How to Buy & Invest in Cryptocurrency in Australia

If you’re new to cryptocurrency and the world of investing, there are a few important things to consider. Cryptocurrency, like Bitcoin and Ethereum, is a high-risk form of investment, according to the Australian Government’s Moneysmart website. This means its value can be very volatile, often fluctuating by huge amounts within a short period of time. Moneysmart warns that you must be prepared to lose your entire cryptocurrency investment and also cautions you to be wary of scammers.

Most cryptocurrency transactions use a decentralised verification process, which means no server or central authority needs to check first with a bank or financial institution before clearing the transaction. The decentralised verification process creates the potential for banks to transfer funds to each other faster and at a lower cost than traditional methods. Traditional methods of sending money overseas such as international money transfers can come with fees, and sometimes have higher exchange rates to cover the administration costs of the financial institutions involved, and the decentralised verification process can do away with these.

This process does, however, come with unique drawbacks of its own. The decentralised nature of crypto can increase the risk of fraud or error due to its lack of centralised oversight and regulation. For example, if you accidentally sent cryptocurrency to the wrong digital wallet address, there are no protections in place for you, unlike a regular bank transfer which can often be reversed and you can recover your funds.

That being said, if you’re interested in how to buy crypto in Australia, here are five steps to help you get started.

1. Compare and choose an online exchange or trading platform to buy the cryptocurrency

If you’re looking to buy cryptocurrency, you will need an online app called a “wallet” to hold your currency. Most cryptocurrency exchanges allow you to create an account, then transfer fiat currency (such as Australian Dollars (AUD)) to buy cryptocurrencies such as Bitcoin or Ethereum. A growing number of trading exchanges allow you to create a digital wallet to store your cryptocurrency, as well as to buy and sell on the exchange.

Every person has their own preferences and trading goals, which will dictate which exchange might be suitable for them. Some people want the widest selection of coins, while others are looking for Australian-based and/or personalised customer support. Some may want advanced trading features while others are just after a straightforward way to buy crypto and let their investment grow.

When choosing an exchange, the main things you should keep in mind are:

• Company authenticity and platform security, such as being registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC)

• Ease-of-use, including the user interface

• Fees (like transaction, deposit and withdrawal fees), spreads and any hidden charges

• Customer-support

• Number of coins and crypto-assets offered

• Trading features, like market, limit and stop-loss orders

• Access to learning resources, such as tutorials and user guides

• Method of payment, like bank transfers, debit cards and Paypal

• The ability to buy coins directly with AUD (possible with most Australian exchanges).

Buying cryptocurrency in Australia used to be a complex process, but with the growing popularity of Bitcoin and cryptocurrency in general, those days now seem to be over. That said, with numerous Australian and international crypto exchanges on the market, choosing a suitable exchange for you can seem like a daunting task.

If you’re looking for a more in-depth guide you may be interested in our article on how to choose a cryptocurrency exchange.

If you’re in Australia and want to purchase crypto directly with AUD (and don’t want to pay conversion fees—which can be hidden), it can be worth signing up with a local exchange that offers this service. Asking a crypto exchange if they do via their live chat can be a helpful way of finding out while also testing the quality and authenticity of their customer support.

With all investing, particularly cryptocurrency, it’s important to take your time and do your research, which can mean reading customer reviews and looking for an exchange that is upfront about who they are and the fees they charge, as well as one that offers customer support—if you require it.

2. Before you invest in cryptocurrency: sign up and verify your email and identity

Once you’ve chosen the crypto exchange that suits your needs, signing up is generally a straightforward process. Choose your username and password, fill in your personal information and set up 2-factor authentication (2FA), which gives your account an added layer of security. From there, you’ll have to verify your email, and will then typically be prompted to verify your identity (and potentially provide proof of residence). This can be done by providing photo identification (ID), such as a driver’s licence, passport or proof-of-age card.

3. Add your bank account, select a payment method and make a deposit to begin investing in cryptocurrency

Once you have added your bank account and selected your preferred payment method (Poli and PayID/Osko are two common methods), you can make an AUD deposit into your account. This may or may not be free, depending on the fees charged by your chosen exchange.

4. Go to the ‘buy’ section and select the cryptocurrency you want to trade

Once your account has funds in it, you are free to purchase any cryptocurrency from the range on your chosen exchange. You can do so by going to the buy/trade crypto section and selecting the cryptocurrency you wish to purchase.

Although buying cryptocurrency is not necessarily a complex process, if you’re new to this type of investment, it can be worthwhile to start off small and learn more about the ins-and-outs of crypto trading before you dive in. It’s not advisable to put a significant amount of money into cryptocurrency, due to its price volatility and decentralised nature. Getting a better understanding of the lay-of-the-land and what certain coins and currencies do, including their market liquidity, may help you with your investments.

Read More: How to buy Bitcoin in Australia

5. Enter the amount of cryptocurrency you want, double-check the details and confirm your purchase

If you’re ready to buy some cryptocurrency, enter the amount (in AUD) that you want to invest, or how much of the coin you want to buy. It’s important to double-check that the details of the transaction are correct before confirming your purchase. After the purchase is complete, the cryptocurrency should appear in your digital wallet, or you may need to move it from the exchange to your chosen wallet, depending on how it functions.

If you’re planning on starting your crypto trading journey, it’s important to do your research and compare exchanges before choosing a trading platform, as well as read any relevant investment documentation, such as terms of service, risk warnings and user agreements, before making an investment.

Cover image source: alfernec/Shutterstock.com