How to Buy Maker in the UK – Beginner’s Guide
Cryptocurrencies have taken the financial world by storm, with Bitcoin leading the way. If you’re in the UK and looking to invest in digital assets, you might be interested in Maker (MKR), a decentralized cryptocurrency that’s gaining popularity. In this beginner’s guide, we’ll explore how to buy Maker in the UK, using Bitcoin as a bridge currency. We’ll cover the steps and platforms you can use for a smooth and secure investment journey.
Understanding Maker (MKR)
Before delving into the process of buying Maker, let’s briefly understand what Maker (MKR) is. MKR is a governance token on the MakerDAO platform, which powers the stablecoin DAI. It’s an essential part of the decentralized finance (DeFi) ecosystem and is used for voting on important decisions within the MakerDAO community. As the DeFi space grows, so does the interest in MKR.
Buy Bitcoin Online
To acquire Maker (MKR) in the UK, you’ll first need to buy Bitcoin. Bitcoin is a widely accepted cryptocurrency and serves as a gateway to other digital assets. Here’s how you can buy Bitcoin online:
Choose a Cryptocurrency Exchange
Select a reputable cryptocurrency exchange that caters to users in the UK. Some popular options include Coinbase, Binance, Kraken, and Bitstamp. Create an account, complete the necessary verification, and secure your account with two-factor authentication.
After your account is set up, deposit funds. Most exchanges accept GBP deposits through bank transfers or debit/credit card payments. Choose the option that suits your preferences and follow the instructions provided.
Once your account is funded, navigate to the trading platform and place an order to buy Bitcoin. You can choose between market orders (for immediate purchase) or limit orders (to set a specific price at which you want to buy).
Invest in Bitcoin
With Bitcoin in your digital wallet, it’s time to explore how you can use it to invest in Maker (MKR). Here’s a step-by-step guide:
Create a Crypto Wallet
Before transferring your Bitcoin to another platform, make sure you have a secure cryptocurrency wallet. Hardware wallets like Ledger and Trezor provide excellent security. Alternatively, you can use software wallets like Trust Wallet or Metamask.
Transfer Bitcoin to an Exchange
Choose a cryptocurrency exchange that supports Maker (MKR) trading and allows deposits in Bitcoin. Some well-known exchanges include Binance, Kraken, and KuCoin. Transfer your Bitcoin from your wallet to your chosen exchange.
Buy Maker (MKR)
Once your Bitcoin is deposited, place an order to buy Maker (MKR). You can either use a market order for instant purchase or set a limit order to buy MKR at a specific price.
Best Sites to Buy Bitcoin in the UK
To ensure a smooth experience when buying Bitcoin in the UK, consider these reputable cryptocurrency exchange platforms:
Coinbase is a user-friendly platform suitable for beginners. It supports GBP deposits, making it an excellent choice for UK residents. It’s known for its ease of use and strong security features.
Binance is one of the largest cryptocurrency exchanges globally and offers a wide range of trading options. It provides a user-friendly interface and competitive fees. While it’s primarily a trading platform, it’s a reliable choice for Bitcoin purchases as well.
Kraken is a well-established exchange with a solid reputation. It supports GBP deposits and offers a variety of cryptocurrencies. Kraken also provides advanced trading features for more experienced users.
Secure Your Investment
After you’ve successfully purchased Maker (MKR), it’s essential to prioritize the security of your investment. Here are some key steps to safeguard your digital assets:
Use a Hardware Wallet
Consider storing your Maker (MKR) in a hardware wallet like Ledger or Trezor. Hardware wallets are offline devices that provide an extra layer of security against hacking and online threats.
Enable Two-Factor Authentication
Always activate two-factor authentication (2FA) on your exchange accounts and wallets. This extra security feature ensures that even if your login credentials are compromised, a second verification step is required.
Keep Backup Copies
Make multiple backup copies of your wallet’s private keys or recovery phrases. Store these backups in secure, separate locations. This is crucial in case your hardware wallet is lost or damaged.
The cryptocurrency market is highly volatile, and prices can fluctuate rapidly. Stay informed by following reputable cryptocurrency news sources and consider joining cryptocurrency forums and communities to discuss trends and get insights from experienced investors.
In the UK, cryptocurrency transactions are subject to tax. It’s essential to report your cryptocurrency gains and losses accurately to remain compliant with tax laws. Here are a few key points to consider:
Capital Gains Tax (CGT)
In the UK, cryptocurrency is subject to Capital Gains Tax when you sell or dispose of your digital assets. You should keep records of all transactions and report your gains to Her Majesty’s Revenue and Customs (HMRC).
Use reputable cryptocurrency tax software to help you calculate and report your crypto gains accurately. Failing to report your cryptocurrency earnings can result in penalties and legal consequences.
Seek Professional Advice
If you’re unsure about your tax obligations related to cryptocurrency, it’s advisable to consult with a tax professional who has expertise in the field. They can guide you through the process and help you remain compliant with tax regulations.
While some investors buy cryptocurrencies for short-term gains, others adopt a long-term strategy. Here are some tips for those considering a long-term approach:
Diversify Your Portfolio
Don’t put all your funds into a single cryptocurrency like Maker (MKR). Diversify your investments across multiple assets to spread risk.
HODL (Hold on for Dear Life)
Consider holding onto your cryptocurrencies through market fluctuations. Some investors believe in the “HODL” strategy, which involves holding onto assets for the long term, even during price downturns.
Stay informed about the developments in the Maker (MKR) ecosystem and the broader cryptocurrency market. Be open to adjusting your strategy as new information becomes available.
Invest in crypto can be a rewarding and exciting venture, but it comes with its own set of challenges and responsibilities. As you explore how to buy Maker (MKR) in the UK, remember to prioritize security, stay compliant with tax regulations, and consider your long-term investment strategy. The cryptocurrency landscape is constantly evolving, and staying informed is key to making sound investment decisions. With the right knowledge, security measures, and a well-thought-out strategy, your journey into the world of digital assets can be a successful and fulfilling one.