How to buy cryptocurrencies
Like it or not, many investors are choosing to add cryptocurrency to their portfolios.
If you’re comfortable with the risks at hand, you can purchase Bitcoin and other cryptocurrencies either from specialist online exchanges, or directly from other people via marketplaces.
Among the UK cryptocurrency exchanges are Coinbase, Robinhood, Gemini and eToro. These exchanges make it easy to buy and sell Bitcoin and other cryptocurrencies from your smartphone, tablet or computer.
Platforms either charge a percentage of a trade or a fixed fee, though some offer free trades. There might also be a subscription option where you pay a regular sum and trades are free.
For example, at eToro you’ll pay 1pc for buying and selling Bitcoin, but at Robinhood there’s no fee. There might also be an account minimum so make sure you check the terms. If there is a minimum, it tends to be low, at around $10.
Some exchanges offer free crypto when you open an account, but don’t let that sway you. Make sure you are clear about the terms and charges rather than just eyeing the freebies. Plus, some of the offers only apply if you’re based in America anyway.
You’ll need to add funds to your account before you’re able to start trading. You can usually pay for the currency by credit or debit card, or bank transfer.
Your Bitcoin – or other cryptocurrency of choice – can be stored in a digital wallet on the platform. You can also transfer it onto your hard drive.
Be careful when you research how to buy your Bitcoin. There are plenty of fraudsters setting up as dealers ready to take your money. Don’t invest in a company you’ve spotted advertising on, say, some forms of social media – which is rife with crypto scam adverts.
The financial watchdog, the Financial Conduct Authority (FCA), keeps a list of unregistered crypto asset businesses, so it’s also worth checking to see if a company appears here before you hand over any money.
Other ways to invest in crypto
Investors can find other ways of getting exposure to Bitcoin – such as by investing in companies with crypto holdings.
AJ Bell investors have been buying up shares in MicroStrategy lately, an American firm which describes itself as a business intelligence company. MicroStrategy is thought to be the largest publicly listed holder of Bitcoin in the world, holding around 193,000 Bitcoins, according to AJ Bell.
