A Beginner's Guide To Investing In Crypto In Australia

Investing in cryptocurrency in Australia is a relatively straightforward process. First, you need to find an exchange that suits your needs. Some popular options include eToro, Coinbase, Binance, and CoinSpot. Once you've chosen an exchange, you'll need to create an account and verify your identity. After that, you can deposit funds into your account using a payment method such as a bank transfer or credit/debit card. Finally, you can use the funds in your account to purchase the cryptocurrency of your choice. It's important to note that investing in cryptocurrency carries risks, and it's recommended to do thorough research before investing.

Compare and choose an online exchange or trading platform

There are several online exchanges and trading platforms available for investing in cryptocurrency in Australia. It is important to compare and choose the one that best suits your needs and preferences. Here are some factors to consider when making your decision:

• Reputation and Security: Look for a platform with a good reputation and a strong focus on security to protect your investments. For example, eToro, Coinbase, and Binance are popular platforms with a strong reputation.
• Number of Cryptocurrencies: Consider the range of cryptocurrencies offered by the platform. Some platforms offer a wide variety, such as eToro, Binance, and Coinbase, while others may specialise in specific cryptocurrencies.
• Fees and Charges: Be mindful of the fees and charges associated with each platform. These can include transaction fees, deposit fees, withdrawal fees, and account fees. Some platforms, like eToro, offer fee-free deposits and no account or withdrawal fees.
• Payment Methods: Ensure that the platform supports your preferred payment method. Common options include credit/debit cards, bank transfers, and e-wallets.
• User Interface and Functionality: Choose a platform with a user-friendly interface that is easy to navigate and use. Consider the functionality and features offered, such as advanced charts, price alerts, and trading tools.
• Regulation and Licensing: Ensure that the platform is properly regulated and licensed, particularly by the Australian Securities and Investments Commission (ASIC). This provides an extra layer of protection for your investments.
• Customer Support: Look for a platform that offers responsive and reliable customer support to assist you with any queries or issues you may have.
• EToro: eToro is a highly reputable platform with over 27 million users. It offers a wide range of cryptocurrencies, no transaction fees, and competitive spreads. eToro is regulated by ASIC and other top-tier entities, ensuring the safety of your investments. It also provides a free crypto wallet app for secure storage.
• Coinbase: Coinbase is a popular platform, especially for beginners, with a user-friendly interface. It offers over 90 coins to trade and a free crypto wallet app. Coinbase is registered and authorised by FinCEN and the FCA.
• Binance: Binance is one of the largest cryptocurrency exchanges globally, offering over 500 crypto assets. It has low fees of only 0.1% for spot market trading and supports various payment methods. Binance is centralised and regulated, ensuring the security of your investments.
• Crypto.com: Crypto.com is known for its user-friendly platform and app, offering an intuitive interface for buying and selling over 250 different coins. It charges a low maker/taker fee of 0.4%, which can be further reduced by paying fees in its native token, CRO.
• Digital Surge: Digital Surge is a user-friendly platform that allows instant buying and selling of nearly 300 cryptocurrencies. It offers competitive fees of 0.5% for instant trades and even lower fees of 0.1% for high-volume traders. Digital Surge is registered with ASIC and provides live chat support.
• Swyftx: Swyftx stands out for its transparency in fee structure, offering low spreads and no fees for fiat deposits and withdrawals. It provides trading for over 310 cryptocurrencies and supports features like staking, price alerts, and token swaps.
• CoinSpot: CoinSpot is a beginner-friendly platform that enables users to buy and sell over 350 cryptocurrencies. It offers instant buy and sell orders with a 1% fee, which drops to 0.1% for spot trading. CoinSpot provides 24/7 customer support and a free wallet app for convenient storage.

When choosing an online exchange or trading platform, it is essential to conduct thorough research, compare multiple options, and consider your specific needs and investment goals.

Sign up and verify your email and identity

Once you've chosen the crypto exchange that suits your needs, signing up is usually pretty straightforward. Choose a username and password, fill in your personal information, and set up two-factor authentication (2FA) to add an extra layer of security to your account.

After signing up, you'll need to verify your email address, which will then prompt you to verify your identity. This can be done in a few short minutes with a passport or another form of ID, such as a driver's license, and sometimes a proof of residence.

Tips for signing up and verifying your identity

• Choose a secure password that you don't use for other accounts.
• Set up 2FA to increase the security of your account.
• Have your chosen form of ID ready to ensure a quick and easy verification process.
• Read through the platform's requirements and accepted forms of ID before signing up to ensure a smooth verification process.
• Some platforms may require additional verification steps, such as providing a proof of residence, so be prepared to provide this if needed.

Add your bank account, select a payment method and make a deposit

To invest in cryptocurrency in Australia, you'll need to add your bank account details and select a payment method to make a deposit. Here's a detailed guide on how to do this:

Adding Your Bank Account:

Firstly, log in to your chosen cryptocurrency exchange or broker platform. Look for the settings or profile section, where you should find an option to add or link your bank account. You will need to provide your bank account details, including the account number, BSB number, and account name. Make sure the information you enter is accurate to avoid any issues with deposits or withdrawals.

Selecting a Payment Method:

Different platforms offer various payment methods, so review the options available on your chosen platform. Common payment methods in Australia include bank transfers, BPAY, Poli, and PayID/Osko. Each method may have different processing times and fees, so consider which one suits your needs. Some platforms may also offer payment by credit or debit card, but be cautious as these can attract higher charges from your card provider.

Making a Deposit:

Once you have set up your bank account and selected your preferred payment method, you can initiate a deposit. Enter the amount you wish to deposit in AUD, ensuring you meet any minimum deposit requirements. Follow the platform's instructions to finalise the deposit. The processing time may vary, but deposits are typically completed within a few days. Remember to only invest an amount you are comfortable with and always review the fees and charges associated with deposits.

By following these steps, you will be able to add your bank account, select a suitable payment method, and make a deposit to start investing in cryptocurrency in Australia.

Choose the cryptocurrency you want to trade

Once you have chosen a crypto exchange and set up your account, you can start to explore the cryptocurrencies on offer. There are thousands of cryptocurrencies available, so it is important to do your research and understand the risks before investing.

Do Your Own Research (DYOR)

Before investing in any cryptocurrency, it is important to do your own research (DYOR). Look into the project's fundamentals, such as its use case, team and founders, token economics, and underlying technology.

Market Capitalisation

The market capitalisation of a cryptocurrency is calculated by multiplying the total number of current tokens in circulation by the current market price of the token. Coins with higher market caps generally have lower volatility and higher liquidity, making it easier to enter and exit trading positions.

White Papers

White papers are documents issued by crypto projects that outline the project's vision, team, technology, partners, and token economics. While they are not regulated, they can provide valuable insights into the project.

Types of Crypto-Assets

There are several types of crypto-assets, including cryptocurrencies, stablecoins, non-fungible tokens (NFTs), and decentralised finance (DeFi) tokens. Cryptocurrencies are designed to act as a medium of exchange, while stablecoins aim to maintain a stable value relative to a specified asset. NFTs are unique tokens that record ownership of an object, while DeFi tokens are created through participating in decentralised finance protocols.

Risk and Volatility

Crypto-assets are considered high-risk investments due to their volatile nature. The price of crypto can fluctuate based on market speculation, public announcements, and individuals with large amounts of a crypto-asset who promote it through social media.

Regulation

Crypto-assets are largely unregulated, and the platforms where you buy and sell crypto may not be protected in the event of a failure or security breach.

Anonymity and Security

Crypto systems allow users to remain relatively anonymous, and there is no central data bank. This means that if a hacker steals your crypto, it is difficult to recover. Using an offline wallet or 'cold storage' may offer more protection.

Enter the amount of cryptocurrency you want and confirm your purchase

Now that your account is funded, you are ready to make your first cryptocurrency purchase. Go to the "buy/trade" section of your chosen platform and select the cryptocurrency you wish to purchase.

Enter the amount of AUD you want to invest or the amount of the coin you want to buy. Double-check that the details are correct, including the amount and type of cryptocurrency, then confirm your purchase.

Congratulations, you've just made your first cryptocurrency purchase! It's important to remember that the value of cryptocurrency is volatile and can fluctuate significantly, so always be prepared to lose what you invest.

Before investing large sums, it's a good idea to start small and learn about crypto. Understanding the lay of the land and the specifics of the coin before investing further can help you make informed decisions and start your crypto journey on the right foot.

Frequently asked questions