A Beginner's Guide To Crypto Investing In Australia

Investing in cryptocurrency is a hot topic, but it's a risky business. Crypto is a digital asset with no physical form and an extremely volatile value. It's also largely unregulated, so there are few safety nets if things go wrong. However, if you're aware of the risks and still want to invest, there are some simple steps to get started. First, you'll need to choose a broker or crypto exchange, such as Coinbase, Kraken or Binance. You'll then need to create and verify your account, deposit cash to invest, place your cryptocurrency order and select a storage method. It's important to do your research and be aware of the risks, but if you're keen to get started, there are plenty of options available.

Compare and choose an online exchange or trading platform

When choosing an online exchange or trading platform, there are several factors to consider. Firstly, it is important to prioritise company authenticity and platform security. You should also be mindful of fees, spreads, and any hidden charges. The number of coins offered and the ability to buy coins directly with AUD are also key considerations.

It is worth noting that while some platforms may offer a wider selection of coins, others provide Australian-based and personalised customer support. Some platforms cater to those seeking advanced trading features, while others focus on simplicity and ease of use.

When selecting a platform, it is advisable to conduct thorough research, read customer reviews, and choose a provider that is transparent about its fees and services. Additionally, you should verify the security measures employed by the platform, including the use of secure cold wallets to protect your assets.

Some popular cryptocurrency exchanges include Coinbase, Kraken, and Binance, which offer both standard trading interfaces and user-friendly purchase options. Australian-based exchanges such as CoinSpot, Independent Reserve, and Swyftx, also enable users to purchase cryptocurrencies with AUD through bank transfers or BPAY.

It is important to remember that the choice of platform depends on your individual preferences, trading goals, and level of comfort with crypto investing.

Sign up and verify your email and identity

Once you've chosen the crypto exchange that suits your needs, you can create an account. This typically involves choosing a username and password, filling in your personal information, and setting up two-factor authentication (2FA) for added security. The platform may also ask you to verify your email address, which is usually done by clicking a link sent to the email address provided.

After signing up, you will need to verify your identity to prevent fraud and meet regulatory requirements. This process may vary depending on the platform and the amount you plan to invest. Some common forms of identity verification include providing a copy of your driver's license or passport, or even uploading a selfie to confirm your appearance matches the documents submitted. In Australia, you may also need to provide proof of residence. This process can usually be completed within a few minutes.

Add your bank account and select a payment method

Once you have chosen a crypto exchange that suits your needs, you will need to add your bank account details to the platform. This will allow you to deposit funds into your account and start investing in cryptocurrencies. The specific process may vary depending on the exchange you choose, but it generally involves providing your bank account number, BSB, and other relevant details.

When adding your bank account, you will also need to select your preferred payment method. Different exchanges may offer different payment options, but some common methods in Australia include Poli and PayID/Osko. It is important to review the available payment methods before selecting an exchange to ensure they align with your preferences.

Keep in mind that some exchanges may charge fees for depositing funds, so be sure to review the fee structure of the exchange before making a decision. It is also worth noting that credit card providers may charge high fees for using a credit card to fund your crypto account, so it is generally recommended to use alternative payment methods where possible.

Once you have added your bank account and selected your payment method, you can proceed to make a deposit into your account. This deposit will typically be in Australian Dollars (AUD) and should be free of charge. After the deposit is complete, you will be ready to start investing in cryptocurrencies of your choice.

Adding your bank account and selecting a payment method is a crucial step in the process of investing in cryptocurrencies. It allows you to access your funds and start building your investment portfolio. Remember to review the available payment methods, consider any associated fees, and choose the option that best suits your needs.

Choose the cryptocurrency you want to trade

Once you have chosen a crypto exchange, you can start to consider which cryptocurrency to invest in. There are thousands of cryptocurrencies available, so it can be challenging to decide. Here are some factors to consider when choosing a cryptocurrency:

• Do your own research: Before investing in any cryptocurrency, it is essential to conduct thorough research. This includes looking into the project, its use case, team, 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. Coins with higher market capitalisation tend to have lower volatility and higher liquidity, making it easier to enter and exit trading positions.
• White paper: A white paper is a document that outlines the key details of a crypto project, including its vision, team, technology, partners, advisors, token economy, and use cases. It is important to critically evaluate the white paper and consider whether it presents a clear and compelling vision.
• Long-term vs. short-term opportunities: When choosing a cryptocurrency, you can consider whether you are looking for long-term or short-term investment opportunities. Coins with strong fundamentals, a clear use case, and a solid development team may be better suited for long-term investments, while coins with low prices and high growth potential may be more suitable for short-term gains.
• Fees and pairs: Different crypto exchanges will offer different fees and currency pairs. It is important to consider how these factors will impact your investing style and goals.
• Security and regulation: Cryptocurrency exchanges should employ strong security measures to protect your assets. It is also important to consider the regulatory environment in your country, as this can impact the safety of your investment.
• Reputation and user experience: Before choosing an exchange, research what other users say about it and whether there have been any issues with security or user experience.

Remember that investing in cryptocurrency is highly speculative and volatile, so it is important to do your own research and understand the risks involved.

Enter the amount of cryptocurrency and confirm your purchase

Now that you've chosen a cryptocurrency to invest in, it's time to decide how much you want to buy. You can enter the amount in AUD or the amount of the specific coin you wish to purchase. Double-check that the details are correct, including the type of cryptocurrency and the amount. Once you're sure, confirm the purchase.

It's important to remember that cryptocurrency is a highly volatile asset class. This means that its value can fluctuate significantly, and you may experience both gains and losses. As such, it's generally recommended to start with a small investment and learn more about the crypto space before diving in. Additionally, ensure you have done your research on the chosen cryptocurrency and understand its value, practical use, and long-term application.

Before investing, consider your financial situation, goals, and tolerance for risk. If you're unsure, consult a financial advisor to help you make an informed decision. Remember, buying cryptocurrency is straightforward, but it's essential to understand the risks involved and only invest what you can afford to lose.

By following these steps and confirming your purchase, you've taken your first step into the world of cryptocurrency investing. Congratulations! Now, it's important to continue learning and staying updated with the latest developments in the crypto space to make informed decisions on your investment journey.

Frequently asked questions