header banner
Default

How to Purchase Bitcoin in Australia


Back in May 2016, you could get your hands on 1 BTC for around $US500, but at the height of the 2021 cryptocurrency bull market, you had to hand over $US69,000 to get one of these digital coins. That’s growth of nearly 13,700% over the course of nearly seven years.

However, there are two sides to every crypto coin’s success story, and Bitcoin is no different. Alongside impressive gains, BTC has also experienced devastating declines, especially of late. Take, for example, the recent trajectory of BTC, a veritable study in market volatility.

Despite hitting an all-time-high of $US69,000 16 months ago, Bitcoin has fallen dramatically, taking crypto investor portfolios with it.

In June 2022, Bitcoin fell below $US20,000 for the first time since November 2020, representing a drop of over 70% from all-time-high. By August 26, the leading cryptocurrency had recovered to $US21,000, according to CoinMarketCap, and hovered at around the $US20,000 mark before falling to $US17,600 on November 8 in the wake of news that leading currency exchange FTX was struggling with liquidity problems and was about to be bought by rival, Binance.

The news sent the price of BTC, and other coins, tumbling, with Bitcoin losing 14% in three hours. It recovered slightly to $US18,500, before plunging once again after Binance announced that it would not pursue the deal owing to “mishandled customer funds and alleged US agency investigations”. FTX has since collapsed, with some 30,000 creditors in Australia owed millions of dollars.

Despite the catastrophic collapse of multiple centralised exchanges in the wake of the FTX bankruptcy, 2023 has been a positive year for Bitcoin. January saw BTC rise from under $US16,000 to almost $US24,000 in the space of 25 days. A hawkish US federal reserve has stifled further growth, with BTC hovering around $US22,000 at the start of March 2023.

While Bitcoin remains the largest cryptocurrency by market cap, it nevertheless remains a highly volatile asset, and can swing as much as 10% in a single day. If you want to buy the coin, many experts recommend that you invest no more than a small percentage of your net worth in the cryptocurrency. And be prepared for the possibility that you may lose it all.

Related: Top 5 Crypto Scams (And How To Avoid Them)

How to buy Bitcoin (BTC) in 4 steps

VIDEO: What are the best ways to buy Bitcoin in Australia ?
Kalkine Media

1. Choose a crypto exchange

VIDEO: Buy & Sell Bitcoin in Australia for Beginners in Minutes 2022
Jason Pizzino

To buy Bitcoin (BTC), or any cryptocurrency, you’ll need a crypto exchange where buyers and sellers meet to exchange dollars for coins.

There are hundreds of exchanges out there, including multiple Australian-based exchanges, but as a beginner, you’ll want to opt for one that balances ease of use with low fees and high security.

Make sure to check if your exchange has a Bitcoin wallet built into its platform; if not, you’ll need to find one of your own. If you want to hold your crypto in a different wallet, you’ll need to sell your holdings and then re-buy them on a different exchange.

2. Decide on a Payment Method

VIDEO: How to buy Crypto in Australia using Coinspot - Everything you need to know!
Franka

After choosing an exchange, you have to fund your account before you can begin investing in Bitcoin. Depending on the exchange, you can fund your account through bank transfers from a current or savings account, PayPal, a cryptocurrency wallet, or even a credit or debit card.

If you are using your credit card to buy crypto, be beware of any fees that might be added to the cost of the transaction.

Because fees reduce how much money you can invest (and therefore also how much money you have to grow and compound), it tends to make sense to use electronic transfers from a bank account rather than other methods. In addition, if you use a credit card to buy cryptocurrency, it generally will count as a cash advance and be subject to a higher interest rate than you pay on regular charges. Remember that taking on debt to buy volatile investments is extremely risky.

You can decide which exchange is right for you by reading our guide to the top exchanges for Australians.

3. Place an Order

VIDEO: How to Buy Bitcoin or Crypto in Australia. Example on Binance
Binances Club

Once your account is funded, you can place your first order to buy Bitcoin. Depending on the platform you’re using, you may be able to purchase it by tapping a button, or you may have to enter Bitcoin’s ticker symbol (BTC). You’ll then have to input the amount you want to purchase.When the transaction is complete, you will own a portion of a Bitcoin.

That’s because it requires a large upfront investment to buy a single Bitcoin now. If Bitcoin’s current price was $US30,000, for example, you’d need to invest that much to buy a full Bitcoin. If you invested less, say $US1000, you’d get a percentage, in this case 3.33%, of a single Bitcoin.

4. Select a Safe Storage Option

VIDEO: How to Buy Bitcoin & Crypto in Australia on CoinSpot 2024 [Step by Step Tutorial]
Bryan Invest

Many crypto exchanges have an integrated Bitcoin wallet, or at least a preferred partner where you can hold your Bitcoin. Some people, however, do not feel comfortable leaving their crypto connected to the internet, where it may be easily stolen by hackers.

Some major exchanges have private insurance to reimburse clients if this happens, and increasingly, they’re also storing the majority of customer assets offline in so-called ‘cold storage’. Yet, things can and do go wrong. Before it collapsed, FTX was considered one of the leading centralised exchanges in the crypto space. Despite this, millions of FTX users have been left empty-handed after the exchange declared bankruptcy.

Ideally, investors should store their crypto in their own wallet, separate from their exchange account. There are multiple types of wallets, from custodial, software and hardware wallets, some more secure than others. The security of custodial wallets is typically no different to what is provided by a centralised exchange, as there is still a third party holding your assets. Software wallets can be more secure, as there is no trusted third party, however, hackers can potentially exploit the wallet’s code as the private keys are still stored online.

The most secure option for storing Bitcoin is to use a hardware wallet. These wallets are physical devices that keep your private keys offline, ensuring that your digital assets cannot be moved without your physical verification on the device. For investors with a substantial amount invested in Bitcoin, it is highly recommended that a hardware wallet is used. It is important to keep in mind that if you move crypto from an exchange, no matter which wallet type you use, you may have to pay a small withdrawal fee.

Invest Smarter with eToro

Invest with a crypto brand trusted by millions. Buy and sell 70+ cryptoassets on a secure, easy-to-use platform

Own Crypto

Crypto assets are unregulated & highly speculative. No consumer protection. Capital at risk.

Selling Bitcoin

VIDEO: How To Start: Buy/Sell & Trade Crypto On Binance Australia 2022 | (Step by Step Tutorial)
Personal Finance with Ravi Sharma

When you decide you’re ready to sell your Bitcoin, you can place a sell order through your exchange, much like you did when you originally purchased it. Most exchanges offer multiple order types, so you can decide to sell only when Bitcoin reaches a certain price, or you can place an order that goes through immediately.

You can choose to sell your entire holdings of Bitcoin or only a specified amount. Once the sale goes through, you can transfer the money to your bank account. Your exchange, however, may have a holding period before you can make a transfer back to your bank account.

This isn’t cause for concern; it simply takes some time to make sure the transactions clear. When you sell your Bitcoin, you may make a profit and you may therefore be on the hook for capital gains taxes with the Australian Tax Office (ATO) so make sure to keep track of your profits. There is crypto tax calculation software available to help investors with multiple transactions when it comes to tax time, and you can also read our guide to crypto and tax in Australia.

Should You Buy Bitcoin?

VIDEO: How to Buy Crypto in Australia using Swyftx in 2023 - Everything you Need to Know!
Franka

When Bitcoin’s price is skyrocketing, investing in the popular cryptocurrency can be tempting. A number of Australian crypto exchanges have insisted the recent fall in prices is cyclical, and that newer investors needed to ride out the down-turn in order to reap rewards. But while crypto clearly has the potential to be a lucrative investment long-term, you should be extremely cautious.

Even if you decide to go ahead, its volatility has led to many experts recommending that you do not allocate a large percentage of your funds to buying it.

Treat it, in other words, as a high-risk venture and consider your own financial position, and what is best for you, before deciding whether or not to invest.

This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency as an investment class. 

Related: How to Buy Bitcoin in 5 Minutes

Frequently Asked Questions (FAQs)

VIDEO: How To Invest In Crypto For Beginners [Full Guide]
Lark Davis

How do I buy Bitcoin online?

VIDEO: The EASIEST Way To Buy Crypto! (How Buy Crypto for Beginners)
Crypto Banter

One of the safest and easiest ways to buy Bitcoin online is to seek out a registered exchange in Australia, such as Swyftx, Binance AU, or Bybit — to name just a few. These exchanges will require you to set up an account, similar to opening an account with a bank, and then you will be asked to verify your identity and set up a payment method. To protect your money, look for exchanges with robust security measures, and check whether they have an insurance fund and cold wallet storage.

How do I buy Bitcoin with PayPal?

VIDEO: Bitcoin Market Outlook: Is This Time Different?
The Altcoin Analyst

You cannot buy, hold or sell Bitcoin directly via PayPal in Australia, unlike in the UK or US.

What does this mean for local crypto investors? If you have your heart set on buying BTC with  PayPal then you will need to go via a crypto exchange, as some will allow you to deposit funds into your account from PayPal that you can then use to buy Bitcoin.

You can read our guide for more information on using PayPal to buy BTC.

Can I buy just one Bitcoin?

VIDEO: Cathie Wood Reveals Why She SOLD Off Her Entire Bitcoin Holdings - Bitcoin ETF (2024)
Jamie Tree

You sure can, but it’s going to cost you. As of late August, 2022, the price of a single Bitcoin was $US21,000. That is a lot of money to spend on one coin that, as we have outlined, can swing wildly. Most smaller investors opt to buy fractions of Bitcoins, making the process a lot cheaper. You can do this through a dedicated crypto broker or an exchange.

Why is Bitcoin falling in value?

VIDEO: THE FREAKY TRUTH ABOUT THE BITCOIN ETF APPROVAL...
Money Maker - Avi Lev

Since its inception, Bitcoin or BTC has fallen and risen by huge swings underscoring the volatile nature of cryptocurrency more broadly. The most recent dip below the psychological floor of $US 20,000 was due to the collapse of FTX.

What is the safest way to store Bitcoin?

VIDEO: Fake Bitcoin ETF Rejection dumps Bitcoin! Elon builds DOGE payment system for Tesla.
Crypto news

Without a doubt the safest way to store Bitcoin, or any of your crypto, is via a cold storage wallet: essentially a hard drive or USB that is not connected to the internet so cannot be accessed by hackers. The downside of this is that it’s harder to trade quickly—so your investment becomes more illiquid—but for many that is a price to pay for peace of mind.

How do I buy 0 in Bitcoin?

VIDEO: SOLANA Price Prediction “SOL Is Going To $2200!” Top 3 Crypto To Buy NOW! (Don’t Miss This)
My Financial Friend

Buying $100 worth of Bitcoin is extremely simple via a centralised exchange.

  1. Find a reputable cryptocurrency exchange: There are various cryptocurrency exchanges available, but it’s essential to do your research and pick a reputable one.
  2. Create an account: Once you’ve chosen an exchange, create an account by providing your email address, a strong password, and any other required personal information. Most exchanges will require you to complete a “Know Your Customer” (KYC) check. Follow the instructions to submit your identification documents, which typically include a government-issued ID and proof of address.
  3. Deposit funds: Use bank transfer, PayPal, credit or debit card to deposit funds to the exchange. In this case, the amount is $100.
  4. Buy the Bitcoin: Locate the Bitcoin market on the exchange platform and select “buy” or “trade.” Enter the amount of Bitcoin you wish to purchase, in this case, $100. Before continuing, double-check the transaction details to ensure they are correct.
  5. Withdraw your Bitcoin: Once your Bitcoin is in your exchange account, you can withdraw it to your personal Bitcoin wallet or leave it in the exchange’s wallet. If you plan to hold the Bitcoin long-term, transferring it to a hardware wallet is generally recommended for better security.

How much should I put in bitcoin to start?

VIDEO: How to Buy, Use, and Spend Bitcoin | Mashable Explains
Mashable

Deciding how much to invest in Bitcoin is a personal decision that should be based on your financial situation, how much money you want to risk, and your overall investment goals.

Some experts recommend investing no more than 5% to 10% of your investable assets in cryptocurrency, such as Bitcoin. For example, if you have $10,000 available to invest, you should consider only investing $500-$1000. This is because the cryptocurrency market is highly volatile and unpredictable, and the value of Bitcoin can fluctuate dramatically in a short amount of time.

It’s wise to start with a small investment and only increase your holdings when you become more comfortable and experienced with the market’s movements.

How much will I get if I put dollar into bitcoin?

VIDEO: How To Buy Bitcoin For Beginners (Step By Step Guide)
The Cryptoner

If you invest $US1 in Bitcoin at the current price of $US22,000, you will receive approximately 0.000045 BTC. The exact amount will vary by exchange and can fluctuate depending on the price of BTC at the time. Fees charged by the exchange can also reduce the amount of Bitcoin you will receive.

Is it still worth putting money into bitcoin?

VIDEO: How to Buy Bitcoin (in 2 minutes) - 2024 Updated
99Bitcoins

As with any investment, the decision to put money into Bitcoin should be based on your financial situation and how much you are willing to risk. In January of 2023, Bitcoin rose almost 50%, proving it still has the potential to produce substantial returns. However, it’s important to remember that the cryptocurrency market is highly volatile, and Bitcoin has fallen almost 70% from its all-time high price in 2021, causing substantial losses for some investors.

Some experts believe that Bitcoin has long-term potential as a store of value and a hedge against inflation. In contrast, others caution that it remains a speculative asset with no inherent value. Ultimately, the decision to invest in Bitcoin is a personal one, and should only be made after doing your own research.

How do you cash out Bitcoin?

VIDEO: How To Buy Bitcoin For Beginners | Step by Step
Marko - WhiteBoard Finance

Cashing out Bitcoin involves selling your holdings for fiat currency, such as AUD. For exchanges that support Australian investors, cashing out your Bitcoin is typically a simple process:

  1. Log in to your exchange: Log in to your exchange account, and navigate to the sell section. If you hold your Bitcoin in a personal wallet, transfer the holdings to the exchange.
  2. Sell your Bitcoin: Enter the amount of Bitcoin you want to sell, and confirm the details of your order. Be sure to thoroughly review the details of your sale, including the amount you are selling, the fees and the current price of BTC, before confirming the sale.
  3. Withdraw your funds: After completing the sale, withdraw your funds to your bank or PayPal account. Note that some payment methods may take longer to process than others.

Sources


Article information

Author: Joseph Velez

Last Updated: 1704337681

Views: 735

Rating: 4 / 5 (83 voted)

Reviews: 87% of readers found this page helpful

Author information

Name: Joseph Velez

Birthday: 1974-05-07

Address: 190 Kurt Lane, Moodyfort, NY 47660

Phone: +3705831452746427

Job: Security Guard

Hobby: Gardening, Skydiving, Card Games, Scuba Diving, Fencing, Skiing, Badminton

Introduction: My name is Joseph Velez, I am a multicolored, transparent, accomplished, unreserved, intrepid, forthright, sincere person who loves writing and wants to share my knowledge and understanding with you.