How to Buy Bitcoin in Australia

When Bitcoin was introduced in a 2008 whitepaper by an anonymous author, the world changed. Digital currencies have come to rival traditional paper currencies as a legitimate transactional medium. Over a decade later, the influence and reach of Bitcoin and other digital coins continues to grow at a rapid pace.

Thanks to the trend towards digital currencies, many investors are excited about buying Bitcoin and holding it for the long-term. To get in on the growth of Bitcoin, you’ll need to buy some coins. Thankfully, there are plenty of online brokers that offer investors access to digital currencies.

In this guide, we’ll highlight some of the top Bitcoin brokers in Australia and show you how to buy Bitcoin.

How to Buy Bitcoin in Australia in 3 Steps?

Want to add Bitcoin to your portfolio as quickly as possible? You can invest in Bitcoin with these three steps

Step 1: How to Pick a Bitcoin Account in Australia?

In order to buy Bitcoin in Australia, you’ll need to use a broker that offers the purchasing of Bitcoin or a way to speculate on the price fluctuation of Bitcoin using contracts for differences (CFDs). You have a lot of broker options, so we’ll help you get started by highlighting our favorite Australian Bitcoin brokers.

Step 2: Learn How the Bitcoin Market Works in Australia

While getting the right broker is an essential first step, you also need to understand how the Bitcoin market works in order to invest safely and profitably.

What is Bitcoin and How Do You Buy it?

Bitcoin is a digital currency, also known as a cryptocurrency. In contrast to traditional dollars and cents, Bitcoin doesn’t exist in the physical world and it’s not backed by any government.

A single Bitcoin is worth only as much as someone else is willing to pay for it, kind of like a stock or commodity. But, unlike stocks and commodities like oil, you can use Bitcoin to directly pay for an ever-growing number of goods and services in the same way that you would use Australian dollars.

Bitcoin isn’t the only digital currency available, but it was the first and remains by far the most popular. The total value of all Bitcoin in the world is roughly $170 billion and there are nearly twice as many Bitcoin traded as coins of every other digital currency.

In order to get Bitcoin, you’ll either need to buy it directly from someone who already has Bitcoin or buy it on an exchange. Cryptocurrency brokers can facilitate these transactions since there’s a lot of work involved in setting up your own digital wallet to buy Bitcoin on an exchange.

How to Earn from Buying Bitcoin in Australia

Investors can speculate not he rise and fall of bitcoin in much the same way as traditional fiat currency. If you buy Bitcoin using Australian dollars, and then the price of Bitcoin rises relative to the Australian dollar, you can convert your Bitcoin back into dollars for more than you paid for it.

What Can You Buy with Bitcoin in Australia?

Bitcoin is accepted for a wide variety of digital payments. You can use Bitcoin to buy goods and services from many Australian eCommerce stores. Bitcoin is also accepted by major companies like Microsoft for buying online games and computer software, or by companies like Expedia for buying flights and booking hotels. You can spend Bitcoin at many restaurants and online delivery sites, as well as roll it into other investments like gold and real estate.

A surprising number of Australian businesses accept Bitcoin; just ask if it’s not advertised as a payment method.

How to Buy Bitcoin Shares?

Bitcoin is a digital currency, so it’s not available as shares like a stock is. However, you can invest in Bitcoin CFDs. A CFD is a derivative that gives you exposure to the price of Bitcoin without requiring you to actually own coins. If the price of Bitcoin goes up 10%, the value of your Bitcoin CFD will also go up 10%.

When you invest in CFDs, you don’t need to open an e-wallet or deal with any regulatory headaches that come with owning cryptocurrency. However, since you don’t own Bitcoin itself, you won’t be able to spend part of your Bitcoin CFD at stores like you would cash.

If you want to buy CFDs, you can do so through an Australian Bitcoin broker. Most online brokers offer Bitcoin CFDs as an option.

What Regulations are in Place for Buying Bitcoin in Australia?

Australia takes a more progressive view of Bitcoin and other digital currencies compared to many other countries. Bitcoin is treated as property like any other investable asset and is subject to capital gains taxes when you make a profit by converting Bitcoin back to Australian dollars.

The government also has some measures in place to protect cryptocurrency investors. Regulations enacted in 2018 require Bitcoin exchanges operating in Australia to register with the Transaction Reports and Analysis Center, verify users, and maintain records of all Bitcoin transactions.

What Risks are Involved with Buying Bitcoin in Australia?

Like any other investment, Bitcoin comes with some risks. It’s essential to understand these before buying Bitcoin.

Volatility
The price of Bitcoin goes up and down, often steeply and rapidly. If you buy when the price of Bitcoin is high and it then falls, you could lose money on your investment. Since Bitcoin is so volatile, keeping an eye on the daily price of your coins can be anxiety-inducing.

Security
Security is another risk when buying Bitcoin in Australia. Bitcoin is built on a digital security infrastructure. While it’s meant to be highly secure, there have been breaches in the past that have led to untraceable theft of coins. If you don’t fully understand how Bitcoin and your digital wallet work, you could be at risk of losing your coins.

Tax Implications
It’s also important to keep in mind that buying Bitcoin has tax implications. If you profit by selling Bitcoin for more than you bought it for, your profit will be taxed as a capital gain. It’s up to you to report this gain and pay the taxes you owe for it.

How Trading and Investing in Bitcoin Differ From Each Other

There are two different approaches to buying Bitcoin: trading and investing.

Bitcoin trading means buying and selling Bitcoin in the short-term, over the course of minutes, hours, or a few days, to turn a quick profit. Traders may take on more financial risk in order to make money from changes in the price of Bitcoin.

Investing in Bitcoin means buying and holding for the long term, often months or years. Investors see Bitcoin as a promising asset that will gain in value in the long run, regardless of price fluctuations in the short term. The goal is still to make a profit, but investing requires a lot less work since you only have to check on the price of Bitcoin every couple of weeks or even less often.

Step 3: Learn How to Buy Bitcoin in Australia

Different cryptocurrency brokers and exchanges offer different methods of payment. Let’s take a look at some of the payment forms you can use to buy Bitcoin in Australia.

How to Buy Bitcoin with PayPal

Most Bitcoin exchanges don’t accept PayPal because there’s a risk of fraud. PayPal can reverse a transaction without warning, but you wouldn’t be forced to give up your Bitcoin.

That said, you can use PayPal to fund some brokerage accounts. Then, your broker can use cash to buy Bitcoin from an exchange. Alternatively, you can use your PayPal balance to buy Bitcoin by linking it to your credit card and using your card to make a purchase at an exchange.

How to Buy Bitcoin without ID

If you want to buy Bitcoin anonymously, your best bet is to pay with cash or prepaid gift cards. These forms of payment are untraceable.

The trick here is finding an exchange or broker that doesn’t require verification. Most regulated brokers are required to verify your identity, and most Australian exchanges are as well.

If you already own another cryptocurrency, you can also use that to buy Bitcoin with an ID at a number of cryptocurrency exchanges.

How to Buy Bitcoin with a Debit Card

Whether or not you can buy Bitcoin with a debit card on a peer-to-peer exchange depends on your bank. Some banks have approached cryptocurrency more favorably than others.

That said, if you buy Bitcoin through a brokerage, you should have no problem funding your account with a debit card. Most brokers accept debit cards, and banks have far fewer restrictions on brokers than exchanges.

How to Buy Bitcoin with a Credit Card

You can also fund a brokerage account with a credit card and then buy Bitcoin through your broker. However, note that some online brokers charge a fee for paying by credit card.

Exchanges vary in whether or not they accept credit cards. Like for PayPal, there is a risk that buyers can reverse the transaction when paying for Bitcoin with a credit card.

Step 4: Open a Bitcoin Trade

If you’re ready to buy Bitcoin, you can start investing through your broker of choice.

Pros and Cons of Bitcoin Trading

Conclusion

Buying Bitcoin is a good way to get your foot in the door of digital currencies, diversify your portfolio, and grow your wealth over time. Bitcoin has seen some significant price swings in recent years, but the overall trajectory of this currency has been one of appreciation.

Thanks to our guide, you know the ins and outs of how to buy Bitcoin in Australia. Create an account with one of our recommended Australian Bitcoin brokers to get started investing today.

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