Bitcoin (BTC) needs no introduction among crypto traders and investors. It is the world’s largest cryptocurrency by market capitalisation and trading volume. However, what you probably didn’t know is how really popular Bitcoin is among British investors.
According to reports, 11% of Britons (equivalent to 5.6 million adults) had invested in crypto as of 2024. Interestingly, about 47%, or nearly half of the number, invested in Bitcoin rather than other assets. That means both retail and institutional investors in the UK consider BTC a viable investment option. This guide explains why Brits fancy Bitcoin over its competitors.
Why is Bitcoin Popular in the UK?
As stated above, BTC is the most popular coin in the UK. Despite the country’s growing crypto adoption, the few who invest in cryptocurrencies stick with BTC over Ethereum (with 33% of investors) and Dogecoin (with 21% of investors). Below are the reasons nearly half of the British investors have Bitcoin as their top crypto investment.
Increased Attraction of Bitcoin Gambling
Online gambling has taken a new turn due to the adoption of Bitcoin in the iGaming space. Today, online casinos and sportsbooks accept cryptocurrency deposits and withdrawals, making it possible for players to wager on their favourite games using Bitcoin and other assets.
Moreover, these crypto casinos facilitate fast, secure, and convenient payments, making them more desirable to the average Brit gambler than regular casinos that accept conventional payment methods.
Global Status in the Crypto Market
Bitcoin was the first cryptocurrency created. Since it began trading in 2009, it has paved the way for altcoins like Ethereum, Solana, Ripple, etc. Due to its popularity and demand among investors globally, there has been an increased interest in the coin among retail investors.
Moreover, the increasing institutional investments in Bitcoin have made it more scarce and increased its demand. For instance, MicroStrategy owns 214,246 BTC tokens as of May 2024, which is about 1% of all Bitcoins in circulation.
Popularity of Crypto Payments
Another reason for the growing popularity of Bitcoin among UK investors is its broader adoption as a means of payment. More merchants and businesses are accepting crypto payments for goods and services, and BTC also dominates that space.
For instance, you can pay for a cup of coffee or a game ticket with Bitcoin, provided the service providers support crypto payments. As more businesses include BTC in their checkout options on mobile apps and websites, the demand for BTC as a payment option has surged.
Potential Profits
Though cryptocurrency prices are volatile, market swings can be positive. When a bull run occurs, coin prices typically increase significantly, resulting in better profitability for investors.
For instance, in December 2023, the Bitcoin price increased by 50% because the market was anticipating the approval of spot Bitcoin Exchange-Traded Funds (ETFs) by the US Securities and Exchange Commission (SEC).
After its approval, the coin attained a new all-time high of over $75,000 in March 2024. Early investors would have locked in significant gains. The possibility of profiting from upward market trends and positive market movements makes Bitcoin a top choice among long-term and short-term investors.
Macroeconomic Factors
The economic challenges in the UK and the rest of the world have also contributed to the rise of Bitcoin investing in the country. At a time of interest rate hikes, high unemployment rate, and increased inflation, many Brits seek Bitcoin as an alternative store of value to gold and real estate.
What Are the Risks of Investing in Bitcoin in the UK
Despite its numerous benefits as a store of value and a potentially profitable investment, here are some downsides to consider before investing in Bitcoin.
● Market Volatility: The crypto market is highly volatile, making Bitcoin a risky investment. The coin’s price can rise or fall sharply within minutes, potentially resulting in loss of value or profits.
● Potential Fraud: With crypto scams on the rise, cryptocurrency users are susceptible to hacks, phishing attacks, and fraud. For example, you may invest in a Bitcoin scheme and lose all your funds. You can also lose access to your coins if a malicious actor successfully takes over your crypto exchange account or digital wallet.
● Regulatory Uncertainty: There are still unclear regulations around the use of cryptocurrencies in the UK. However, this has slowly changed with the introduction of the Cryptoasset Promotion (Regulation) Order 2021, which regulates the advertisement of certain assets to crypto customers in the UK.
● Low Interest: Despite the evident increase in the demand for cryptos, a significant number of Brits are uninterested in investing soon. Many people haven’t invested in any digital asset because they believe it’s a scam, and several others are sceptical about cryptocurrencies due to their risky nature.
Legal Implications of Bitcoin Investing
Though cryptocurrency is still unregulated in the UK, the country has specific laws that crypto businesses must adhere to. For instance, the Financial Conduct Authority (FCA) states that crypto firms in the UK are not under their anti-money laundering laws and do not have to register to operate.
However, crypto marketing is regulated, and companies must get their marketing initiatives approved by the FCA or another authorised entity.
At the same time, there are tax laws regarding crypto investments. Your crypto income may attract capital gains tax between 10% and 20% if it is more than £6,000. Ensure you understand the legal aspect of crypto investing as stipulated by the government before investing.
How to Buy BTC in the UK
If you have decided to invest in Bitcoin, the easiest way to purchase the asset in the UK is through a crypto exchange. Follow the steps below to get started.
● Create a trading account with a reputable exchange
● Complete KYC
● Deposit funds using the available payment options
● Buy BTC
For additional security, you can store your BTC in a secure self-custodial wallet. Research the various hot and cold wallets on the market and choose the one that best suits your needs.
Future and Potential
Bitcoin has reached new highs in 2024, valued as high as $75,000 in April. Still, some experts believe the coin hasn’t peaked yet and predict its value will increase if the blockchain continues to grow and gain more adoption in the digital payments sector.
At the same time, some quarters are making bearish predictions, with analysts saying that the coin’s short-term sell pressure and potential security issues could negatively impact its price. Moreover, unfavourable regulations and public criticisms of Bitcoin could also swing its market sentiment and decrease its value.
So, while you’re optimistic about BTC, have an investment strategy that mitigates risks and stay updated with market trends to determine the best time to enter or exit the market.
Conclusion
The average UK crypto enthusiast is more interested in Bitcoin than any other asset due to its popularity and potential. Besides being a leading crypto asset, the coin is also at the forefront of digital payments and online gaming.
However, despite its potential, every investment is risky – and Bitcoin is no exception. Factors like volatility, regulation, environmental criticisms, and security issues can negatively affect the coin’s value and growth. Thoroughly assess your risk tolerance and take a strategic investment approach before investing in Bitcoin.