Cryptocurrency Trading UK: What You Need to Know

While Bitcoin and other cryptocurrencies have been around for years already, many traders in Europe have only recently started seeing them as viable trading assets. Now crypto is a widely known instrument that can prove to be extremely profitable, if you know how to trade it. This article is dedicated to explaining the basics of crypto trading for traders from the UK.

About crypto trading

Even if you are new to the market, you’ve probably heard of the concept. Basically, a cryptocurrency is a digital currency based on elaborate cryptography algorithms. It is a peer-to-peer system that allows you to make transactions without any centralized supervisor like a bank or government. But it’s exactly this independence that makes most of the financial institutions in the world frown upon crypto — sometimes even to the point of proclaiming it illegal.

Crypto legality

Cryptocurrencies are relatively new assets, and there are still no cryptocurrency trading UK laws. They are not regulated by any authorities, and while that means you can trade them freely, you will also be completely on your own if anything unfortunate happens to your funds. And it doesn’t take much to fall victim of a fraud or cyber-attack. There is also no special crypto tax yet, but crypto traders are still supposed to declare their earnings and pay income or capital gains taxes.

Profitability

If cryptocurrencies like Bitcoin or Ethereum are not regulated and considered very risky, why the market is growing so rapidly? The answer is obvious: crypto may be extremely profitable, and traders may employ various strategies to earn. Day trading is an optimal starting point for most beginners: cryptocurrencies are very volatile, and you can earn by buying low and selling high many times a day. Just pay attention to fees — they can be extreme in some cases.

Brokerage services

While you may use any regular broker to buy and sell crypto, they tend to have a rather limited range of available instruments that includes only several major currencies. Instead, you should try using specialized crypto exchanges. There are plenty of them available to traders from the United Kingdom. Good places to start would be Coinbase that’s been around for a decade and Binance, known for its low fees and a wide array of currencies to choose from. While some platforms for crypto exchange such as Gemini and ATAIX might support fewer cryptocurrencies than many competitor exchanges do, they have strong security framework and reduced potential for fraud.