Bitcoin has attracted increasing attention in 2021 as cryptocurrencies gain traction globally. Here's how to buy bitcoin in Australia.
Investors looking for decentralised assets (and potentially major gains) in a post-COVID-19 Australia are turning in droves to cryptocurrencies.
Bitcoin in particular is getting Aussies excited after its price hit record highs in March 2021, and again the next month. As a finite resource, its volatility is proving exciting for many market watchers.
For those interested in jumping into the space, the Investing News Network has put together a step-by-step guide on how to start buying bitcoin in Australia — and how to stay safe while doing so.
Buying bitcoin in Australia
Bitcoin is a decentralised digital cryptocurrency not issued under the authority of a government.
As a digital unit of account, each bitcoin transaction is made online via a peer-to-peer network. Transactions are then collected into blocks, with new blocks attached to previous blocks — hence the term "blockchain."
More and more places in Australia are accepting bitcoin as payment, although this is considered somewhat risky due to its price fluctuations. Many enthusiasts prefer instead to simply hold bitcoin for the long term.
There are a few different ways to purchase bitcoin in Australia. These include buying from a bitcoin cryptocurrency exchange, using a bitcoin broker or choosing to use a peer-to-peer exchange.
Here's a quick look at how to get started:
- Pick your platform — Start by selecting the platform you wish to use to purchase bitcoin. There are various options available in Australia, each with different costs associated with them. Researching and comparing platforms will be key here in order to select the features that will best suit your personal situation.
- Register your account – Register your account with your chosen cryptocurrency exchange. Typically creating your account will involve verifying your email address and identity.
- Determine and deposit your funds — After verifying your account you can choose from a range of payment methods to begin depositing funds. Options could be a bank transfer, or you could use a debit card or credit card. Navigate yourself to the buy or purchase section on the website. There is usually a choice between the amount you want to buy, or the amount you want to spend.
- Finalise your purchase — Check over your details and complete your purchase. Congratulations — you've purchased bitcoin. Your bitcoin will typically be sent to your account.
How to safely hold bitcoin in Australia
After making a bitcoin purchase, how can it be stored? Buyers have a few choices.
Use a crypto wallet
In Australia alone there are reportedly more than 70 cryptocurrency wallets on the market. A crypto wallet, sometimes known as a digital wallet, is a software program that allows users to store and make transactions with cryptocurrencies like bitcoin.
A crypto wallet has a private key that enables the owner to access any funds stored in the crypto wallet; it also has a public key that functions like a bank account number, enabling other people to send digital funds.
Use a hardware wallet
Sometimes called "cold storage," a hardware wallet stores cryptocurrencies completely off the internet. These devices look a little like a USB stick, and are used to store users' private keys for bitcoin.
In order to trade cryptocurrencies held in a hardware wallet, owners must move the coins to an exchange, which comes with some security risks.
Hold on an exchange
If setting up a crypto wallet is too much of a hassle, it's also possible to store cryptocurrencies in a wallet connected to the same exchange the coins were purchased from.
This option isn't usually recommended by crypto experts as it means the coin owner doesn't control the wallet's private key — meaning they don't completely own their cryptocurrency. It also makes bitcoin holders a target for thieves, and since bitcoin is a decentralised currency there is little hope of recovering it once stolen.
Steps for selling bitcoin in Australia
Bitcoin is a compelling purchase, but sometimes an investment reaches its end.
When it's time to cash out, bitcoin holders must first decide whether they want to sell their bitcoins for Australian dollars, or trade them for another cryptocurrency. Here's how the process can be completed:
- Log in to your account on your preferred cryptocurrency exchange.
- Deposit your bitcoins into your cryptocurrency account.
- Select the amount to sell and finalise the process.
- Either withdraw your Australian dollars or transfer your new digital currency into your crypto wallet.
Alternatively, if you have an extremely large amount of bitcoin to trade or sell, you can use one of 32 bitcoin ATMs around Australia to quickly make the change to cold, hard cash.
For more on bitcoin in Australia, click the link below:
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Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.