How To Buy Cryptocurrency In Australia
Cryptocurrencies are becoming more mainstream and readily available for Australian investors and traders to acquire.
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Our Detailed Guides
Best Australian Cryptocurrency Exchanges
Buying Bitcoin In Australia: A Beginners Guide
Buying Ethereum In Australia: A Beginners Guide
How To Buy Crypto In Australia
An overview of the five steps to buy crypto in Australia is as follows:
- Open an account with Swyftx
- Verify your identity and activate 2 Factor Authentication (2FA)
- Deposit Australian Dollar (AUD) funds into your account
- Select the crypto and enter in the amount to buy
- Review the transaction details and confirm
Guide to Buying Crypto In Australia
Step 1 - Open An Account With A Crypto Exchange
Using our link to collect $10 BTC, go to the Swyftx website and click on the “Sign Up” button. This will redirect you to the registration page where an email address, password and phone number will be required to be provided.
Once the details are entered, accept the terms and conditions and click on “Create Account”.
Step 2 - Verify Your Identity
Using the new login details, login into the Swyftx account to commence the ID verification process. Since Swyftx is an Australian-based crypto exchange, it is legally required under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 to obtain customer details and verify identities. This process must be completed before any AUD can be deposited into the account wallet.
The following will be required to complete ID verification:
- Email – login into the nominated email account and click on the email verification email sent by Swyftx.
- Phone number – Swyftx will send a SMS message to the nominated phone number.
- Identity – Swyftx will require copies of one Australia government issued document such as a passport or drivers licence.
The ID verification process with Swyftx takes less than 5 minutes to complete.
After the ID verification process is complete, we strongly recommend setting up 2 Factor Authentication (2FA). 2FA provides a basic level of security for the account where two methods of verification are needed to verify the account and also when funds are withdrawn. The 2FA set up page can be found under the “About” tab on the user account dashboard.
We suggest downloading Google Authenticator on a mobile device. The process will involve the use of the authenticator to scan a QR code or alternatively input a provided code to enable authentication of the device.
Tip: If the six digit code provided by Google Authenticator does not work, then go into the settings and sync the time correction for codes. This should rectify the issue.
Step 3 - Deposit AUD Into Your Account
Before crypto can be purchased, Australian Dollars will need to be deposited into the account wallet. When it comes to depositing funds, it is wise to be mindful of the fees and the time taken to complete transfer of funds. Most Australian exchanges will offer several ways to deposit AUD, with the most common being direct bank transfer, POLi, and PayID. Swyftx is one of the few exchanges which offer deposits via credit card. Most of these methods will instantly deposit AUD into the account with the exception of bank transfers (unless via OSKO which is instant) and deposits made from credit cards. Swyftx do not charge any fees to deposit (or withdraw) funds into the wallet.
Note, that Swyftx will send an automated email notifying of the successful deposit of AUD funds into the wallet.
Step 4 - Select The Crypto & Enter In The Purchase
The buy window can be found under “Trade”. Next, click on “Buy” to view the screen below. The page will present the following:
- Amount of AUD in the wallet and available to spend.
- The current market price of the selected asset.
- Several order types (market, limit, stop and recurring)
The default order type is “Market” which allows beginner investors to easily and quickly purchase crypto in a single transaction. The other order types are for intermediate to advanced investors and a discussion of each type is detailed in our Swyftx review.
Either scroll to find the coin to be purchased or use the search function. In this example, we searched for Cardano (ADA).
Customers will have the option of either entering in the amount of crypto they want to purchase, or the amount of AUD they want to spend to buy crypto.
Step 5 - Review & Confirm The Purchase
After an amount of AUD is entered in, the amount of crypto that will be purchased will be presented and will be inclusive of the trading fee (0.6%). Click on “Instant Buy” to review the transaction details and “Confirm Buy” to complete the purchase. Note, that once the purchase is confirmed, it cannot be reversed and AUD funds recovered.
Buying Crypto In Australia: Things You Should Know
What Is The Best Exchange To Buy Crypto In Australia?
In our opinion, the best cryptocurrency to buy crypto is Swyftx. The Australian-based exchange is one of a few exchanges which utilise multiple order books to provide higher liquidity on trading pairs. The higher trading volume and market depth allow Swyftx to offer lower spreads. The platform is feature-rich and carefully designed with beginner and experienced investors in mind. A close second is Digital Surge.
How Do I Choose A Crypto Exchange?
With so many Australian-based crypto exchanges available, beginners may find it difficult to know which exchange is best for them. Before you start buying crypto, here are a few important considerations to take on board to assist with comparing exchanges.
- Interface Usability – Beginners should ideally be seeking out a User Interface (UI) which is simplistic, intuitive to use and therefore making the trading experience easier and more enjoyable. Features that beginners should be on the look out for include instant deposits and withdrawals, instant buying and selling.
- Deposit Method – The method of depositing AUD funds into the account wallet will vary from exchange to exchange. The most common ways include direct bank transfer, BPay, POLi and credit / debit cards. The fees incurred and speed of the transaction should also be considered.
- Fees – Australians should be aware of the various fees that may be incurred when trading crypto on a cryptocurrency exchange. Fees may include deposit fees (most exchanges charge zero deposit or withdrawal fees), withdrawal fees and trading fees (between assets, e.g. Bitcoin to Ethereum). Although not considered a fee, spreads will apply to each transaction. The spread is the difference between the buy and sell price for a quoted cryptocurrency.
- Supported Crypto – Almost all exchanges will provide various coins as a purchasable and tradeable asset. However, if there is a possibility of diversifying into other cryptocurrencies then the number and type of supported cryptocurrencies and trading pairs (e.g. BTC-ETH) should be assessed.
- Liquidity & Volume – The larger and more established digital currency exchanges will tend to have access to greater liquidity compared to smaller cryptocurrency exchanges. Liquidity refers to how easily one asset is converted into a fiat currency or another asset. The higher the liquidity of an exchange, the easier and faster it will be to complete fiat-to-crypto and crypto-to-crypto transactions.
- Security Measures – Before you choose a crypto exchange, ensure that they are registered with AUSTRAC. Industry standard security measures for Australian crypto exchanges typically include multi-location and offline cold wallet storage of funds, a combination of hot and cold fund storage, multi-signature verification withdrawal process, and 2FA. Other features may include user private key control, ID verification, notification on account activity (i.e. email and / or SMS), proof of reserve, email encryption and 24/7 security protocol monitoring and penetration testing by third-parties.
- Quality of Customer Support – Most exchanges provide a ‘knowledge’ or ‘education’ section of their website, however some exchanges do this better than others. Beginners should explore the customer support features of the exchange. Support tools to assist with immediate troubleshooting advice or assistance may come in the form of a ticket system or live chat bot.
What Is A Cryptocurrency Exchange?
A cryptocurrency exchange is an online platform where cryptocurrencies and digital assets can be bought and sold in exchange for tokens at market prices. There are three types of crypto exchanges:
- Fiat-to-crypto exchanges where involve the local currency (e.g. AUD, USD) is traded for crypto (e.g. BTC).
- Crypto-to-crypto exchanges where digital assets and coins can be traded for other assets, otherwise known as trading pairs (e.g. BTC-ETH).
- A combination of the above.
Types of Crypto Exchanges In Australia
There are three types of cryptocurrency exchange:
- Decentralised Exchanges (DEX) – A crypto exchange that is not governed by a central authority and transactions are made from peer-to-peer. Blockchain technology is the vector for the trading of assets between customers.
- Centralised Exchanges (CEX) – A cryptocurrency exchange that is governed and regulated by a central authority.
Storing Crypto In Australia
Deciding on how to store crypto in Australia comes down to two options. Firstly, crypto can be kept in the exchanges storage system, which can be cold-storage (wallet), or a combination of hot and cold-storage. Secondly, cold-storage wallets may be used by individuals to hold crypto offline and usually in a physical state.
- Hot storage refers to a wallet that is connected to the internet and can be accessed at any time. Examples include online cloud wallets, mobile wallets, software wallets and exchanges. Hot wallets are great for keeping an amount of crypto available for frequent buying, trading and selling.
- Cold-storage refers to a physical means of keeping crypto in a storage device and are only accessible by the wallet owner. Examples include hardware wallets such as CoolWallet Pro and the Ledger Nano X. Cold-wallets are not connected to the internet.
Since hot-wallets (e.g. exchanges) are connected to the internet, crypto may be susceptible to loss, damage or theft, albeit the risks are low. With this in mind, investors and traders should be seeking a reputable and trustworthy exchange that has a stellar security record. The best way to mitigate against this potential risk is to store crypto in a cold-storage wallet.
The key function of a cold wallet is to provide an extra security mechanism between the internet-connected device (e.g. computer) and the asset. All wallets will have a private key that legitimises access to the stored asset. Most wallets usually come equipped with a variety of recovery options in case the wallet is lost or damaged.
Frequently Asked Questions
Is It Legal To Buy Crypto In Australia?
The purchasing, trading and selling of crypto and other digital assets is legal in Australia and is recognised as property by the Australian Tax Office (ATO). Since 2017, laws and regulations have been progressively introduced to control the crypto market. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 mandates that all Australian-based crypto exchanges are registered with AUSTRAC and adhere to specific security requirements.
Is Crypto Subject To Capital Gains Tax?
If capital or financial gains are met with the buying, trading, or selling of crypto, then it will be subject to Capital Gains Tax (CGT) under the Australian Tax Office (ATO) regulations. This typically applies to individual investors. On the other hand, traders who earn crypto as payment resulting from commercial business will likely incur Income Tax.
For more information, read our guide on Australian crypto tax and consult a financial advisor.
Can I Buy Crypto With A Credit Card?
Cryptocurrencies can be purchased using a credit card however it depends on what exchange you are using as not all with provide this service. An exchange that accepts credit card as a method to make AUD deposits will be essential. The fees are typically higher however the method provides a level of convenience. Reputable and trustworthy exchanges should be used to buy crypto with a credit card such as Binance or Coinbase.