How To Buy Ethereum (ETH) In New Zealand: A Beginner's Guide
In terms of market capitalization, Ethereum (ETH) is the second-largest cryptocurrency in the world. Users on the network are able to create, publish, monetize and use applications with Ether being the form of currency for payment. The blockchain is different from other blockchains as it is able to perform computations as part of the mining process. It is this computational ability that turns a store of value and medium of exchange into a decentralized computing engine and data store that can be verified.
Ethereum is available for purchase by everyday New Zealanders as well as seasoned traders using the best crypto exchanges in New Zealand. So how does one buy Ethereum in NZ? This step-by-step guide outlines the process that a beginner can undertake to start their ETH investment journey. To aid with the explanatory process, we have used Swyftx as the cryptocurrency exchange. Based on our research, Swyftx is the best overall crypto exchange in New Zealand to buy, trade, and sell Ethereum.
This guide provides a step-by-step process on how to buy Ethereum with a New Zealand exchange. If you are looking for guided information on other popular topics such as the best crypto exchanges in NZ or how to buy other digital assets, you can find the links below.
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How To Buy Ethereum In New Zealand
An overview of the five steps to buy Ethereum in NZ is as follows:
- Open an account with Swyftx
- Verify your identity and activate 2 Factor Authentication (2FA)
- Deposit New Zealand Dollars (NZD) funds into your account
- Enter in the amount of ETH to buy
- Review the transaction details and confirm
Guide to Buying Ethereum in New Zealand
Step 1 - Opening 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 licensed under New Zealand local regulations, it is legally required to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. As such, ID verification must be completed before any NZD 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 an SMS message to the nominated phone number.
- Identity – Swyftx will require copies of one New Zealand government-issued document such as a passport or driver’s license.
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 NZD Into Your Account
Before Ethereum can be purchased, New Zealand 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 New Zealand exchanges will offer several ways to deposit NZD, 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 NZD 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 NZD funds into the wallet.
Step 4 - 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 NZD in the wallet and available to spend.
- The current market price of Ethereum.
- Several order types (market, limit, stop and recurring)
The default order type is “Market” which allows beginner investors to easily and quickly purchase Bitcoin 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. Customers will have the option of either entering in the amount of ETH they want to purchase, or the amount of NZD they want to spend to buy Ethereum.
Step 5 - Review & Confirm The Purchase
After an amount of NZD is entered in, the amount of Ethereum 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 NZD funds recovered.
Buying Ethereum In New Zealand: Things You Should Know
What Is Ethereum?
Ethereum is a blockchain platform with its own form of cryptocurrency called Ether (ETH). The blockchain network is decentralised and public ledger that is used for verifying and recording transactions. Applications used on the Ethereum blockchain are referred to as “Distributed Applications” (dApps). In terms of market capitalisation, Ethereum is second in market value only to Bitcoin.
The Evolution of Ethereum
Ethereum was launched in July 2015 by Joe Lubin, founder of ConsenSys, and Vitalik Buterin. Joe is a blockchain applications developer that uses the Ethereum network. Vitalik had a major involvement in the original Ethereum concept and now serves as its CEO and public face.
In December 2020, the Ethereum blockchain received a major upgrade. Ethereum 2.0, or “Serenity”, was launched to enhance the speed, efficiency, and scalability of the network so that it could process more transactions and ease bottlenecks. Instead of using the Ethereum 1.0 Proof-of-Work system, Ethereum 2.0 utilises a Proof-of-Stake mechanism.
The EIP 1559 upgrade was released to updates transaction fees on the Ethereum blockchain. The change makes the network more efficient by using a hybrid system to evenly incentivise miners in periods of high and low network congestion.
Is Buying Ethereum Legal In New Zealand?
The purchasing, trading, and selling of Ethereum and other digital assets is legal in New Zealand. Ownership of Ethereum is recognised as property by the NZ government and is therefore subject to Capital Gains Tax (CGT). 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 NZ-based crypto exchanges are registered with AUSTRAC and adhere to specific security requirements.
What Is The Best Platform To Buy Ethereum In New Zealand?
Based on our review of top New Zealand-based crypto exchanges, Swyftx is our recommendation for buying Ethereum. Swyftx is suited for Kiwi beginner and experienced traders and investors alike. In addition to Ethereum, it supports a vast list of tradable assets including all the major cryptocurrencies as well as altcoins, and should appeal to those who want to have more potential trading options and strategies for their portfolio. Further, the trading interface is well designed to offer a streamlined trading experience. Swyftx also offer one of the lowest trading fees in the market.
How Do I Choose A Crypto Exchange?
With so many New Zealand-based crypto exchanges available, beginners may find it difficult to know which exchange is best for them. Before you start buying Ethereum, 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) that is simplistic, intuitive to use, and therefore making the trading experience easier and more enjoyable. Features that beginners should be on the lookout for include instant deposits and withdrawals, instant buying, and selling.
- Deposit Method – The method of depositing NZD 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 the speed of the transaction should also be considered.
- Fees – Kiwis should be aware of the various fees that may be incurred when trading Ethereum 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. Ethereum to Cardano). Although not considered a fee, spreads will apply to each transaction. The spread is the difference between the buy and sells price for a quoted cryptocurrency.
- Supported Crypto – Almost all exchanges will provide Ethereum 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 the local government authority. Industry-standard security measures for NZ 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 chatbot.
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. NZD) is traded for crypto (e.g. ETH).
- 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
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 Ethereum In New Zealand
Deciding on how to store Ethereum in NZ comes down to two options. Firstly, Ethereum 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 ETH 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 ETH available for frequent buying, trading, and selling.
- Cold storage refers to a physical means of keeping crypto in a storage device and is 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, ETH 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 Ethereum 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 Ethereum In New Zealand?
The purchasing, trading, and selling of Ethereum and other digital assets is legal in New Zealand. It is not recognized as a form of currency however is treated as property and is subject to taxation. New Zealand-based crypto platforms are licensed under local regulations to operate as digital currency service providers.
Can I Buy Ethereum Using A Credit Card?
Ethereum can be purchased using a credit card however it depends on what exchange you are using as not all with providing this service. An exchange that accepts credit cards as a method to make NZD 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 ETH with a credit card such as Binance or Coinbase.
Can I Buy Ethereum Using A Debit Card?
Several New Zealand crypto exchanges including Swyftx allow their customers to purchase Ethereum with a debit card. Customers using this method will need to be aware of any fees and the time required to execute the transaction.
How Long Does It Take To Transfer Ethereum?
An Ethereum transaction confirmation is completed on average in 16 seconds, and between 1 to 5 minutes if more confirmations are required to validate the transaction. Transactions are reliant on the imposed security features of each wallet. If the network is busy and transactions are sent without paying the premium “tip,” transactions can be delayed because miners prioritize higher fee transactions.