Getting started with crypto

Cryptoassets are high risk and you could lose all the money you put in, so it is important to understand how buying works before you decide whether to proceed.

1. Choose a regulated, reputable platform

If you decide to buy crypto, you will usually do this through a cryptoasset exchange or trading app. Check whether the firm is registered or authorised in the UK for cryptoasset activities and make sure you understand its fees, features and safeguards before using it.

2. Focus on well known cryptocurrencies

New buyers often look first at larger, more established cryptoassets such as Bitcoin and Ethereum, but even these are highly volatile and can fall significantly in value. You should research any cryptoasset carefully and not assume that being well known or widely traded means it is safer or suitable for you.

3. Understand wallets and custody

Exchanges often provide an in-app or exchange wallet, but in many cases they control the private keys on your behalf. You can also use your own software or hardware wallet, which gives you more direct control but also more responsibility for security (for example, safely storing recovery phrases).

4. Start small and be prepared to lose it

Because crypto is high risk, many people who choose to invest start with a small amount they can afford to lose entirely. Only use money that is not needed for essential spending or emergency savings, and expect that prices may move sharply up or down in a short period of time.

5. Prioritise security and fraud protection

Common good practices include never sharing your wallet recovery phrase or passwords, checking you are using the correct website or app, and being cautious of unsolicited offers or “guaranteed return” schemes. If you use decentralised platforms, be particularly careful to check you are interacting with the genuine token or protocol, as copycat or fake versions can exist.

Crypto compared with traditional investments

Any comparison with traditional investments needs to give at least equal prominence to risks and must not exaggerate potential returns.

Cryptoassets are generally treated by the FCA as high risk investments, and you should be prepared to lose all the money you invest.
Prices can be extremely volatile, may be hard to value, and past high returns are not a reliable guide to what will happen in future.
For many crypto investments, you will not have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if something goes wrong.
Some people use crypto as a diversifying element in a wider portfolio, but diversification does not guarantee profits or protect against losses.
Crypto markets operate 24/7 and allow low minimum investments, but this can also make it easier to trade impulsively and take on more risk than intended.

Because of these factors, you should carefully consider whether crypto fits your risk tolerance, financial situation and investment goals, and think about taking independent financial advice if you are unsure.