How quickly times change. Gamestop is old news and Bitcoin is back in fashion. The price of the cryptocurrency has sky rocketed over the past year going from approx £5,000 to £35,000. That is an insane increase of 600%.
There are a number of reasons for this. Governments debasing currencies from all the money printing that has been going on. Secondly, cryptocurrency is anti-establishment and this movement is gaining traction from the BLM protests, to the capital riots to the Gamestop saga. Thirdly, and arguably most importantly, bitcoin is becoming mainstream with a number of big corporations such as Tesla and a number funds such as Blackrock, Ruffer and Ray Dalio’s Bridgewater buying into it. Furthermore, Visa and Mastercard have said to come out in support of Bitcoin as of late further enhancing the credentials of the cryptocurrency. This goes against the whole anti-establishment thing but what do I know. But it is important for two reasons nonetheless. First, it sends a signal that institutional investors are taking the asset class very seriously. Second, it’s also interesting how institutions are following the lead of retail investors, when normally it would be the other way round.
So the question is, what are cryptocurrencies and how do buy Bitcoin in the UK?
What Are Cryptocurrencies?
A cryptocurrency is a digital value system that functions as a means of exchange. They can be used to facilitate transparent, fast, and secure transactions between people across the world. Cryptocurrencies like Bitcoin are revolutionizing the way that we exchange goods and money across the global economy.
Where To Buy Bitcoin In The UK
There are several options available for UK residents to buy Bitcoin.
Cryptoexchanges are basically platforms, mobile apps and websites which allow investors to purchase bitcoin with normal fiat money or with another cryptocurrency.
Another place to buy Bitcoin is eToro which is a commission-free dealing platforms aimed largely at younger investors.
If you would rather get exposure to Bitcoin indirectly via a stock which you can buy through your normal brokerage accounts and via your ISA so you can get tax free gains, have a look at Argo Blockchain.
Argo blockchain on its website claims to be the only cryptocurrency mining company listed on the London Stock Exchange. Mining cryptocurrency means verifying transactions and adding new blocks to a blockchain ledger, a complex process which is rewarded with bitcoin. Argo recently reported mining revenue of £2.48 million for January, up from £1.63 million in December 2020. The higher the price of Bitcoin, the money more Argo Blockchain makes. The share price of Argo Blockchain essentially tracks the price of bitcoin to an extent. With the surge in Bitcoin prices over the past 12 month, Argo blockchain’s share price rose from 3.30gbx to 140gbx in just under a year; a return of 4,100%. The share price jumped of 4,100% returned more than Bitcoins 600% indicating the limited options in terms of share-based investments for those looking to get exposure to bitcoin.
Apart from Argo Blockchain, Mode Global is another way to get exposure to Bitcoin via the stock market. Mode is a bitcoin banking app. It saw trading volumes surge, 500% in December. It also offers a ‘Bitcoin Jar’ product which offers the prospect of interest on holdings of the cryptocurrency.
So there you have it. Three ways to invest in Bitcoin. The first is via a crypto exchange. The second via a trading platform such as eToro. The third via shares listed on the London Stock exchange. You can buy shares on the London stock exchange via a number of reputable brokers such as AJ Bell Youinvest, Freetrade and Hargreaves Lansdown.