Should you invest in Cryptocurrency? It's not for us to say. However we can tell you that any gains you make, may indeed be subject to tax.
Bitcoin, Etherium, Dogecoin etc, cryptocurrency is either the future, or just a fad depending on who you talk to. The highly volatile digital tokens are subject to huge fluctuations in price that can see investments appreciate (or depreciate) very quickly. With individuals having more time throughout lockdown (and often excess money due to reduced outgoings) as well as the proliferation of easy to access platforms like eToro, we have seen a rise in new private investors to the markets, with many attracted to cryptoassets, such as crypto-currency and Non Fungible Tokens (NFT's).
However just yesterday, HMRC updated their manual on the tax treatment of crypto assets which already ran contrary to some of the misinformation that they fall outside of UK tax - in short, gains on cryptoassets ARE (and always have been) very much within the scope of UK taxation.
For most individuals, selling cryptoassets will be subject to capital gains tax (CGT) on their profits (should they have made a profit) and these should be reported on their Self Assessment return. Individuals have a tax-free allowance of £12,300 during the current 2020-21 tax year, but gains over this will be taxed at either 10 or 20 per cent, depending on the level of your other income. They effectively are treated in the same way as other assets that appreciate in value before disposal.
Note the taxable event only occurs once the asset is disposed of (sold/traded), so if you continue to hold, you wont have to pay CGT until you dispose of the asset.
We wrote some notes on CGT on investments last July (link here https://www.greenlineaccountants.com/post/stockbox-media-podcast-capital-gains-tax-notes) many of which can apply to the treatments of disposing of crypto.
For individuals making multiple, repeated trades in cryptoassets, then it may be deemed that rather than capital gains, you are actually engaged in a "trade", and so your income would be treated under income tax rather than Capital Gains. HMRC would use frequency, level of organisation and sophistication to determine whether someone has a "trade" in dealing crypto rather than investment subject to CGT, however it is rare that someone would be classified as "trading" in cryptoassets, as most hold for a while or simply wont be able to make as many trades as necessary.
This is highly likely to be a growth area of interest for HMRC in coming years, who already receive data from crypto exchanges on individual trading and so it is important you address any profits arising from disposal of cryptoassets in the correct manner and correct tax year.