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I live in the UK, and am trying to find a site that allows purchase of BitCoin using GBP; our local currency.

Of all the sites I've tried so far, even though they provide flashing banners saying 1 BTC = £3000 GBP (crude example), when it actually comes to buying, they only accept USD or EUR. The sites insist that EUR is transferred via bank/card to their online account, then BTC can be purchased.

Now, the GBP is particularly weak against both EUR and USD.

Therefore, am I right to assume that by following this approach, I get a particularly poor amount of BTC from my GBP, because in implicit conversion to EUR occurs as part of the transfer purchase, and the BTC end result is based on the strength of the GBP against the EUR?

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I can only speak from experience.

I SEPA transfer money to Bitstamp. It is converted into Euros at the prevailling exchange rate. (note the charges for SEPA transfer can vary widely - in my experience between £4 and £25!)

When I transfer out it is converted back from Euros into pounds sterling.

In theory if we assume that the exchange rate was static, then if it is weak one way, you'll gain in the other direction. i.e. If your pounds to euros conversion is bad, then when you sell bitcoin and cash the euros back to pounds, you'll get more pounds for your euros. The price of bitcoin is global - I would guess most people trade in dollars.

Of course the reality is that these things can fluctuate heavily and can make quite a difference. Also when a site exchanges between the two it is never as good as the amount when I checked the exchange on google (which is to be expected)

I would warn against card purchases, as the fees are much higher than any exchange rate issues.

Alternatives - you could use localbitcoins and buy them in pounds sterling from someone - downside to this is the price will be a lot worse, as these people need to make margins and profit to bother doing this.

One final bit of advice - never use paypal for BTC trades (not that you mentioned it) - too many bad things could happen.

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am I right to assume that by following this approach, I get a particularly poor amount of BTC from my GBP

It depends on what you mean by "particularly poor amount". You are definitely going to have to pay extra, because you're doing two currency conversions instead of one, and you'll usually experience commissions/fees/unfavorable rates for each individual transaction.

However, the BTC:XXX exchange rate isn't 1:1 for all currencies. So it's likely the overall cost will be close, even though not exact.

What I mean by this is that if they are advertising 1 BTC as being equal to £3000, then it just means you have to buy £3000 worth of an acceptable exchange currency to get one. That could be 3839.70 USD or 3255.36 EUR (at present mid-market rates).

They are definitely not implying that 1BTC = 3000GBP = 3000EUR = 3000USD.

  • The concern was that any GBP amount would be immediately weakened by the conversion to EUR, and the amount of BTC I end up with is directly based on the value of GBP<-->EUR, which is terrible at present. – EvilDr Aug 23 '17 at 13:44
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    That only becomes an issue if the GBP:EUR rate changes. Consider the following scenario: buy 1000EUR at a rate of 0.92GBP, total cost 920GBP. Wait 30 days, the rate has changed to 0.93GBP per EUR (i.e. the pound is even weaker than before) if you convert your currency back to GBP at this point you make a small £10 profit. Alternatively, if the pound had strengthened you'd lose a bit. And if the rate remained unchanged, you gain/lose nothing at all. (I'm ignoring commissions here for simplicity). – CactusCake Aug 23 '17 at 13:50
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    @EvilDr If you were able to get significantly more bitcoin, or any other currency, through straight conversion from GBP, rather than GBP to EUR to currency (where significantly means more than the value of the commission fee + spread), then you would be able to buy bitcoin directly (from another exchange), then immediately convert to GBP through EUR and get more GBP than you started with (since you would get significantly less bitcoin for the same GBP this way, remember?), making a perpetual money-making engine. And for most intents and purposes, those don't exist in nature. – Ordous Aug 23 '17 at 17:22
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The issue with buying BTC has a lot more to do with the specific exchange than the theories around how currency pairs fluctuate in value.

If there's no exchange in the UK trading BTC against GBP directly, then pick a different fiat currency. Whether or not that may theoretically yield you less BTC than a direct GBP transaction is irrelevant if there is no exchange trading against GBP.

Various exchanges have WIDE ranging order books between BTC and fiat currencies, USD or EUR or RUR. And the exchanges might not even have the liquidity in the orderbook to fill the amount you're trying to buy anyway; anywhere near the listed last price. One exchange I use frequently has +/- 30% listed for BTC/EUR simply because the bid/ask spread is so wide (because there's no real liquidity in that pair on that exchange).

In fact, here are the price quotes right now for BTC/USD and BTC/EUR on the same exchange.

Pair         Price              Volume     Change
BTC/EUR    2500.0400            0.1800    -26.47%
BTC/USD    4178.00000000     1520.1300     +4.61%

Right now X-Rates lists one EUR is trading for $1.180922 USD. So the quotes above bear no relationship to the broader forex market, and reflect a clear lack of liquidity on the EUR pair on that exchange.

If I were you, I would find someone on a local forum to buy coins from with cash. Separately, and I'm sure this is obvious but it's worth reiterating, if you're having this much trouble buying while BTC is hot, consider how hard it will be to sell if it's ever not. (This is coming from someone who has been involved in crypto and is long BTC, make sure your risk level matches the reality of the state of liquidity where you are)

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