The crypto-mania has been the talk among investors in Australia ever since Bitcoin marked its significant change in 2017. Moving ahead to 2022, the movement around BTC and the crypto industry has been strong!
So if you’re new to the industry and wonder how to invest in cryptocurrency in Australia, here’s your step-by-step walkthrough for getting started with your crypto journey. We’ve discussed everything from crypto regulations to its purchase and the best exchanges to get started in the sections ahead. So let’s check it out!
Is Cryptocurrency Regulated In Australia?
In the year 2020, there has been a lot of progress in cryptocurrency regulation. For example, the ESMA (European Securities and Markets Authority) intends to regulate cryptocurrencies in its 2020-2022 strategic plan. In addition, over 30 bitcoin and blockchain measures have recently been introduced in the US Congress.
Cryptocurrencies are legal in Australia and are considered property. This implies they’ll have to pay capital gains tax on their profits. However, SMSFs can invest in bitcoin if their investment strategy allows it. AUSTRAC has registered digital asset exchanges, and they are completely compliant with all KYC/AML regulations.
Now that you know about the legalities surrounding cryptos, let’s look at the steps involved in the process and how to invest in crypto in Australia in the following section.
Buying Crypto In Australia
If you’re ready to dive into crypto, you’re in luck! Because it’s easy to follow four steps. Let’s have a walkthrough of each one of them.
Step 1: Join a crypto exchange
To begin, you’ll need to decide where you’d want to buy your cryptos. Then, you’ll need to register yourself with a crypto exchange and check for their fee structure, methods of functioning, and the overall security they provide to your funds.
However, when choosing a specific crypto exchange, remember that these exchanges are similar to stockbrokers, acting as the intermediaries in bitcoin investing.
Step 2: Get a crypto wallet
Once you’ve bought a coin, you’ll receive it in a wallet provided to you by the registered crypto exchange. When it comes to their types, they are two: hot and cold wallets.
Your crypto exchange manages a hot wallet in terms of its definition. Some crypto exchanges provide you with these wallets when you create accounts with them. These wallets are digital and can be accessed via the internet.
Besides a hot wallet, you have a cold wallet to store your cryptos. These wallets are physical hardware drives that generally look like flash drives.
Tip: If you’re simply planning to buy a modest currency, opting for a hot wallet under an insured crypto exchange could suffice. On the other hand, a cold wallet can be worth your investment if you’re going to be trading huge quantities of cryptocurrency.
step 3: Fund your wallet & place your orders
Once you’ve obtained your crypto wallet, the next step is to attach your wallet to your debit, credit card, or bank account. Once you’ve funded your account, you can then place your orders.
And once the funds are highlighted, you’re just an order away from your purchase.
However, an important question comes, ‘how many cryptos should you buy?’.
Some tokens have a market value of thousands of dollars, yet when you’re registered with the right exchange, they’ll allow you to purchase a fraction of them at an investment of as little as $25.
Lastly, you should understand that investing in cryptos is surrounded by the market’s volatility! Therefore, it’s always wise to first understand the risks associated with your investments and then make any purchases.
Where To Buy Crypto In Australia
By now, you’ve already known that you can only invest in cryptos via a dedicated exchange. However, this is where things start getting confusing.
With the number of crypto exchanges currently available in the country, the chances are that any beginner might get confused with investing in cryptocurrency in Australia. And while every crypto exchange might look similar in its functioning, they’re not!
Every crypto exchange is unique and has its functions, rules, and fee structure. Therefore, to save you from all the troubles of researching the individual platforms, we’re listed some of the best platforms to buy cryptocurrency in Australia in the section below.
If you’re looking for investing in cryptocurrency in Australia, Swyftx is the best platform to get started with! This platform is an easy-to-use exchange with a slew of features to suit the likes of both beginner and advanced traders alike.
The platform stands out from the others because of its clean UI, transparent and low fee structure, and live chat features like a $10,000 funded demo account. In addition, the platform brings you over 310+ cryptos to start your investment journey. And with new projects being added up regularly, you’re at a better chance to diversify your portfolio over Swfytx.
Talking of the fee structure, the spreads offered by the platform are low, marking an average of 0.51%, to be precise. You can start your investment journey by funding your accounts using credit, debit cards, and bank transfers. Additionally, withdrawing and depositing AUD attracts no charges, regardless of the funding method. What’s more? The trading fee is just 0.6 percent of the overall transaction.
Besides investing in new cryptos, users also can stake the acquired funds in their accounts to earn interest. This feature is easy to use and can be done by beginner investors over a matter of a few clicks as well.
On the flip side, the platform can be limiting for advanced traders in margin trades and futures. The platform seems to be a platform that is more focused on beginners.
Up next on our list of the top crypto platforms is Capital.com. It stands out as one of the most reliable platforms for users, regulated by CySEC, ASIC, NBRB, and FCA. In addition, users of the platform have access to vast numbers of financial tools like forex, metals, ETFs, stocks, and indices besides crypto.
Investors who are limited to crypto have the chance to access and invest in over 470+ different cryptocurrencies. However, users need to understand that the platform won’t directly allow you to invest in digital assets. Users can trade cryptos via CFDs or contracts-for-differences.
The platform presents many features that make it super convenient for beginner investors to start their journey. Besides some easy-to-navigate charts and tools, Capital.com also ensures that new users access educational tools like blogs and guides, which can be accessed via its native mobile app.
Talking of the fee structure, the platform is super competitive! Transactions on the platform don’t attract any form of trading commissions. As a result, spreads in the platform are tight, especially when you invest in markets like BTC/USD. Besides, Australian users get access to leverage too.
While there is no fee on AUD withdrawal or deposits, users of the platform need to invest a minimum of $20 via e-wallet, debit, or credit card. Besides, you might need to deposit funds of $250 to avail bank transfer.
Third on our list of the best platforms to buy cryptocurrency in Australia is Digital Surge, an ideal choice for many beginners. The platform is a great start for beginners because it has its interactive UI and the lowest fee structure. This ASIC and AUSTRAC registered platform has been present in the market since 2017 and allows users to access over 300+ cryptos to get started with their journey.
The platform is loaded with features that add to the perks of using this platform! To begin with, users can make the most of their time on this platform with the use of simple graphs and tools. Advanced users can also make the most of this platform via limited orders and the chance to place options orders.
However, the fee structure makes Digital Surge stand out. The platform offers the lowest combined fees and spreads, starting at just 0.5 percent, and going as low as 0.1 (depending on trading volume).
Users can directly fund their accounts with AUD as they won’t have to worry about attracting a different fee. Digital Surge offers excellent convenience to crypto investors, particularly those holding BTC, talking of another unique platform feature. They can use the BPAY feature to pay directly with Bitcoin.
On the flip side, the platform might be limiting for advanced users. While there are advanced trading options for them, users won’t find it helpful without reliable tools and advanced charts.
Binance is the next place you must consider in your search to find the best platform to buy cryptocurrency in Australia. One of the top-rated exchanges in the country, the platform comes with great features for both new and experienced investors and traders alike.
Users of the Binance platform have access to over 600+ individual cryptos from across 1,000+ markets. You can get started with your investment journey or trade amidst various tokens to develop a diversified folio.
The funding options in the platform are rather vast than the others in this list, thanks to the platform’s BNB token. Users can hold this token in their wallet and significantly reduce the commission on their trades by 25%. In terms of the ordinary fee structure, the platform charges you just 0.10% per slide, meaning that you only pay a commission of $0.10 for every $100 you trade.
Other methods to fund your accounts on this platform include debit, credit cards (with added fee), PayID, and wire transfers to the users. Nevertheless, once users invest their money into Binance, they have access to numerous funds for storage.
On the flip side, the platform is un-regulated by any financial body, even though it continues to store some amount of its digital assets in cold storage. Additionally, the events of hacking of the platform also add to its downsides.
Last on our list of the top crypto exchanges is CoinSpot, the latest entrant in Australia’s crypto industry. This platform was introduced back in 2013 and continues to provide its service to over 2.5 million users. The best part? The platform comes with high liquidity and records the maximum number of transactions of all crypto exchanges in the country.
CoinSpot is also the most internally audited crypto exchange to receive ISO 27001 certification. The certifications and stringent security measures add to the platform’s authenticity and assure safety for new crypto investors.
Users can start their journey by investing in over 350+ different currencies and diversifying their folios with numerous big and small projects. Additionally, users can also stake over 22 coins, allowing them to earn interest over the invested cryptos.
Additionally, the platform has also introduced its NFT marketplace, allowing crypto investors a chance to trade in cryptos using their desired crypto tokens. FUnding options in the platform remain the same as others with credit, debit cards, and bank transfers.
On the flip side, CoinSpot comes with a high transaction fee of 1 percent for its instant buy and sell feature.
The Best Cryptocurrency to Invest In Australia
Now that you have an idea of the different crypto exchange platforms you could begin your crypto journey with, we know what follows next! The chances are that you might be thinking! Unfortunately, with more than 8000+ cryptos currently present in the market, it becomes difficult investing in cryptocurrency Australia.
We’ve curated a list of the best cryptocurrency to invest in 2022 Australia you might consider investing in for those new to this space. So let’s check it out!
- Bitcoin (BTC)
Currently present with a market cap of USD 701,870,216,306, BTC enjoys its status as the world’s first crypto in the market. Whether you’re new or haven’t heard of cryptos at all, you can’t ignore the presence of BTC in the global markets. It utilizes peer-to-peer technology for its operations, managing transactions via Blockchain.
Talking of the performance, Bitcoin had recently marked its all-time high performance in April 2021 at $65,000. And while it may sound a little exaggerated, investors and traders are mostly bullish about the token, expecting it to reach $100,000 anytime soon.
Additionally, Bitcoin has been the fastest adopting crypto currently being accepted by industry giants like Tesla, Visa, and PayPal. All such factors make BTC a reliable investment for the long run.
- Ethereum (ETH)
Touted as the second-largest crypto after Bitcoin, Ethereum is one cryptocurrency you might want to invest in. This decentralized token stands at a market cap of USD$307,995,204,552, currently enjoying its status as the most used crypto for smart contracts.
In terms of its performance over the past, Ethereum tokens have marked a significant move over the last seven years. Starting its journey at $10 in 2015, Ethereum currently stands at $900. And with the smart contracts’ use of Ethereum in the recent past, the token is expected to reach around $7,190 in December 2022.
Recently, Ethereum has also gained significant attention from investors, making it a reliable cryptocurrency for beginners in Australia. Besides, the plans to reduce ETHs network energy by 99% make it a reliable option.
- XRP (XRP)
Next on our list is XRP, a native crypto to the Ripple Payment Network. While it was originally developed for enterprises, the primary aim of XRP to be fast and cost-efficient is what makes it a reliable option to go with.
Enjoying a market capital of USD$33,678,442,647, the token currently stands at $0.64. Adding to it, the future prospects of XRP are clear as investors and analysts suggest the token reaches a dollar per unit.
Talking of its recognition, XRP has been accepted by some of the world’s largest banks, adding to its overall value. Besides, with financial institutions like Bank of Santander, America, and American Express, XRP is expected to be a primary player in the future.
- Solana (SOL)
Fourth on our list is Solana, an open-source project to become the world’s first high-performance, web-scale, permissionless Blockchain. What makes the token unique is that it revolves around ‘Proof of History’, which allows it to simplify transactions.
In terms of its performance over the years, SOL stands out as a reliable investment with a market cap of USD$26,658,447,257. The token started off its journey with $0.04 in 2018. Fast-forward to 2022; the token stands at $97.83 today.
Given the token’s latest improvements with an increased interest in NFT space, the platform looks forward to increasing its price to $200 over the years. All of these factors make it a reliable option to go with!
- Tether (USDT)
The last crypto on our list is Tether, a transparent and secure system which works in co-relation to the value of USD. Touted as the money developed for the internet, USDT was designed to bridge the gap between cryptos and fiat.
Standing at a market cap of USD$79,281,040,921, the token is controlled via Bitfinex, the world’s largest BTC exchange by volume. Standing similar to the USD price, this token is a reliable option for safe investors in the crypto field.
Besides, Tether has highlighted an explosion in terms of its value lately. All of these factors make it a reliable factor for investors to add USDT to their folio.
Tax Regulation Around Crypto In Australia
The Australian Tax Office (ATO) does not consider cryptos to be currencies. They’re instead categorized as assets. As a result, the CGT (Capital Gains Tax) laws apply to any profit or gain made from purchasing and selling cryptos.
However, when investing in cryptos, you must decide whether you’re an investor or a trader. An investor is someone who keeps cryptos for personal benefit, and long-term gains will account for the majority of your profits. On the other hand, a trader owns crypto for business purposes, and earnings are derived from short-term gains.
The Australian Taxation Office (ATO) has explicitly clarified the tax status of cryptocurrencies, making them similar to traditional assets. You must pay capital gains tax on any profits (with a 50% reduction if you keep an investment for more than 12 months) and income tax on any dividends or interest from short-term crypto earnings.
Therefore, when you invest in cryptocurrency, you’re required to keep the following records:
The date of the transaction.
- The type of crypto purchased?
- Units of cryptos bought?
- The total amount paid (including any fees).
Once you’ve mentioned these purchase records, you’ll be able to file for capital gains or losses after selling your cryptos and using them for tax obligations.
Lastly, if you’re new to the crypto space and feeling a little overwhelmed, don’t fret! Cryptos might seem daunting and complicated at first, but understanding how exchanges work and the core ideas behind what you’re investing takes a bit of leg work and research before you dive in. All the best with your investment journey.
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Shrey Jain is a Chartered Accountant who holds a forte in creating informative content on niches like Finance, Blockchain, crypto, and Taxation. He is a contributor on Hackernoon and Publish0x, where the audience has highly appreciated his articles. In addition, his knowledge in the finance field has helped both beginners and experts gain valuable insights into the domains of Blockchain and finance.