A Beginner's Guide To Investing In Litecoin In Australia

Cryptocurrency is a highly volatile asset class that is prone to huge price fluctuations. Litecoin is a type of cryptocurrency that can be purchased in Australia. Before investing in Litecoin, it is important to understand the risks involved and consult with a financial advisor. To buy Litecoin in Australia, you will need to choose a crypto exchange or broker, create and verify your account, deposit funds, place your order, and select a storage method. Some popular crypto exchanges in Australia include Binance, Swyftx, and Independent Reserve. It is important to research the different exchanges and brokers before choosing one, as there are varying levels of security, fees, and features offered.

Choose a crypto exchange

When choosing a crypto exchange, there are several factors to consider. Here are some key considerations:

Security

The security of your cryptocurrency should be a top priority. Look for an exchange that utilizes robust security protocols such as two-factor authentication (2FA), encryption, cold storage of funds, and regular security audits. CoinSpot, for example, offers layered security and is ISO 27001 certified for security management and processes.

Reputation

Unfortunately, there are still many dodgy platforms in the crypto industry. It is important to research the reputation and track record of the exchange in the crypto community. Check reviews and see what other users have to say about their experience with the platform.

Available Cryptocurrencies

Choose an exchange that offers a wide variety of cryptocurrencies, including popular coins like Bitcoin and Ethereum, as well as lesser-known tokens. CoinSpot, for instance, supports over 440 cryptocurrencies, while Cointree offers access to more than 280 different coins.

Liquidity

In light of recent events like the FTX collapse, it is important to consider liquidity when choosing an exchange. Exchanges with higher liquidity not only protect you from potential bank runs but also facilitate faster trades at more competitive prices.

User Interface

Consider an exchange with a user-friendly interface, especially if you are a beginner. Some platforms, like CoinSpot and Cointree, are designed to be intuitive and simple for new investors. Additionally, look for exchanges that offer mobile apps for Android and iOS, so you can trade on the go.

Fees

All crypto exchanges charge fees, but these can vary significantly. Compare the fee structures of different exchanges to find the best balance between cost and the services provided. Some exchanges, like CoinSpot, offer low fees of just 0.1%, while others may charge higher fees for certain transactions.

In summary, when choosing a crypto exchange to invest in Litecoin in Australia, consider factors such as security, reputation, available cryptocurrencies, liquidity, user interface, and fees. Research and compare different platforms to find one that aligns with your investment goals and provides a safe and user-friendly environment for trading.

Create and verify your account

Once you have chosen a cryptocurrency broker or exchange, you can sign up and create your account. Depending on the platform and the amount you plan to buy, you may have to verify your identity. This is a crucial step to prevent fraud and meet regulatory requirements. You may not be able to buy or sell cryptocurrency until you complete the verification process.

To verify your identity, the platform may ask you to submit a copy of your driver's licence or passport, and you may even be asked to upload a selfie to prove your appearance matches the documents you submit.

If you are looking to buy Litecoin in Australia, you can sign up to Swyftx. Alternatively, you can use Binance, a centralised exchange where you can buy several cryptocurrencies, including Litecoin. Before you can use the Binance platform, you'll need to open an account and verify your identification.

Deposit funds

Once you have chosen a crypto exchange or broker, you will need to fund your account before you can start investing in Litecoin. The payment method you choose will depend on the exchange or broker you have signed up with, as well as your own preferences.

Most crypto exchanges in Australia offer instant AUD deposits using PayID. You can also generally fund your account via bank transfer, PayPal, a cryptocurrency wallet, or a debit or credit card.

It is worth noting that using a credit card to buy cryptocurrency is extremely risky and expensive. Credit card companies process cryptocurrency purchases as cash advances, which are subject to higher interest rates than regular purchases. You will also have to pay additional cash advance fees, which could see you losing up to 10% of your crypto purchase to fees.

Electronic Funds Transfers are supported by all Australian banks, but these deposits usually take 1 to 2 business days to appear in your account.

If you are looking for instant deposits, some platforms accept payments via Google Pay, Apple Pay, or debit card.

It is also important to consider that fees will reduce how much money you can invest. Therefore, it often makes sense to use electronic transfers from a bank account rather than other methods.

After your account is funded, you can place your first order to buy Litecoin. Depending on the platform, you may be able to purchase it by tapping a button or you may have to enter its ticker symbol (LTC) and specify the amount you wish to purchase.

Place your order

Once you have chosen a broker or crypto exchange, you can sign up to open an account. Depending on the platform, you may have to verify your identity. This is a regulatory requirement and helps prevent fraud.

You will then need to fund your account before you can begin investing in Litecoin. Depending on the exchange, you can fund your account via bank transfer, PayPal, a cryptocurrency wallet, or a debit or credit card.

Now you are ready to place your first order to buy Litecoin. You can do this by entering its ticker symbol (LTC) and specifying the amount you wish to purchase.

With most exchanges and brokers, you can purchase fractional shares of cryptocurrency, allowing you to buy a sliver of high-priced tokens like Litecoin.

Select a storage method

Once you’ve purchased Litecoin, you’ll need to decide how to store your tokens. Digital wallets are the most popular storage option for investors. Here are some of the options available to you:

• Hot wallet — A hot wallet is a digital wallet that runs on a browser or within an app. This allows you to have all your assets in one place while trading regularly. However, it’s worth noting that cold wallets are considered more secure.
• Cold wallet — A cold wallet is an offline storage device, like a USB stick, making it a more secure option for investors. However, if you lose or misplace your cold wallet, you risk losing your purchased tokens. Many investors store their assets in both hot and cold wallets to combat this risk.
• Multicoin wallet — CoinSpot offers a flexible Multicoin Wallet that allows you to store your Litecoin for free. If you’re holding Litecoin as a long-term investment, you can also send your coins from your CoinSpot account to a cold storage wallet.
• Brokerage or exchange wallet — If you purchase Litecoin through a broker or exchange, you may have little to no choice in how your cryptocurrency is stored. If you buy through an exchange, you can leave the crypto on the exchange in a crypto wallet attached to it. If you don’t trust the provider, you can transfer it off the exchange to a separate hot or cold wallet, although you may have to pay a small fee for this.

It’s important to have a secure storage plan in place for your cryptocurrencies. While many reputable crypto exchanges deploy robust security measures, there are still instances of exchange hacks and security breaches.

Frequently asked questions