How to Buy NFTs in the UK: the Brief Guide for Investors

By now, you’ve probably heard of NFTs, or non-fungible tokens, but maybe you’re not quite sure what they are, what they do, and how or even why to invest in them.

What do you actually get when you buy one? And how do you get started safely if you’re based in the UK?

Well, first of all, NFTs can be an appealing digital asset class for investors. They represent verifiable ownership of unique digital items. For instance, this could be for digital art, music, or access to exclusive events.

This guide will walk you through everything you need to know about this exciting asset class, including best buyer practices and how to buy NFTs in the UK securely.

Let’s start with the basics.

NFTs are digital assets stored on a blockchain. But unlike cryptocurrencies such as Bitcoin and ether, NFTs aren’t interchangeable. Each one is unique, which makes them ideal for things like digital art, collectibles, and identity.

The value of an NFT lies in ownership, scarcity, and access. For instance, buying an NFT might give you a one-of-a-kind artwork, or VIP entry to a music event. They're already being used in fashion, gaming, real estate, and even sports.

NFTs matter because they shift ownership from central platforms to individuals. They are a means to actually own a piece of the internet.

NFTs can offer unique and exciting benefits.

They give creators new ways to earn and offer collectors proof of ownership. They also help creators to take back control over their art from traditional gatekeeper organizations and digital platforms that dominate their market.

One of the most innovative things about NFTs is that they are programmable. This means that creators can earn royalties automatically whenever a buyer resells an NFT.

For investors, there are downsides to keep in mind too. NFT prices can fluctuate wildly. The NFT market is still young, and like anything online, there are scams to beware of. Market knowledge, due diligence, and best security practices will help safeguard your NFT investments.

Every new asset class comes with risk, and NFTs are no exception. The most common threats include buying fake NFTs, falling for phishing attacks, or losing access to your wallet.

To stay safe and ensure secure NFT buying:

• Only buy from verified collections.
• Use a hardware wallet, not just a browser extension.
• Never share your private keys.
• Be cautious with influencer hype or celebrity drops.

It’s also important to know that NFTs are illiquid. Unlike crypto coins, it can take time to find a buyer willing to match your price.

Buying your first NFT should be exciting, not stressful. Here’s how to keep things simple and secure:

1. Research the project

Look into the artist, the roadmap, and the community.

2. Start small

Only invest what you’re willing to lose.

3. Use a secure wallet

Hardware wallets like Ledger offer high-security protection.

4. Choose a reputable marketplace

Investors in the UK and around the world use platforms like OpenSea and LooksRare.

5. Avoid acting on hype

If it sounds too good to be true, it probably is.

These habits will help you build confidence and avoid common mistakes.

Look for value adds. NFTs are typically associated with digital art, but they can offer a ton of utility beyond just artwork. This might include exclusive content, future airdrops, in-game use, representation of ownership of physical items or rights, and real-world perks like event invitations and access to exclusive communities.

Join online NFT communities, such as on Discord. These are often where early information is shared. Some collectors also stake their NFTs or use them as collateral, although this is more advanced and comes with added risk.

Most importantly, taking a long-term view to your NFT investment decisions is a good rule of thumb. You can do so by focusing on quality over quantity and treating NFTs as digital assets, not lottery tickets or speculative buy-and-sell assets.

Getting started with NFTs in the UK doesn’t need to be complicated, but it does need to be secure. The first step is owning cryptocurrency, usually Ethereum (ETH), which is the most commonly used asset for buying NFTs.

To do this safely, follow this five-point plan:

1. Choose a UK crypto provider registered with the Financial Conduct Authority (FCA)

Make sure the platform is FCA-registered to ensure legal compliance and robust consumer protection. OANDA Crypto is an award-winning UK crypto platform that’s FCA-registered and can get you up and running with Ethereum investment fast and securely.

Choosing to buy ETH with a trusted UK platform like OANDA Crypto acts as a strong gateway to purchasing NFTs. This is because you get to buy in GBP and you go through an exchange that is based in the UK and registered with the UK’s financial watchdog, the FCA. Fees on NFT marketplaces to buy ETH can also be considerably higher.

2. Deposit GBP and buy Ethereum

Use bank transfer or debit card to convert pounds into Ethereum within your account.

3. Store your ETH in your OANDA Crypto wallet

Your OANDA Crypto custodial wallet provides you with highly secure ETH storage.

4. Move ETH to an NFT Wallet for NFT Purchase

Choose a trusted NFT wallet provider. Then, transfer your ETH from your OANDA Crypto wallet.

For instance, you might choose an NFT wallet provider like MetaMask or Trust Wallet, which can connect to your NFT marketplace of choice, such as the aforementioned OpenSea.

5. Buy Your NFT and Store it Safely

Once you purchase your NFT on an NFT marketplace, store it in your wallet.

You can store them in your non-custodial crypto wallet, such as those provided by MetaMask and Trust Wallet. But you also have the option of cold storage by connecting to a hardware wallet. Providers include Ledger or Trezor.

Following these steps helps ensure your entry into NFTs is secure, compliant, and easy to manage. It might seem complicated with all the platforms and steps mentioned, but it isn’t at all. Rather, the process can be fast and simple, once your ID verification checks are completed.

It’s highly unlikely that NFTs are a mere flash in the pan. But, like with many exciting and innovative new assets, they turned a lot of heads when they exploded in popularity in 2021, for that hype to inevitably die down.

The NFT space is evolving fast though and offers UK investors a unique, innovative way to buy and sell many kinds of digital assets, including artwork, gaming items, digital keys, and many more.

Major brands like Nike, Starbucks, and the NBA have already launched NFT initiatives. Nike released multiple series of branded NFTs. For investors, this means more use cases and more stable value. As blockchains scale and regulation improves, NFTs are likely to become part of everyday digital life.

This is why starting now with NFT investment, cautiously and judiciously, could be a smart move in the long term.

Becoming an NFT owner is a step into the next phase of digital investment and trade, which can diversify your portfolio, open you up to unique, exclusive opportunities, and create wealth growth avenues.

By using trusted tools, staying informed, following due diligence at every step, and investing at a pace that suits you, you’ll be well-placed to succeed in NFT investment.

Get started with your NFT investment journey today! Buy ETH with pound sterling on OANDA Crypto and get peace of mind that you’re with a safe, award-winning, FCA-registered UK digital asset investment platform.

OANDA Crypto is part of the OANDA Group.