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November 7, 2023

How to Buy & Invest in Cryptocurrency in Australia: A Step-By-Step Guide

How to invest in cryptocurrency Australia
Katya Richardson

Written by Katya Richardson

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Are you considering delving into the world of cryptocurrency investment, yet finding yourself uncertain about how to make your first purchase or initiate your investment journey? Rest assured, you’ve landed in the right place.

Cryptocurrencies have garnered significant attention among Australians, primarily due to their impressive investment yields. It’s no surprise that many individuals are keen on setting up digital currency exchanges nowadays. If you’re new to the realm of cryptocurrencies and feeling somewhat overwhelmed, don’t worry.

The world of crypto may initially appear intricate and intimidating, but in reality, grasping the mechanics of exchanges and the fundamental principles behind your investments requires some initial groundwork and research before you take the plunge.

To assist you in embarking on your crypto journey, Hiddup will share a comprehensive, step-by-step guide to help you navigate the process of purchasing and investing in cryptocurrency.

Why Buy Cryptocurrency? The Australian Perspective

The latest Swyftx survey on digital assets in Australia reveals that the adoption of cryptocurrencies continues to climb. Australia now boasts the highest rate of cryptocurrency adoption (23%) among developed nations and ranks eighth globally. Currently, an estimated 4.5 million Aussies are crypto holders.

Based on a Forbes Advisor survey, many Australians invest in cryptocurrency for different reasons. Half of them answer that it is an easy way to start investing, especially with simple mobile apps and feel it’s simpler than traditional investments. Others are motivated by their belief in what cryptocurrency stands for and like the ease of accessing their money and the rest of them answer that they have seen better returns with crypto than with traditional investments.

So which cryptocurrencies are popular among Aussies? Bitcoin is the top pick in Australia because it was the first crypto, everyone knows it, and it’s easy to buy and sell. It’s also seen as a safe place to store value, like gold, and many big investors are into it. Plus, there’s only a limited amount, which can make it more valuable over time.

Crypto experts believe that Bitcoin, currently around $30,000, has a chance to bounce back or drop to $28,000 if it falls below that level. There’s optimism about Bitcoin’s future due to the upcoming 2024 Bitcoin halving event, which occurs every four years and historically has boosted Bitcoin’s price by reducing mining rewards and tightening supply.

How to invest in cryptocurrency Australia

Although there are compelling reasons to invest in cryptocurrencies, such as their potential for high returns and ease of access, it’s important to weigh these against the risks involved. For a more in-depth look at both sides of the coin, consider reading our article on the Advantages and Disadvantages of Cryptocurrency.

Picking the Right Exchange: An Australia Focus

A cryptocurrency exchange is a platform where buyers and sellers meet to trade cryptocurrencies. These exchanges typically offer modest fees, but their interfaces can be intricate, featuring a variety of trade options and some rather sophisticated performance charts.

It’s important to remember that each individual brings their own unique set of preferences and trading objectives into the equation. These personal factors ultimately guide the choice of exchange. Some people seek a broad array of cryptocurrencies, while others aim for the convenience of an Australian-based platform with tailored customer support. The primary factors to consider while selecting an exchange are:

  • Security: Ensure the exchange has robust security measures, like two-factor authentication (2-FA) and secure fund storage.
  • Regulation: Check if the exchange is registered with relevant authorities, such as AUSTRAC, KYC/AML, etc., for added trust.
  • Available Cryptocurrencies: Choose an exchange that offers the cryptocurrencies you want to trade.
    Fees: Compare fee structures, including trading, withdrawal, and deposit fees.
  • Payment Methods: Look for exchanges that support various payment options.
  • Trading Features: Assess advanced features like margin trading and order types if you’re an experienced trader.
  • Reviews and Reputation: Consider user feedback and the exchange’s reputation.
  • Additional Services: Some exchanges offer services like staking and lending.

Getting Started: Account Creation and Verification

Once you’ve decided on an exchange, creating a crypto account is simple and straightforward, and most exchanges use a similar procedure. Here is the procedure:

1. Signup or Account Creation.

Firstly, newcomers should register with the exchange, which sets up a user account and crypto wallet for easy transactions.

Users sign up by providing their email address, selecting a password, and agreeing to the exchange’s terms and conditions.

Passwords should be sufficiently strong to keep your account information and any money in your wallet secure. many exchanges offer password guidance, so it’s wise to heed their suggestions.

2. Secure your account.

Users should update their account details by going to the ‘Security’ section in ‘My Account’ to keep the account safe. Turning on email and/or mobile verification for transactions will ensure users receive notifications about their account activities.

Exchange apps also encourage their users to set up two-factor authentication. This adds extra security to their accounts by asking for a special, time-sensitive code (sent to their mobile or email) every time they log in.

3. Verification or KYC process.

There are three common KYC in exchange apps. Here are the three KYC:

  • Email: Certifies the validity and legitimacy of an email address. It is often used for various objectives, including spam prevention, data accuracy, and email deliverability.
    The user will enter their email address, and they will send you a verification email to your registered email address. Then, click on that link to finish the process.

  • Phone Number: To verify the validity and authenticity of a particular phone number. It is frequently used for security, authentication, and communication.
    The user enters their phone number, and they will send you an OTP to your registered phone number. To finish this process, enter the OTP into the blank spot on your screen.
  • ID: It involves verifying that a person’s personal information matches the information on an official identification document, such as a driver’s licence, passport, or national ID card and also exchanges comply with local laws.
    Users complete their ID verification by entering the information from their photo ID and verifying their address. Addresses are crosschecked against this database, thus Australian account holders should input the address most recently registered with the Australian Electoral Commission (AEC).

These are the simple three procedures of signing up for a crypto exchange account, but please remember that each crypto exchange app may have its own unique sign-up process. So, be sure to read and complete all the details carefully.

Navigating the legalities of cryptocurrency can be complex. To ensure you’re fully informed about the legal framework surrounding your investments, read our comprehensive guide on Is Cryptocurrency Legal in Australia, which will clarify the legal standing of cryptocurrencies in the country.

Preparing to Buy: Funding Your Account & Payment Method

To acquire cryptocurrencies, you must first ensure there are funds available in your account. You can add money to your crypto account either by connecting your bank account or by initiating a payment using a debit or credit card (please be cautious of potential elevated fees associated with credit card payments).

After creating your account and completing identity verification (KYC), log in to your account. In your exchange account, navigate to the “Deposit” or “Funding” section. When depositing money into your cryptocurrency exchange account, you’ll have several payment methods to choose from:

  • Common options include bank transfers, which may take a few business days but are secure.
  • Credit/debit card payments are quick and convenient, though they may involve higher fees.
  • For faster deposits, you can also use newer payment methods like PayID and Osko transfers.

Depending on your chosen payment method, you will need to provide the necessary details, like bank account information for bank transfers or card information for card payments. Specify the amount you want to deposit, review the details carefully, and confirm the deposit. The processing time for deposits can vary, so monitor your account for confirmation. Once your funds are available, you can start trading cryptocurrencies on the exchange.

Making the Purchase: Steps to Buy Bitcoin

Here are the steps to locate Bitcoin on your chosen exchange, specify the amount you want, review transaction fees, and confirm the purchase:

  1. Sign In or Create an Account: Begin by logging into your preferred cryptocurrency exchange or setting up an account if you haven’t already. You may also need to go through identity verification steps during the sign-up process.
  2. Deposit Funds: Ensure you have enough funds in your exchange wallet. If not, deposit the desired amount using your preferred payment method, which could be a bank transfer or credit card.
  3. Search for Bitcoin: Use the exchange’s search or trading pair feature to locate Bitcoin, usually referred to as BTC.
  4. Choose a Trading Pair: If the exchange provides multiple trading pairs with Bitcoin, select the one that suits your needs, like BTC/USD or BTC/EUR.
  5. Place an Order: Decide between two types of orders:
    • For a “Market” order, you’ll buy Bitcoin at the current market price. Just specify how much you want to purchase.
    • Alternatively, with a “Limit” order, you can set the price at which you wish to buy Bitcoin and define the quantity you want.
  6. Review Transaction Fees: Take a look at the transaction fees associated with your purchase. Remember that these fees can differ from one exchange to another, so it’s essential to understand the charges you’ll incur.
  7. Confirm Your Purchase: Carefully review the details of your order, including the amount and fees. If everything looks good, go ahead and confirm the purchase. Some exchanges might ask for a second confirmation to prevent accidental transactions.
  8. Secure Your Wallet: For added security, consider transferring your purchased Bitcoin to a secure cryptocurrency wallet, especially if you plan to hold it for the long term. Private wallets offer greater protection compared to keeping your assets on the exchange, which could be vulnerable to hacking attempts.

Keep in mind that the specific steps might vary slightly depending on the exchange you’re using. Always ensure that you’re using a reputable and secure exchange and adhere to their guidelines for buying and storing cryptocurrencies.

Storing Your Bitcoin Safely

How to invest in cryptocurrency Australia

If you want to transact on cryptocurrency like Bitcoin or others, you will first need a palace to store all your crypto safely. This storage location is called a cryptocurrency wallet. There are three different types of wallets:

1. Hardware Wallets

In the world of blockchain tech, a hardware wallet is a type of crypto wallet that secures private keys on a physical device, often like a USB drive. These hardware wallets are a bit of a mix between ‘hot’ and ‘cold’ wallets.

Hardware wallets help you stash your private keys safely offline, where hackers can’t get at them. Plus, many hardware wallets allow you to confirm blockchain transactions by simply plugging the device into your computer.

Once the transaction is done, you can unplug it, and you don’t have to worry about it being constantly online, which can make a wallet an easy target for threats. There are a couple of the big names in hardware wallet providers, including Ledger and Trezor.

2. Software Wallets

Aussies love using software wallets in the crypto world. These wallets are always online, making it super easy to get into DeFi action. You can borrow, lend, stake, swap tokens, and trade on DEXs with ease.

But there’s a risk. Since these wallets are always online, they’re like open doors for potential hackers. And it’s not just online risks, if you lose a device with your wallet on it, someone could easily hack and take your crypto. So, always lock your device with a strong password to stay safe.

There are three main types of software wallets:

  • Web Wallets (Browser-Extension Wallets): Web wallets are like browser add-ons, and they store their software in your web browser, for example, MetaMask. To trade crypto on an exchange, you just visit the exchange’s site and connect your wallet. The deal is made on the exchange but checked on your wallet. These browser extension wallets are the speediest and easiest way to use blockchain tech. They are fast and user-friendly but can be risky due to malware.
  • Mobile Wallets: In a mobile wallet, your crypto keys are kept on your real phone. This kind of wallet comes as a mobile app. For example, Coinjar and Swytfx. You can also connect with decentralized apps through them.
  • Desktop Wallets: Similar to mobile wallets, but your private key is stored on your computer. For example Exodus.

For extra security, use two-factor authentication for both mobile and desktop wallets.

3. Exchange Wallets

Exchange wallets are crypto wallets provided by cryptocurrency exchanges. They’re handy for trading and managing your crypto right on the exchange platform. It’s like having a wallet tied to your exchange account, making it easy as pie to buy, sell, and swap cryptocurrencies.

But keep in mind, that these wallets are usually less secure than other types, such as hardware or software wallets, because they’re controlled by the exchange and can be a target for hackers. Many users move their assets to more secure wallets when they’re not in the middle of a trading frenzy.

How to invest in cryptocurrency Australia

Conclusions

In this article, we’ve navigated the exciting terrain of cryptocurrency investment in the Australian context. Our journey has unveiled the motivations behind Australian interest in cryptocurrencies, from diversifying investment portfolios to embracing digital innovation.

We’ve emphasized the importance of selecting secure and compliant exchanges, as well as the significance of identity verification and financial planning. While you embark on your cryptocurrency journey, keep in mind that each exchange may have unique procedures, so choose carefully.

We’ve also provided a detailed roadmap for buying Bitcoin and highlighted the crucial aspect of secure storage. This guide aims to empower people to participate in the cryptocurrency landscape with confidence, understanding the nuances and necessities of responsible investment. With a firm foundation in security, compliance, and informed decision-making, this guide equips you for a successful cryptocurrency investment journey in Australia.

The information presented on this website is general information only. It should not be taken as constituting professional advice from the website owner – Hiddup PTY LTD (Hiddup). Any information regarding past performance and returns contained on this website should not be construed or interpreted as a prediction or opinion as to future performance and returns. Hiddup is not a financial adviser. All views and observations expressed by Hiddup on this website are for information purposes only, are general in nature and should not be treated as investment or financial advice of any kind.