another currency.
Top Bitcoin exchanges in the UK
Coinbase remains the best option for beginners looking to purchase some BTC. This is because it involves just the click of a button and no knowledge of actual ‘trading.’ Instead, you are essentially buying BTC from Coinbase’s own custodial reserves without any price slippage. Bear in mind, though, that buying instantly with your debit card will cost you a fee of around 3%. For more seasoned traders, Coinbase Pro offers a full orderbook with many more trading pairs available.
Overall, Coinbase UK boasts the most liquidity when it comes to GBP/BTC market. So, it remains the best option for those residing in the UK.
CEX.io has been based and operating in the United Kingdom for a long time. Despite low fees and having a reputation that goes back years, you will have to wait to get your buy orders filled due to low liquidity. The exchange offers trading pairs in GDP for Bitcoin and other major altcoins. If you are looking for an alternative to Coinbase, then CEX.io is worth trying.
Bittylicious is a Bitcoin exchange based in the United Kingdom which allows for instant purchases of BTC with a debit/credit card, bank transfer, and other payment options. It is known for its ease-of-use, but most users still opt for Coinbase UK instead.
Two worthwhile options aside from exchanges exist in the United Kingdom: LocalBitcoins and Bitcoin ATMs. LocalBitcoins allows you to do over-the-counter trades with individuals. Bear in mind, this could come with some added fees since Bitcoin’s price tends to fluctuate quite a bit.
Bitcoin ATMs are also expanding in the United Kingdom and are a convenient way to purchase BTC. In London alone, there are around 167 Bitcoin ATMs in and around the city. However, it is much preferred you use Coinbase UK or another exchange considering that ATMs tend to have much higher fees.
The United Kingdom’s Tax Rules on Bitcoin Profits
The UK taxes Bitcoin as either capital gains tax or as income tax. This is subject to the taxpayer’s level of income. Selling any crypto-asset for money, trading one crypto-asset for another, using it to pay for goods and services, and gifting it to another person are all taxed at a rate of around 10 or 20%, depending on your income. Buying Bitcoin and holding it is not taxed, of course.
If you are mining cryptocurrency, receiving it as pay, or acquiring tokens through airdrops, then this is taxes as part of your income tax (IT). IT can range from 20% to 45%, depending on which bracket you fall into.
These guidelines were established in 2017 and have not changed since then. In general, investors should think of crypto-assets like ‘shares’ or ‘assets,’ since most of the time they are taxed the same way in the United Kingdom.
Where to Spend Bitcoin in the United Kingdom
If you are living in London, you’re in luck: it is, by far, the best place to spend Bitcoin in the entire United Kingdom. Some pubs, shops, cafes, and other establishments accept BTC. If curious, you can easily search for locations on WhereToSpendBitcoin. There you’ll find a wide variety of everyday stores that accept Bitcoin, from iTech Repair, a local repair shop, to Hudson Pipes, a store specializing in smoking pipes in Wales.
Some big chains which deliver and operate in the United Kingdom also accept BTC as payment. For example, Overstock.com has been accepting Bitcoin for some time on all its products. NewEgg is another online retailer that delivers to the UK and accepts BTC. Even airline companies like airBaltic have begun accepting BTC for their cheapest plane seats.
Overall, if you are looking to spend Bitcoin, you’re going to find it much easier online. However, be sure to look at the various maps and databases on the many locations you can spend BTC in the UK’s metropolitan areas.
History of Bitcoin in the UK
It wasn’t long ago when the United Kingdom was being considered a Bitcoin paradise. The island was showing all the signs of becoming the global hub for the Bitcoin industry.
In 2015, British Prime Minister’s Office went a step further and made an effort to promote Bitcoin industry overseas. The nation has been proactively supporting the digital currency industry.
Unfortunately, things have changed over the past years. While the government is still supporting blockchain technology, they are not so keen on Bitcoin anymore. Banks are no longer listening to Bitcoin startups in the United Kingdom.
This has undermined Bitcoin’s progress in the country and driven cryptocurrency entrepreneurs out of the banking system.
Cryptopay, a bitcoin brokerage, recently informed customers that it will no longer support British Pound deposits and withdrawals on account of new bank policies.
British customers are limited to Single Euro Payments Area (SEPA) at Cryptopay due to the cancellation of GBP deposit and withdrawal facilities.
Many U.K. brokerages and Bitcoin exchanges have suffered over past years as banks have started withdrawing their support for Bitcoin.
Britcoin for instance, rebranded as Intersango, faced problems with U.K. bank transfers before eventually closing. In 2014, Bit121 had a promising start, but banks withdrew their support and the exchange closed.
Such incidents have increased as Bitcoin keeps getting more popular in the country.
CoinJournal, a Bitcoin publication, saw its banking services come to an abrupt end after its U.K. banking provider Barclays terminated its business account. CoinJournal received no official warnings prior to its account closure.
As per CoinJournal, the decision taken by Barclays to close its business account was an “automated” call, after seeing a pattern of banking transactions involving prominent Bitcoin exchange and service provider Circle.