Cryptocurrency has garnered a lot of mainstream attention in 2021-22. In 2021 the price of Bitcoin soared to new all-time highs. This was followed closely by the rest of the crypto market. Altcoins like Ethereum (ETH), Cardano (ADA), Solana (SOL), Shiba Inu (SHIB) provided investors with astronomical returns. With experts and analysts predicting continued growth of both the crypto market and the blockchain industry over the next decade, it’s not too late to start investing in digital currency. This guide details how to buy crypto in Australia with simple steps and helpful tips.
How to buy cryptocurrency in Australia
- Choose a crypto exchange
- Create a free trading account
- Complete verification
- Enable Two-Factor Authentication (2FA)
- Deposit AUD into your account
- Buy cryptocurrency
Where can I buy cryptocurrency in Australia?
The most common way to trade cryptocurrency in Australia is through a cryptocurrency exchange. There are several cryptocurrency exchanges and trading platforms available to Aussies, both Australian-based and international. If you’re looking for the best Australian crypto exchange, you should be looking for things like low fees, good customer support, large number of listed cryptocurrencies and their supported fiat currencies (i.e. signing up to an online exchange that supports AUD deposits makes the process of depositing money easier). Compare exchanges and crypto trading platforms below:
|AUD, USD & NZD
|AUD, USD, GBP & more
|Join Digital Surge
|AUD, USD, NZD & GBP
|USD, NZD & GBP
|AUD & GBP
|Join Coinjar Exchange
|USD, GBP & more
Step 1: Choose a crypto exchange
The first step in your journey to buying cryptocurrency is to choose a reputable Australian cryptocurrency exchange or trading platform. The comparison table above lists information about the top exchanges in Australia.
Step 2: Create a crypto trading account
Once you have chosen an exchange that is suitable for you, you’ll need to create an account. The account creation process for most exchanges is quite simple and similar to other standard application forms for other online services.
The Swyftx Australian crypto exchange, which is the exchange we’ll be using for this example, requires you to provide personal details such as your full name, email address and phone number when signing up. You’ll also need to create a secure password.
Important to note: When creating your password, DO NOT use the same password that you use for your email or your social media accounts. Create a unique password with numbers and special characters and store it in a secure place.
Step 3: Complete verification
To activate your account, you’ll need to complete KYC verification. This stands for ‘Know Your Customer’ and each AUSTRAC registered crypto exchange must conduct these verification checks.
As part of these checks, you’ll need to verify your the following:
Email address: Email verification works by inputting the code sent to you via email.
Phone number: You’ll need to verify your phone number by inputting the code sent to you via SMS
Identification: The last check involves you taking a photo of your driver’s license or passport and submitting it to the exchange.
The entire process typically only takes 5 – 10 minutes to complete. Once you’re verified, you can then deposit funds into your account.
Step 4: Enable Two Factor Authentication (2FA)
Two-Factor Authentication (2FA) is a type of multi-factor authentication (MFA) that adds an additional layer of security to your crypto trading account.
2FA on cryptocurrency exchanges usually requires you to download an app such as Google Authenticator or Microsoft Authenticator. Every time you login to your exchange account using your username and password, you will then need to input the time-sensitive code that is available on your authenticator app.
It is vital that you set up 2FA on your account before you deposit any funds as it vastly increases the security of your account. If someone manages to get access to your password, your 2FA will act an additional line of defence
Step 5: Deposit AUD into your account
Once your verification has been passed through, the next step is to deposit funds into your account. Most exchanges will accept AUD deposits through a number of deposit methods. For instance, Swyftx allows you to deposits funds via the following options:
- Bank transfer
- Credit or debit card
Most crypto trading platforms allow free deposits, however, we advise researching this before signing up to an exchange. Depending on what your preferred payment method, the time it takes for the money to arrive in your account can vary. Most exchanges offer instant deposits on bank transfer methods (i.e. OSKO, POLi, PayID and BPAY).
Step 6: Buy crypto
When your funds have been successfully deposited into your account, the next step is to buy cryptocurrency! Most exchanges have a dashboard in which you can find the coin you’d like to buy on.
On Swyftx, you can click the “Trade” option which gives a search function in which you can search for the coin or token you’d like to buy.
For this example, let’s say you’d like to buy a Bitcoin (BTC). When you’re on the buy Bitcoin page you will see the live price of Bitcoin in Australian dollars (AUD). From here you’ll need to do two things
Choose the type of order: There are several different order types you can choose from:
- Market order
- Limit Order
- Stop order
- Recurring order
The market order is the most common type of order as it is instant and refers to trading crypto at its current price.
Choose quantity of crypto:
You can then choose the quantity of crypto you’d like to buy, or the AUD equivalent. For instance, you could input 0.01 BTC or $500.
Once you are happy, simply confirm your order, and the crypto will be immediately available in your own personal wallet.
What are the benefits of buying cryptocurrency?
Potential for huge returns
Bitcon has been the best performing asset of the last 12 years. When it was created in 2009, one Bitcoin was worth less than a cent. It is now priced at over $50,0000 AUD, and its peak was almost worth $90,000.
This pathed the way for several successful altcoins like Ethereum, XRP and Cardano. In recent years some altcoins have outperformed Bitcoin providing investors with huge gains. It’s these crazy returns that caught the eye of investors seeking to learn more about the industry and the revolutionary technology behind it.
Inflation often occurs when central banks or governments print more money which increases the total supply of money and typically results in rising prices.
Digital currencies like Bitcoin and Litecoin have been labelled by some experts as an inflation hedge. This is because they have fixed supply limits and are created by a process called mining. There are only 21 million Bitcoin available, once they’re all mined. In theory, this should mean Bitcoin is an inflation hedge against fiat currency (i.e. AUD) that do not have a fixed supply.
The graph below shows the decreasing purchasing power of the Australian dollar from 1966 to 2020. This means the AUD you have in your bank account will not hold value over time. Bitcoin and other cryptocurrencies can be seen as an alternative store of value.
Access to decentralised finance (DeFi)
Decentralised Finance (DeFi) refers to a framework of financial products that eliminates the need for a third party intermediary such as a bank. DeFi is considered a sub-sector of the cryptocurrency and blockchain industry. It has gained a lot of traction and adoption over the last few years.
Cryptocurrency provides an avenue to interact with DeFi protocols and partake in activities such as lending, borrowing, earning interest on coins and staking.
You can buy several DeFi coins and tokens on major exchanges like Swyftx, COinspot and Digital Surge. Some of the biggest DeFi coins include:
- Uniswap (UNI)
- Terra (LUNA)
- Avalanche (AVAX)
- Chainlink (LINK)
- Aave (AAVE)
Australia has been regarded as a crypto friendly country, however, it does have regulations in place to enhance the protection and security of consumers.
Digital currency exchange providers (DCEP), otherwise known as crypto exchanges, are required by Australian law to comply with Anti-Money Laundering and Counter Terrorism Financing (AML/CTF) law set by AUSTRAC.
Australian cryptocurrency exchanges are also required to have strict KYC policies in place meaning they must conduct identity verification checks on all their customers.
Bitcoin and other cryptocurrencies are not considered currency by the Australian Tax Office (ATO). Instead, they are considered property, which means they are subject to Capital Gains Tax (CGT). Stocks and property are also considered to be capital gains assets.
What is the easiest way to buy crypto?
The easiest way to buy crypto in Australia is from a secure crypto exchange. There are several crypto exchanges both Australian-owned and international. Each of these exchanges are unique in their own ways and are not a “one size fits all.” We recommend conducting thorough research.
How to store cryptocurrency
Once you have bought cryptocurrency you will then need a secure place to store it. Exchanges will typically have digital wallet software integrated into their trading platform meaning as soon as you purchase cryptocurrency, it will become immediately available as your personal exchange wallet. The issue with storing crypto in an exchange wallet is that you will not have ownership of the private keys. The private key is a cryptographic code that acts similar to a password for your crypto wallet.
There is a saying “not your keys, not your coins.” If you do not own your own keys to your wallet then you are entrusting a third party with your crypto. In this case the exchange is the third party. For this reason, it is generally recommended that you store your crypto assets in an external wallet.
There are two types of crypto wallets – hot wallets and cold wallets. Hot wallets are connected to the internet, whereas cold wallets are not. Cold wallets are considered to be more secure as they mitigate the risk of cyber theft or online scams.
Ledger is one of the most reputable wallets brands in the crypto industry. They offer hardware wallets which are a type of cold wallet. Hardware wallets look like USB and are used to store crypto. The Ledger Nano X is the most recent hardware wallet made by Ledger. It connects with bluetooth and has an LED screen, making it easy to use.
Cryptocurrency order types
When buying and selling crypto, there are several different order types. We have given a brief description of these orders types below:
A market order is the most common type of cryptocurrency order. This is an order to buy or sell a crypto asset at the best available price on the market. These are also referred to as instant orders, as the crypto will become immediately available in your account once you have purchased it.
A limit order is a type of crypto order to buy or sell a cryptocurrency at a set price. You can set a limit price at higher or lower the current price of an asset. For instance, if you’re trying to buy Ethereum (ETH) but you think the current price is too high, you can set a limit order to execute automatically when the price of ETH is lower.
Recurring orders are a type of order that you set to automatically buy or sell cryptocurrency over over intervals that you select. For instance, you could set up a recurring order to buy $100 of Solana (SOL) every week. This is convenient for people looking to dollar-cost average (DCA), an effective investment strategy that mitigates risk of making poorly timed trades.
Alternatives to buying crypto through an exchange
Even though buying cryptocurrency through an exchange is the most common way. There are a few alternatives. We have listed a few of these below.
Buy crypto at a Bitcoin ATM
There are several Bitcoin ATMs scattered around Australia’s biggest cities. A bitcoin ATM provides a fast and easy way to buy Bitcoin and other cryptocurrencies. These ATM’s allow you to use cash to buy crypto and send it to a walet of your choosing. This means you will have to set up a wallet, however you will not need to create an exchange account.
Check out this map radar of all the Bitcoin ATMs located in Australia.
Buy crypto with Paypal
PayPal allows US residents to buy Bitcoin online through the Paypal app. Unfortunately, this feature is not available to Australian residents, or anyone outside of the US.
Crypto exchanges like Crypto.com and Kucoin allow users to deposit money using PayPal, which can then be used to buy crypto in Australia.
Peer to peer exchanges
Peer to peer exchanges allow you to buy and sell crypto directly with another buyer/seller. Think of them as similar to platforms like Ebay, where buyers and sellers set prices and can negotiate on these prices.