Bitcoin has been a hot topic in the last 12 months. institutional investors like big banks and retailers investors like the everyday Aussie are now looking into Bitcoin as a long term investment more than ever.
Buying Bitcoin is quite simple in 2021. There are several exchanges and brokers in Australia that provide platforms to easily buy, sell and trade Bitcoin.
Today we’re going to tell you how to buy Bitcoin in Australia in 2021 in a simple 4 step guide.
What is Bitcoin?
In simple terms, Bitcoin is a decentralised digital currency. It is entirely digital software, so don’t be fooled by the stock images of a shiny gold coin with the Bitcoin symbol on it. Similar to how regular fiat currencies work, Bitcoin acts as a store of value or medium of exchange, yet it is not issued under the authority of a government body. All Bitcoin transactions are peer-to-peer which means they happen directly between network participants, without the need for a third-party intermediary (I.e. central bank) to facilitate them.
The technology that allows Bitcoin and all other digital currencies to function is called blockchain technology. Blockchain is a digital ledger and a system of recording information. The Bitcoin blockchain was the first-ever blockchain, created by Satoshi Nakamoto.
Bitcoin is created through a process called ‘mining.’ This involves several computers around the world competing to solve complex maths problems in order to validate transactions. When a Bitcoin is mined, the successful miner will receive a portion of the mined Bitcoin as a reward. You can learn how to mine Bitcoin in Australia with our beginner’s guide.
How to Buy Bitcoin in Australia
Buying Bitcoin in Australia has never been easier. In its early days, there were very few ways to buy Bitcoin. You had to be quite tech-savvy and somewhat risk-tolerant to execute a Bitcoin trade. However, in 2021, there are several exchanges and brokers that have simplified the process of purchasing Bitcoin. Swyftx is a cryptocurrency exchange that lists Bitcoin and hundreds of other cryptocurrencies. Below we’ve outlined how to buy Bitcoin on our trading platform in just 4 simple steps.
- Register for a Swyftx account: The first step in the process to buy Bitcoin in Australia is to create an account. Swyftx is free to sign up. To sign up you’ll need to provide a few personal details like your full name, email address and phone number. Then create a highly secure password, and agree to our terms and conditions.
- Verify your identity: We like to keep things secure around here and make sure that malicious actors do not appear on our exchange. In order to meet this goal, we ask that our users verify their email, telephone and government-issued ID. That way we can make sure your account is safe and only used by you. The ID verification step typically takes no longer than 2 minutes to complete and you won’t be required to submit any documents
- Send Deposit: While Swyftx often hosts giveaways and other exciting ways to earn digital assets, the best way to fund your account yourself is to make a deposit upon opening your account. Users can immediately deposit AUD$50,000. There are four main ways to fund your Swyftx account. These are bank transfer, POLi, PayID and debit/credit card.
- Buy cryptocurrency: Once your deposit is confirmed, you can purchase Bitcoin by navigating to the buy tab on the Swyftx trading app. Select how much BTC you wish to buy and select which order type you’d like (market order, limit order, stop order, recurring order). Then simply confirm your purchase.
Bitcoin and Cryptocurrency regulation in Australia
Historically, Australia has taken one of the more progressive approaches to digital currency in the world. This is because Australian regulatory bodies encourage innovation and growth in the financial sector. This was evident when a previous regulation that had cryptocurrency double-taxed under good and serves tax (GST) was removed.
In 2017 cryptocurrencies like Bitcoin were declared legal in Australia as long as they abide by the rules set out in the Anti-Money Laundering and Counter-Terrorism Financing Act. Cryptocurrencies are therefore subject to Capital Gains Tax (CGT), similar to regular stocks.
As of 2018, digital currency exchange providers or ‘DCE’s’ are required to register with the Australian Transaction Reports and Analysis Centre (AUSTRAC). This includes the Swyftx cryptocurrency exchange.
Additionally, Australians can now invest their Self Managed Super Fund (SMSF) into Bitcoin and other cryptocurrencies. Through an exclusive partnership with New Brighton Capital, Swyftx users can put Bitcoin into a self-managed super fund (SMSF). Using this tax benefit, digital assets are taxed at a rate of merely 15%. Compare that to some other countries or tax mechanisms that tax your crypto at as high as 26% or even 30%.
Exchanges are the main way to buy and sell Bitcoin and other digital assets in Australia. Other popular channels to buy digital assets include brokers and P2P exchanges. However, this is more cut and dry for the average retail investor. If you are someone who is looking to invest in retirement, there are also options for that too.
How to pay for Bitcoin
Not all exchanges accept every payment method. If you have a specific payment method in mind, it’s best to check that the cryptocurrency exchange you’re looking at offers that payment option.
Buying Bitcoin with a credit card?
Buying Bitcoin with a credit card isn’t very common. This method of payment was only recently introduced with a lot of exchanges. Swyftx allows users to deposit funds into their accounts using a credit or debit card. Some exchanges may allow their users to purchase Bitcoin directly with credit cards, however, this is usually accompanied by higher transaction fees as this requires third-party payment integrations.
Buying Bitcoin with bank account transfer
The majority of cryptocurrency exchanges will permit bank transfer and related payments services like PayID, OSKO and POLi. This is typically the cheapest and quickest payment as transfers are near-instant. Swyftx supports deposit options like bank account transfer, POLi, PayID.
Buying Bitcoin with cash
Although it’s not common, if you want to buy Bitcoin with cash, it is possible to do so in Australia. The most common way of doing this is through a peer-to-peer exchange where you can arrange to meet with someone in person to exchange cash for BTC. Additionally, there are a number of Bitcoin ATM’s scattered across the major Australian cities. These ATM’s allow a person to purchase Bitcoin and other cryptocurrencies by using a credit card or cash. Check out this Bitcoin ATM map to find the closest crypto ATM to you.
How to choose the best cryptocurrency exchange to buy Bitcoin
Not all crypto exchanges are the same. Finding the best exchange or broker for you will depend on a number of key factors. We have listed a few of these key factors below:
Security: Security must be an absolute priority for any crypto exchange. This is because scams and cyber theft are becoming more common, especially in the crypto industry. At a minimum, an exchange should have two-factor authentication (2FA), biometric authentication for mobile and breached password detection to protect their user’s accounts
Fees: One of the more common key factors that influence a person’s decision on choosing a crypto exchange is the trading fees. This is a fee that is charged for any buy or sell Bitcoin order. Compare trading fees between Australian exchanges.
Customer support: Australian-based customer Support is a very important aspect especially for beginner traders. Understanding the crypto world and how to buy Bitcoin can be difficult. A good customer support team can assist with any problems with transactions.
Where can I store my Bitcoin?
All units of Bitcoin and all other cryptocurrencies are stored in digital wallets. A digital wallet is a mechanism that is required for sending, receiving and storing digital assets. There are said to be two categories of crypto wallets. These are hot storage wallets and cold storage wallets.
Hot vs Cold Wallets
While one of the largest differences between wallet types is established when a wallet is considered hot or cold, the real difference between wallet types doesn’t have much to do with temperature. The juxtaposition here lies in whether a wallet is connected to the internet or not. Hot wallets are connected to the World Wide Web, whereas cold wallets are stored offline. Cold wallets are often considered better due to the fact that hot wallets leave your digital assets susceptible to internet thieves.
The oldest form of hot wallet is the desktop wallet. For whatever reason, many users often decide on a desktop wallet for the first place to put their crypto into. After it’s there, many decide to never use another wallet again.
App or mobile wallet Wallets
If you’re the type of person who is always on the go, Swyftx offers a mobile wallet for your smartphone device.
Read Swyftx extensive guide on the Best Bitcoin wallets in Australia.
Buying large amounts of Bitcoin
If you’re looking to trade over $100,000 of Bitcoin or any other listed cryptocurrency, you can head to the Swyftx OTC page. Here, you can book in a consultation with one of our industry-leading experts that can assist you with Bitcoin OTC order.
There are a lot of options you can choose to buy Bitcoin from. However, you have to find the right place that fits your interests and lifestyle. Swyftx lists Bitcoin and over 270 other digital assets. Our platform offers one of the most advanced user designs in the industry and is stocked with the most modern trading tools. Users can sign up for Swyftx in just 4 easy steps. It doesn’t take long, and within a few minutes, you can deposit up to AUD$50,000 and start trading Bitcoin.
Once you have your account set up and deposited, you can choose to put your crypto offline in a cold wallet or keep it on the website. At Swyftx, we actually care about our users and recommend offline storage with a hardware wallet like a Ledger Nano because long term security reputation.