Bitcoin (BTC) price to Great British Pounds (GBP)

Source: CoinCorner/CoinGecko

What is Bitcoin?

Bitcoin is a way to store wealth and transact online. Bitcoin is also referred to as a cryptocurrency or digital asset. Most people today use Bitcoin as an investment due to its desirable asset-like characteristics such as its limited supply and decentralised nature, which some compare with gold. Bitcoin currently trades in almost every currency and country in the world including the UK with GBP. Most people buy fractions of a Bitcoin due its price and how a single bitcoin can be divided into 100,000,000 pieces called sats.

History of Bitcoin

Bitcoin was created in 2009, by Satoshi Nakamoto as an alternative for storing wealth and transacting online. Bitcoin’s creation was inspired by the great financial crisis of 2008, this new financial system was designed to remove middlemen (namely commercial banks) between people who wanted to hold or send money to one another.

Bitcoin not only removed the counterparty risk associated with holding your money at conventional banks, it also gave you a base currency that was inflation-resistant in terms of that it could not be hyperinflated away due to its fixed maximum supply. Bitcoin has been used by Human Rights Activists, Investors, Businesses, Banks, Governments, Universities, Hospitals, Law enforcement and just about every industry at this point.

Bitcoin in the UK

Bitcoin is the most popular cryptocurrency in the UK, 35-61% more popular than any other.^[1]^[2] Alongside this 93% of Brits say that they have heard of Bitcoin with 46% of them claiming to understand cryptocurrencies.^[3]^[4] Since January 2020 the number of Brits who believe cryptocurrencies are becoming more appealing as investments, has tripled.^[5]

In 2023, Britain was a top 5 country for most number of cryptocurrency holders worldwide with 20% of Brits believing cryptocurrencies could one day be used as frequently as cash and cards are used today.^[6]^[3] Additionally there are now over 1,100 British cryptocurrency companies growing at an average annual rate of 27.7% collectively employing over 37,000 people.^[7]

Is Bitcoin legal in the UK?

Yes, interacting with Bitcoin is completely legal in the UK, the British Government even regulates the use of cryptocurrencies and industry at large in the UK.

Is Bitcoin taxed in the UK?

Yes, Bitcoin and other cryptocurrencies are subject to taxation. Profits from trading or investing are considered capital gains, while earnings from mining or salary payments are treated as income for tax purposes.

Bitcoin’s Regulatory Journey in the UK

In 2017, the Payment Services Act (PSA) was amended to provide a legal definition of cryptocurrencies and impose statutory obligations on crypto exchange businesses, requiring them to register with the Financial Conduct Authority (FCA).

In April 2022, the Economic Secretary, John Glen MP, announced plans for the UK to become a global hub for crypto asset technology, with a focus on consumer protection and responsible innovation.

In October 2022, UK lawmakers officially recognised cryptocurrencies as regulated financial instruments. This helped move digital assets into a clearer regulatory framework, protecting investors against money laundering, fraud and market manipulation.

In September 2023, the FATF Travel Rule came into force, requiring crypto companies to obtain information from the sender and receiver of crypto assets and share it with counterparty crypto asset service providers.

In October 2023, the FCA brought in new regulations for cryptocurrency exchanges restricting certain types of promotional material, implementing strict warning titles and a 24 hour cooling off period for new investors.

In 2024, the UK government aims to introduce formal legislation to regulate the crypto industry, with the support of industry associations, traditional financial services firms, and other stakeholders.

Bitcoin in Traditional Finance

Bitcoin has seen increasing institutional adoption with the launch of the Bitcoin ETFs in January 2024, led by BlackRock and Fidelity, 2 of the top 3 largest asset managers in the world. This prompted the Financial Conduct Authority (FCA) to allow professional investors to access crypto exchange-traded notes (ETNs) in March 2024, with the first Bitcoin ETNs in the UK launching on the London Stock Exchange on May 28, 2024.