Best Crypto Wallet UK

What is the best crypto wallet UK?

There is technically no “best crypto wallet UK” or “best Bitcoin wallet UK” out there, as each has different features that will appeal to different people.

For example, if you just want to try your hand at crypto trading without getting too in-depth, you may want to consider using a wallet that doesn’t have an inactivity fee. This is especially the case if you just wanted to buy your crypto and hold it over longer periods.

Or, if you are planning on trading large volumes of digital currencies, you may want to use a wallet with lower commissions per trade, so that fees don’t eat into your holdings too much.

It may also be worth reviewing the different supported currencies a wallet may offer. If you were looking to trade Bitcoin only, you should ideally look for the best bitcoin wallet UK. Or, if you wanted to trade a less popular cryptocurrency, such as Tether, you would need to find a cryptocurrency wallet that allows you to do this.

And, of course, if you’re worried about security, you should ideally use a wallet that holds its users’ coins in cold storage, choosing a provider that offers this service or perhaps even using a crypto hardware wallet.

6 steps to sign up to a crypto wallet and start trading cryptocurrency

Now that you know about some of the best crypto wallets UK, you’re probably itching to start trading cryptocurrencies.

Doing so isn’t too difficult either – continue reading and follow my step-by-step guide to investing in crypto to get started.

1. Decide which wallet best suits you

Before you can start purchasing and investing in cryptocurrencies, you first need to decide which crypto or Bitcoin wallet best suits you.

If you want to trade one of the big cryptocurrencies, such as Ethereum or Bitcoin, chances are most wallets will allow you to purchase and store these popular coins.

Meanwhile, if you have a particular currency in mind, you may want to double-check if your desired wallet offers access to the cryptocurrency.

You may also find that some crypto wallets have higher fees, such as a debit or credit card deposit fee. If you want to deposit money in a certain way or wish to make many trades and want to avoid trading fees, then you may want to consider using a wallet that has lower charges.

Or, if you’re still a beginner, you may want to think about using a less complicated Bitcoin wallet with a provider that offers educational materials.

Certain wallets may allow you to download software onto your computer, such as a desktop wallet, or potentially onto your phone in the form of a mobile wallet app. If this is the case, you may want to download everything before you start trading crypto.

Also, as I’ve discussed, there are many different types of UK Bitcoin wallets, each coming with its own set of features and benefits. For example, even if you’ve downloaded a custodial wallet, you may want to think about purchasing a cold, hardware wallet if you’re planning on storing your currencies for a longer period of time.

If you’re unsure which wallet type would best suit you, then you can read more about this further in my guide.

2. Create an account with the wallet provider

Next, you need to make an account with your chosen wallet provider.

This should be simple enough – simply input your information and make the account. Some providers may ask for relevant documentation to prove your identity, such as a passport number or a picture of a driving licence, and perhaps even a photocopied P60 form.

3. Deposit funds to your crypto wallet

Now that you’ve made your account, the next step is depositing funds into your new wallet.

Some wallets may charge for deposits made with a debit or credit card. For example, you can buy XLM with credit card at Blocktrade, but you may incur a fee. Always check the crypto exchange platform fees.

Fees aside, depositing money to your wallet from your bank account should be relatively easy – simply input the amount of money you wish to deposit and make the transfer.

4. Decide which cryptocurrency you wish to trade

Before you can join the ranks of crypto traders, you still need to decide which currency you wish to trade.

You could, for example, invest in Bitcoin or Ethereum, which are two of the most popular cryptocurrencies on the market. Though, it’s worth keeping in mind that these tend to be slightly more volatile than a stablecoin, such as Tether.

You can read more about these different cryptocurrencies later in my guide.

5. Place a trade for your chosen cryptocurrency

Now you’re finally ready to become a crypto investor. If your wallet offers an in-built marketplace, simply search for the name of your desired cryptocurrency on that marketplace, input the number of coins you wish to purchase and make the trade.

It’s worth keeping in mind that not all wallets offer access to an in-built marketplace. If this is the case, you may want to use one of the many external crypto exchanges, such as:

• Gate.io
• Kraken
• KuCoin
• Binance
• Crypto.com

6. Store your crypto and monitor price movements

Congratulations, you’re now a crypto investor! The hard work doesn’t stop here though, as you’ve still got to store Bitcoin or whichever crypto you’ve chosen and monitor any price movements.

If you’re planning on holding your currencies for a long period of time, you may want to consider using a cold, hardware wallet. Since these aren’t connected to the internet, they are typically more protected from hackers.

Or, of course, you could just store your coins in a custodial wallet offered by a third party.

You should ideally monitor any price movements your purchased cryptocurrency makes too. This way, should the price increase, you can potentially sell your coins for a profit, or if it decreases you can cut your losses.

What is a crypto wallet?

While cryptocurrency isn’t a physical, tangible form of money, you still need a place to hold it. This is where crypto wallets come in.

As the name suggests, crypto wallets are essentially pieces of software that securely hold your cryptocurrencies for later use.

Cryptocurrency wallets allow users to store, send, and receive different cryptocurrencies, with some wallets even giving users the ability to buy and spend the coins within them.

There are also many different types of crypto wallet, differing so much that some are types of online software in the form of a web wallet, while others are hardware wallets, perhaps in the form of an external hard drive or a USB stick.

You can read more about the different types of cryptocurrency wallets later in my guide.

How do crypto wallets work?

Crypto wallets are backed by blockchain. This is highly complicated technology but, in simple terms, it is basically a digital public ledger that stores data in “blocks”.

The blockchain records all transactions, the balances in any given wallet, and who owns these wallets.

So, when you purchase cryptocurrency and store it in your wallet, your new currency technically isn’t in the wallet itself. It is instead stored on the blockchain, and your wallet allows you to interact with it.

When you open a crypto wallet, you will typically be given a unique private key. These private keys are passwords that allow you to access your cryptocurrencies and are essentially your wallet’s “address”.

So, for example, if you had a Bitcoin wallet, you would have your own unique Bitcoin wallet address.

Are crypto wallets safe?

While the underlying blockchain technology is usually considered quite secure, this doesn’t mean your investment is completely safe.

Indeed, some users may find themselves victims of theft, computer failure, or a loss of access to their wallets, all of which could result in the loss of your crypto investment.

As mentioned, there are several different types of crypto wallet, and when it comes to safety, the varying types bring different levels of security.

For example, cold wallets, which are essentially external hardware devices such as USB sticks or hard drives, are typically the safest crypto wallet.

This is because they usually aren’t connected to the internet, which makes it extremely difficult for hackers to steal your currencies. However, crypto hardware wallets are not entirely infallible, as you could lose the device that your coins are held on – indeed, one unfortunate investor claimed to have binned a £200 million Bitcoin wallet in 2013.

Meanwhile, this also doesn’t mean that online wallets are completely unsafe. In fact, many web wallets take countless precautions to stop theft – though, for long-term storage and safety of your cryptocurrency, you may want to consider a cold wallet.

What are the different types of crypto wallets?

There are several different categories and sub-categories of cryptocurrency wallets available to you, which can make it quite confusing to decide which would best suit your needs.

Before you open a crypto wallet and start trading, you should first compare the features of the different wallets on offer so you can decide which you most prefer.

The two main categories for crypto wallets are custodial and non-custodial wallets, while there is a further sub-category of hot and cold wallets.

Continue reading to discover the main differences between them.

Custodial wallet vs non-custodial wallet

First things first, all the different types of cryptocurrency wallets can be categorised under a “custodial wallet” or a “non-custodial wallet”.

Custodial wallets

A custodial wallet is a place to store your cryptocurrency that is hosted by a third party. This could include anything from a piece of software offered by a wallet provider, or simply a business that offers any degree of security system to safely store crypto.

One of the great things about custodial wallets is their ease of use, intuitive user interface, and the peace of mind they can offer. For example, if you lost your password or wallet address to your custodial wallet, you could easily request a new password from your provider. In this instance, you wouldn’t lose your cryptocurrency as you might if you forgot the password for a non-custodial wallet.

When you use a custodial wallet, all transactions are handled and “signed off” by your wallet provider. They will use your private key to allocate and move currencies for you.

However, since your provider uses your private key, which is used to access your wallet, this makes them a common victim of hacking as you’re relying on them to keep your wallet private keys safe.

If you do want to use a custodial wallet, you should make sure that the provider is trustworthy and reputable. Otherwise, you could end up falling victim to hackers, or end up losing your investment if the wallet provider goes bust.

You should also ensure that you keep your wallet’s private key safe to prevent hackers and scammers from accessing your funds.

Non-custodial wallets

Non-custodial wallets, on the other hand, are wallets in which the full responsibility of the storage of your crypto is completely in your hands.

You control your private keys and who can access them, which could make them safer than custodial wallets.

There are a few different types of non-custodial wallets available. These could range from browser-based and mobile wallets, to hardware wallets such as USB sticks.

While a non-custodial wallet does give you more freedom over your crypto, there is also more responsibility involved. If you forget your password for your non-custodial wallet, for example, chances are you’ll have no way to access your funds.

Also, it’s worth noting that non-custodial wallets tend to be more technically complex than custodial wallets. So, if you’re still a beginner to cryptocurrency, you may want to consider using a custodial wallet first.

Hot vs cold wallets

Next, we have hot and cold wallets. These are fairly simple to remember – a hot wallet is one that is connected to the internet, while a cold wallet is typically not. Each comes with its own set of benefits and disadvantages.

For example, a hot wallet makes trading and spending your cryptocurrencies faster and easier. Since they are always online, there’s no need to constantly change between online and offline to make transactions.

However, since hot wallets are always connected to the internet, they are typically more susceptible to hackers and crypto thieves.

Meanwhile, cold wallets are generally much safer. Since they aren’t connected to the internet, there’s little to no way for hackers to access your wallet and steal your cryptocurrency.

Though, it’s worth keeping in mind that cold wallets tend to be less convenient than hot wallets.

But which is better of the two? Well, it may be a good idea to store smaller amounts of cryptocurrency on your hot wallet that you intend to trade with.

Meanwhile, if you’re planning on storing larger amounts of cryptocurrencies over a longer period of time, then a cold wallet may be the right move.

Paper wallets vs hardware wallets

Two more sub-categories of crypto wallet types are paper wallets and hardware wallets. These are both types of cold wallets, though the features differ slightly between the two.

Paper wallets

A paper wallet is a type of wallet that you can generate from specific websites. Your paper wallet will print a private and public key onto a piece of paper, and when you want to access your wallet again, you need this sheet of paper and the codes on it.

There is absolutely no user interface with a paper wallet other than this piece of paper itself, and the wallet isn’t connected to the internet, which makes it a cold wallet.

Hardware wallets

Meanwhile, a hardware wallet is a type of external device that stores your private keys and cryptocurrencies. These can be anything from USB sticks to external hard drives.

For example, if you had purchased Bitcoin, you could transfer your new currency to a Bitcoin hardware wallet. When you have transferred your coins to your Bitcoin wallet, you wouldn’t need to give it attention until you next needed to access your cryptocurrency.

One of the biggest advantages of a hardware wallet is the reduced risk of viruses and hackers. This is because your hardware wallet will rarely come into contact with your home network.

Software wallets

You can also choose a software wallet, which is typically a hot, custodial wallet that is offered by a wallet provider.

These come in varying forms, which include:

• Web wallet – as the name suggests, these run from a browser on the internet. They typically make it easier and more convenient to interact with other web-based marketplaces.
• Desktop wallet – these wallets come in the form of software that is downloaded to your desktop.
• Mobile wallet – these are much like desktop wallets, except you download them onto your mobile phone instead. A mobile wallet can be a useful choice if you want to be able to access your funds on the go.

Can you store any type of cryptocurrency in your wallet?

When it comes to storing your cryptocurrencies in your wallet, you should first ensure that your chosen wallet provider even offers access to your chosen crypto in the first place.

Typically, most wallets will allow the storing and trading of the largest cryptocurrencies on the market. For example, you would be hard-pressed to find a wallet that didn’t allow the storing and trading of Bitcoin or Ethereum.

Though, if you wanted to trade more lesser-known cryptocurrencies, such as XRP, you should first ensure that your chosen wallet provider offers access to the currency.

What is a cryptocurrency?

Cryptocurrencies are a type of decentralised digital currency powered by the “blockchain”.

To get a better understanding of how cryptocurrencies work, you should imagine them like any other traditional currency. You can purchase things with them or invest in the currency itself with the aim of selling it when its value rises to turn a profit.

Though, cryptocurrencies differ greatly from traditional, government-backed currencies. Indeed, while traditional forms of currency are centralised, cryptos instead operate in a decentralised structure – that is, they’re separate from any centralised bank or institution.

Also, traditional forms of currency tend to be backed by commodities, such as gold and silver. Meanwhile, cryptocurrencies are typically not backed by any commodity.

How do cryptocurrencies work?

As mentioned, cryptocurrencies use something called the blockchain to operate.

This is essentially an online database that stores all of its information in a digital format. You should think of it as a digital ledger – it records all transactions and stores any information about all coins on the market.

One of the major benefits of the blockchain is that it doesn’t rely on external authorities to confirm the authenticity of the data. This means it can operate quickly and efficiently.

Cryptocurrencies are usually traded using “smart contracts”. These contracts automate the execution of trades and inform all participants of the exact value of the transaction without any external involvement needed.

What are the most popular types of cryptocurrency?

As the popularity and buzz surrounding cryptocurrencies has grown, more and more types of currency now exist since the advent of Bitcoin.

So, continue reading to find out what the most popular types of cryptocurrency are so you can decide which to invest in.

Bitcoin

This is most likely the first type of coin you imagine when you think of cryptocurrencies.

Bitcoin was launched in 2009 and is both the largest by market capitalisation and the first cryptocurrency to be founded.

The value of Bitcoin is derived from its scarcity. Indeed, only 21 million Bitcoins will ever exist, with 91% of its supply already in circulation.

Bitcoin’s turbulent share price is another reason why you may have heard of the currency. Indeed, Bitcoin’s value skyrocketed from $5,392 on 9 March 2020, to a staggering $59,302 on 8 March 2021. Over the period of a year, Bitcoin’s value increased by around 999%, so you can see why investors were clamouring to get on board.

After a period of all-time highs, Bitcoin’s value has since sunk back down to the levels we’re seeing today – it was valued at $19,805 on 6 September 2022.

Ethereum

Ethereum is the second most popular cryptocurrency available to you.

The currency was originally launched to complement Bitcoin rather than compete with it, though it has ended up as a competitor for Bitcoin.

The virtual currency doesn’t just utilise the blockchain for a decentralised payment network – it also stores computer code that can be used to power tamper-proof decentralised finance applications.

As for its price, Ethereum sat at $1,518 on 6 September 2022.

Like Bitcoin, Ethereum saw a meteoric rise, and subsequent fall, over the past few years. Indeed, after hovering around the $228.80 mark on 19 June 2020, its price shot up to $3,917 by 7 May 2021.

Following that, it was a rocky year, with its price dropping to $1,902.57 on 16 July 2021, back to an all-time high of $4,516 on 5 November 2021.

Though, like many cryptocurrencies, the crypto crash in recent months has caused Ethereum to plummet back down to the levels we’re seeing today.

Tether

If you were looking for a cheaper cryptocurrency to invest in, then you may want to consider Tether.

The decentralised currency aims to be a stablecoin, which is a type of cryptocurrency that pursues a steady valuation. Tether uses the US dollar to determine its value.

Being pegged to a traditional currency makes Tether typically less volatile than other cryptocurrencies available on the market.

Best Crypto Wallet UK FAQs

Please note

Crypto assets are not regulated financial products so please be aware that trading them carries a considerable amount of risk for your capital. Cryptocurrencies are also not covered by existing consumer protection laws.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.