How to Buy
Australia in 2023
Cryptocurrencies are an exciting investment opportunity. Gradually, they have gained acceptance, and more businesses continue to accept them as a form of payment. Thanks to governments such as Australia officially approving the currency, people have started using them more frequently. Cryptocurrencies can change the financial world and partially draw away financial control from banks and governments.
If you’re looking to buy cryptocurrency in Australia, read on to find our simple guide below.
We recommend using Swyftx because it’s so easy to sign up.
How To Buy Crypto in Australia:
- Register for an account with Swyftx
- Enable two-factor authentication
- Confirm your identity
- Deposit funds into your new account
- Click the “Trade” link
- Search for your favourite crypto and click on “Buy coin”
- Enter how much of the crypto you want to buy
- Review the details of the transaction
- Click “Buy”
Table of Contents
Cryptocurrency in Australia
Cryptocurrencies and exchanges are legal in Australia. The nation has been making progress in implementing cryptocurrency regulations over the past few years.
A common misconception exists that cryptocurrencies have only been around about a decade. The truth is that the idea of digital currencies dates back to the late 1980s when talks of decentralizing the financial system were gathering strength.
However, developing the right technology to support a fully integrated peer-to-peer payment system has not occurred without difficulties. It took software engineers more than two decades to overcome most of the challenges.
Bitcoin came into existence in 2008. However, financial traders were slow to dive into cryptocurrency trading because the industry was too volatile, and the stakes were too high.
Crypto trading in Australia was no different. It was not until 2017 that Australia began to show a growing interest in cryptocurrency trading, and traders began to invest in the market. According to analysts, the shift in attitude in cryptocurrency trading is mainly attributable to a change in Australian regulatory frameworks.
How the Australian Government Has Dealt With Cryptocurrency So Far
In the early years after Bitcoin emerged, these early cryptocurrencies fell under Australia’s goods and services tax (GST) and were subject to double taxation. In 2017, the Australian government declared cryptocurrencies legal and classified them as property subject to Capital Gains Tax (CGT). The change in tax treatment shows the Australian government’s shift in approach to the crypto issue.
In 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced new crypto regulations. The more robust exchange regulations now in place require exchanges operating in Australia to:
- register with AUSTRAC
- comply with government reporting obligations
- identify and verify users, and maintain records
Going forward, unregistered exchanges will be subject to financial penalties and criminal charges.
The Australian government’s change in approach towards the crypto industry indicates the country’s progressiveness and initiation of the digital currency market into the country’s economy,
How to Invest in Cryptocurrencies in Australia
Investing in cryptocurrency is simple. Typically, cryptocurrency trading involves buying and selling underlying coins via an exchange or speculating on whether the price of cryptos will go up or down via a CFD trading account.
In this post, we’ll focus on investing via an exchange. All you need is a solid investment strategy and a reliable online platform.
If you’ve never invested in cryptocurrency before, your best bet would be to start with a fiat-to-crypto exchange that allows you to make the first deposit in fiat currency. If you choose a crypto-to-crypto exchange, you would first need to use a different payment provider to convert fiat into crypto. You want to avoid going back and forth between online platforms to avoid putting your money at greater risk.
It helps to know the difference between a centralized and decentralized exchange. Centralized exchanges offer escrow services and either match buyers and sellers of crypto or provide the coins themselves. They also boast high levels of security. Some of the best crypto exchanges, such as Swyftx, are centralized.
A decentralized exchange, on the other hand, is a peer-to-peer platform that allows traders to sell, purchase, and exchange cryptocurrencies anonymously. Everything is arranged between the individuals making the deal, and there’s no central authority in charge of the transactions. You can easily find a payment method that works for you because different sellers accept different payment methods.
If you’re not sure whether to go with a centralized or decentralized exchange, consider your top priority. A centralized exchange works well if you don’t mind compromising your privacy to use an exchange you can trust.
Most licensed centralized exchanges comply with KYC and AML regulations. If you care about your privacy and don’t intend to keep your funds online, you can always go with one of the decentralized platforms.
People invest in cryptocurrency for various reasons. Many investors believe that digital currency is the future of our financial system and that it will replace traditional fiat currencies.
And that’s why some investors speculate on crypto prices and invest in them early on. When either the cryptocurrencies become more mainstream or their prices go up, they sell their share of coins for a profit.
You can also find a growing community of digital currency enthusiasts who prescribe to the digital coins philosophy. They believe that our current financial system’s only way to prosper is to decentralize and digitize it, and cryptocurrencies offer just the right level of decentralization, anonymity, and transparency.
Despite the upsides, be aware of the volatile nature of the crypto industry. Before getting involved, be sure to decide on an investment strategy and understand your target market. It’s crucial to define when you’ll exit a trade.
Diversify your investment portfolio instead of putting all your eggs in one basket. This is an especially useful maxim for beginners.
Different Types of Cryptocurrencies
The most popular cryptocurrencies are Bitcoin and Ethereum. Bitcoin is the world’s first cryptocurrency and the largest digital asset by market capitalization. Now that more and more merchants accept Bitcoin as a payment method, this digital asset is also useful as a store of value for buying goods and services. Similar cryptocurrencies include Bitcoin Cash and Litecoin.
Ethereum, considered the building block of the blockchain economy, is the second-largest digital asset by market capitalization and used to build other applications and ideas such as Enjin Coin and Chainlink. Plenty of investors have their eyes on Ethereum as it drives the Ethereum smart contract and DApp platform.
Other players in the crypto world include Ripple (XRP), Dogecoin, Zcash, Dash, Monero (XMR), Stellar (XLM), EOS, and more.
The Positives and Negatives of Investing in Cryptocurrency
High upside potential: One of the most significant advantages of investing in cryptocurrency is the enormous earning potential that it offers. People speculating on the price of cryptocurrencies can buy low and sell high for a profit.
Transparency: Most cryptocurrency runs on blockchain technology, which posts all transactions on a public ledger that is verifiable at any time. However, not all cryptos run on blockchain.
Liquidity: Liquidity refers to the ease with which you can buy or sell an asset or instrument with minimal slippage. Most major cryptocurrencies have a marketplace that allows you to buy or sell your investment with minimal slippage or cost.
Mismanagement concerns: Not all ICOs (Initial Coin Offerings) are created equal. Some are startups backed by highly competent teams with a clear goal and vision, while others are nothing more than companies running shady operations.
Volatility: Cryptocurrencies have moved up and down aggressively over the past few years due to the uncertainty that surrounds most cryptos.
Security concerns: Security breaches should be top-of-mind for any existing or potential crypto investor. Since virtual currencies are digital, you always run the risk of being compromised or hacked by cybercriminals.
Even the top crypto exchanges would not ensure virtual tokens if your account were to be taken over or hacked. You access cryptocurrencies via private keys as part of a digital wallet, so protecting your wallet and key from cybercriminals is a primary goal.
The Different Methods of Storing Cryptocurrency
Once you have gained some knowledge of the crypto market, it’s up to you to work out an investment strategy and choose a cryptocurrency that aligns with it. After doing your research and purchasing the cryptocurrency you’re after, you’ll need a suitable wallet to keep the coins safe.
Most reputable crypto exchanges include a digital wallet as part of their features. If you’ve already signed up for an account with one of these platforms, they can automatically transfer your purchased coins to your wallet balance.
In case the exchange you choose doesn’t provide a wallet, you can always register for a third-party wallet on the internet. The only disadvantage is the inevitable risk that comes with storing your funds online. Regardless of how strong their security measures are, it’s advisable to use online wallets only as a temporary solution.
The safest alternative is to invest in a hardware wallet, a USB-like device that keeps your money secure with a private key that only you can access. The wallet doesn’t store your coins since cryptocurrencies aren’t physical objects. Still, the fact that it remains disconnected from the internet lowers the chances of its being affected by hackers or malware.