Cryptocurrency & Bitcoin:
What You Need to Know
What Is Bitcoin and Cryptocurrency?
Bitcoin is the first and most recognised cryptocurrency.
It’s a form of digital money that operates on a technology called blockchain, which allows transactions to take place directly between people without banks or intermediaries.
Since Bitcoin launched in 2009, thousands of other cryptocurrencies have appeared (known as altcoins), each with different features and purposes. Some aim to improve transaction speed, others support smart contracts, gaming, or decentralised finance (DeFi).
However, unlike traditional savings or investments, crypto values can change dramatically in a short time which means both high potential reward and high risk.
How Cryptocurrencies Work
Blockchain Technology
Every transaction is recorded on a public digital ledger called the blockchain.
Mining and Validation
Some cryptocurrencies are created through mining, where computers solve complex puzzles to verify transactions.
Wallets
To store crypto, you need a digital wallet (either online or offline).
Exchanges
These are the platforms where you buy, sell, and trade cryptocurrencies.
Popular Crypto Exchange Platforms
If you’re considering buying crypto, it’s important to choose a trusted and regulated platform.
Here are some of the most reputable options available to UK users:
Coinbase
Ideal for beginners, Coinbase offers a user-friendly interface and a wide range of cryptocurrencies.
eToro
Known for its social trading features, eToro allows users to copy trades from experienced investors.
Kraken
A highly regulated platform, Kraken provides advanced trading features and strong security measures.
Binance
Offers low trading fees and a vast selection of cryptocurrencies, making it suitable for more experienced traders.
Gemini
Renowned for its secure platform and regulatory compliance, Gemini is a solid choice for those prioritizing safety.
Getting Started
Choose a Reputable Platform
Pick one from the list above or research others regulated in the UK.
Create an Account
Verify your identity and set up two-factor authentication for security.
Deposit Funds
Transfer GBP or another supported currency.
Select a Cryptocurrency
Choose Bitcoin or another crypto you’d like to invest in.
Make Your Purchase
Execute your trade and decide whether to store your crypto on the exchange or in a personal wallet.
Understanding the Risks
Before investing, it’s essential to understand the downsides:
Volatility
Crypto prices can rise or fall dramatically within hours.
Security Risks
Exchanges and wallets have been targets for hacks in the past.
Regulatory Changes
Governments can change how crypto is taxed or regulated.
Scams & Fraud
Fake platforms and “get-rich-quick” schemes are common.
No Protection
Crypto investments are not covered by the Financial Services Compensation Scheme (FSCS).
Always do your own research and only invest money you can afford to lose.
Bitcoin as a Long-Term Investment
While crypto is often associated with fast trading and speculation, Bitcoin is increasingly viewed as a long-term store of value.
Why Some Investors Hold Bitcoin Long-Term:
Limited Supply Only 21 million Bitcoins will ever exist, creating scarcity.
Increasing Adoption Businesses, institutions, and investors are recognising Bitcoin as an asset.
Inflation Hedge (Debated) Some investors see it as protection against currency devaluation.
The “HODL” Strategy:
Instead of timing short-term market swings, some investors buy and hold for years, believing the long-term trend will be upward.
Tips for Safer Investing:
Never invest more than you can afford to lose.
Use reputable platforms and enable security measures.
Consider “cold storage” (offline wallets) for higher security.
Diversify: don’t rely solely on crypto. Include lower-risk assets like savings, bonds, or index funds.
Many experts recommend keeping crypto below 1–2% of your overall investment portfolio.
Crypto and Bitcoin can offer exciting opportunities but come with significant risk. Approach them as part of a broader financial plan not a shortcut to wealth.
For most people, the goal should be to build stable finances first (budgeting, saving, investing in proven assets) before exploring high-risk options like crypto.
important Disclaimer
We have no affiliation or partnership with any of the cryptocurrency platforms or exchanges mentioned on this page. This content is for general information and education only and should not be taken as financial advice.
Cryptocurrency investing is high risk. Prices can be extremely volatile, and you could lose some or all of your money. Always do your own research and consider speaking with a qualified financial adviser before investing.
