How can you buy bitcoin in Australia?

There’s been a lot of hype surrounding bitcoin, thanks to the record-high prices the cryptocurrency has seen in recent years. Its popularity is expected to continue to rise as experts predict that bitcoin could continue to see new all-time highs. 

The buzz is now prompting many investors to get their hands (virtually, at least) on some of the digital currency. And as bitcoin grows to become the preferred alternative to traditional banking, more consumers are also looking to purchase it. 

If it has piqued your interest and you’re clueless on how to start trading or using this digital currency, don’t worry. Here is our step-by-step guide on how you can buy bitcoins in Australia.  

What is bitcoin? 

Before buying bitcoin, it’s best to understand what it is and how it works. 

Bitcoin is a digital cryptocurrency invented by an anonymous source known only as “Satoshi Nakamoto” in 2009. There’s fierce debate as to whether or not “Satoshi” is a single entity or a collective. Regardless of its origin, bitcoin is considered to be the biggest and oldest cryptocurrency in the world.

One main feature of bitcoin is that it is decentralised – this means that it is not issued and regulated by any government body (e.g. central banks) or company. Bitcoin transactions are made on a peer-to-peer network online. The technology behind bitcoin is called a blockchain, which is generally an electronic ledger of digital activities. This ledger is shared or distributed between innumerable parties, without an intermediate central authority verifying each transaction manually. In traditional financial transactions, institutions such as banks confirm these transactions.

One main appeal of bitcoin is the anonymity it offers. While transactions are recorded and can be made public, they are only linked with an electronic address. This means that whatever you choose to buy with your bitcoins, the purchase cannot be traced to you. Unlike fiat or traditional currencies like the Australian dollar, bitcoins cannot be printed and only a certain amount of bitcoin can be “mined” or created.  

Want to know more about bitcoin and other cryptocurrencies? We’ve got you covered. Watch this video or read here to learn more about digital currencies.  

Where can I purchase bitcoin?

Buying cryptocurrency may sound intimidating at first, but knowing where to purchase is your first step. There are hundreds of platforms that you can choose from, but they are mainly separated into the following categories: 

Bitcoin brokers

Traditionally, a broker is a firm or individual that acts as a middleman for people who want to exchange money for a product or service. With digital currencies, a crypto broker provides services for those who want to buy or sell digital currencies at set prices. You can use traditional currencies such as the Australian dollar using a payment method that is familiar to most buyers, like a credit card, debit card or a bank transfer. 

They offer user-friendly platforms and are considered to be the fastest and easiest way to buy bitcoins. Because of this, they offer the most suitable environment for users who are just getting started with cryptocurrency markets and who are looking to buy bitcoin. 

However, their convenience comes with a price. For providing this service, a broker charges premiums for using the platform. One main disadvantage of exchanges is that they often charge higher fees compared with other options. If you do decide to trade with a bitcoin broker, it’s a good idea to compare the fees and costs charged before signing up. 

Bitcoin cryptocurrency exchange 

If you are an intermediate trader and you are interested in trading cryptocurrencies directly with other buyers and sellers, a bitcoin cryptocurrency exchange may be the best option for you. In contrast to brokers, a crypto exchange provides an online platform for buyers and sellers where you can transact with fiat currency and other digital currencies as a payment option. This means that the exchange of traditional money and crypto happens directly between buyers and sellers, with the exchange operator providing a platform where it can take place. 

Platforms like these tend to have low fees and offer better rates compared with brokers. They also offer access to a wider range of coins and can also be used to actively trade cryptocurrencies. 

The main downside of crypto exchanges is that they’re more difficult to use and will require you to have knowledge of trading concepts. As mentioned, these platforms are suitable for advanced traders and holders of cryptocurrencies who want to take advantage of price fluctuations, looking to make gains and prevent losses. 

Peer-to-peer (P2P) exchanges

Another type of bitcoin exchange you can use are peer-to-peer (P2P) exchanges. People can post notices in these platforms whether they are looking to buy or sell bitcoin and what their price is. Involved parties on P2P exchanges directly contact each other and trade without intermediaries. 

With this set-up, it’s possible to access a wider range of payment methods, including cash deposit. It also gives greater privacy to users. 

But users need to be careful when using P2P exchanges. Prices on P2Ps are often higher than the market exchange rates. You also need to look out for bitcoin scammers on these platforms. 

How to buy bitcoin in Australia

Step 1: Choose a cryptocurrency exchange platform 

There are plenty of bitcoin exchanges available in Australia. As mentioned above, you can choose to buy from bitcoin brokers, cryptocurrency exchanges and peer-to-peer (P2P) exchanges. If you’ve decided to buy bitcoin, you should be aware of the cost of the services offered by the platform. 

Compare your options and choose one with features that you think will work best for you. 

Step 2: Create your account 

Register for an account with a cryptocurrency exchange. To create an account, you will need to verify your email address and identity. Then, you can choose from a range of payment methods to deposit funds so you can start buying and selling digital assets.

Step 3: Deposit funds 

Once your account has been verified, you can now deposit your money to purchase bitcoins. Choose the best method that works for you – bank transfer, debit card and credit cards are all widely accepted. Go to the deposits section of the platform, then select your preferred payment method and confirm.

Step 4: Buy bitcoin 

You can now exchange your funds for bitcoin. Go to the buy section of the platform and select the cryptocurrency you want to buy (in this case, choose the option for bitcoin). Enter how much you want to buy, or how much you want to spend.

Step 5: Double check the details and confirm your purchase

Before completing your purchase, make sure that the details you entered are correct. After buying bitcoin, it usually gets sent to your account. 

It’s recommended to use a digital bitcoin wallet rather than an exchange for storing your bitcoin for easier transactions and for security purposes. A bitcoin wallet is a software program or application in which bitcoins are stored.There are several bitcoin wallet applications that can be downloaded from the Apple or Google Play stores. For more tips on how to keep your cryptocurrencies safe, read here. 

What can I do with bitcoin?

Now that you know how to buy bitcoins, you’re probably wondering where you can use your digital currencies. As bitcoin continues to become more popular in Australia, the range of things you can spend your crypto on is getting wider. This means you could be paying for anything from your groceries to your debt with bitcoins in the future. Business owners, retailers and individuals can also choose to accept bitcoin for goods and services payments if they have a bitcoin wallet to receive or store the currency. 

For investors, the future of crypto trading looks promising. Recent research by the Independent Reserve Cryptocurrency Index (IRCI) has found that 16.8 per cent of Australians own some cryptocurrency.

According to Independent Reserve CEO Adrian Przelozny, “Like the property market for the generations before them, younger Australians are seeing cryptocurrency as a method of increasing their overall wealth in the long term.”

He highlighted that “as we see our market continue to mature, we should see the majority of Millennials and Gen Zs owning some cryptocurrency in the next five years, which will truly move us into the mainstream investment category”.