How To Buy Bitcoin
in Australia

Thinking of buying Bitcoin in Australia but do not know where to start? Learn about crypto exchanges, making deposits and how you can buy Bitcoin on eToro.

---

When it comes to investing, few things have grabbed the interest of new public traders and market veterans alike more than cryptoassets. And one crypto stands out above them all — Bitcoin. 

Whether you have always wanted to buy Bitcoin in Australia and think now is the right time, or you are still learning about crypto and want to make your first trade, this guide can help you better understand Bitcoin and learn how to add it to your portfolio.

Read on to learn more about the most popular cryptoasset in the world, crypto exchanges, how to trade Bitcoin in Australia, some things to consider when making your investment and ways to monitor it.

What is Bitcoin?

Bitcoin was the first type of cryptoasset in the world and has grown to become the largest. Crypto is a decentralised digital transaction tool, which means it is not controlled by any single bank, government institution or other organisation.

Bitcoin and other cryptoassets use blockchain technology, which records and stores transaction records. Cryptoassets are sent and received via digital crypto wallets and crypto exchanges, which act as marketplaces for trading crypto (more on these in a moment).

Bitcoin was invented by Satoshi Nakamoto in 2009. Nobody knows exactly who Nakamoto is — the creator could be one person or a group of people. 

Throughout its history, Bitcoin has built a reputation for being volatile. In July 2010, it made its first big jump from $.0008 in value to $.08 and has seen plenty of movement since. After a series of ups and downs, Bitcoin started to really rise in value (with accompanying dips, as well) in 2017. There was a lot of momentum behind Bitcoin in 2020 and into 2021. 

In November 2021, it hit an all-time high of $68,789.62. Since then, there have been more peaks and troughs in this popular cryptoasset.

What is a crypto exchange?

Traditionally, a crypto exchange is where people “meet” digitally to exchange Bitcoin and other types of crypto. As mentioned above, exchanges are platforms that can be considered a type of marketplace. They are important places when it comes to figuring out where to purchase Bitcoin in Australia.

Exchanges allow you to buy or sell Bitcoin and other cryptoassets as well as exchange one type of coin for another through the use of what is called trading pairs. This is similar to how forex trading works — two types of crypto are paired up to form an exchange rate. Some Bitcoin exchanges also allow you to use traditional currency — known as fiat money — to buy Bitcoin in Australia.

Different types of crypto exchanges

There are several different styles and methods of accessing crypto exchanges on which you can buy Bitcoin in Australia.

Cryptoasset trading platforms

Cryptoasset trading platforms such as eToro are good options for traders of varying investing experience. Most platforms have easy-to-use apps that let you monitor prices and trade with just a few taps. Many of these have some degree of centralisation, which means that there is an aspect of regulation or governance by the owner of the platform. That can potentially lead to more security when trading.

In general, you will make your chosen amount of crypto or fiat money available in your account to make exchanges. There are also decentralised exchanges and platforms that simply facilitate trading from one wallet to another. They never actually handle your crypto.

eToro is a popular option for crypto investors due to its ease of use, staking and leveraging options and wide range of cryptoassets available. There are also plenty of guides to help you start investing in Bitcoin and keep on top of the latest crypto news.

Bitcoin brokers

A Bitcoin broker, also known as a Bitcoin retailer, is an individual or business that trades Bitcoin directly to investors. This can be a great option for those in the earlier stages of learning how to invest in Bitcoin in Australia. 

Brokers act as a middle man between the crypto market and investors. Depending on which broker or retailer you use, you can perform crypto-to-crypto trades as well as purchase crypto using fiat money.

Peer-to-peer exchanges

Peer-to-peer exchanges give traders the chance to interact directly with other people. Sometimes there will be a third party involved to help ensure that the transaction goes smoothly and to help prevent fraud or scamming.

Derivatives platforms

A derivatives platform is another option for those who are more experienced and already know how to invest in Bitcoin. This generally involves agreeing with another party to buy or sell based on a future price point.

One of the most popular aspects of Bitcoin and other cryptoassets is the aforementioned lack of regulation or centralisation. But that can also come with some risk, as there can be less oversight and governance. That means it is important to research a cryptoasset exchange before you use it.

What should you look for in a crypto exchange?

With so many options out there, it is important to do some research when deciding where to buy Bitcoin in Australia. Here are some things to consider when determining which type of crypto exchange and which specific outlet works best for you:

Your experience 

As mentioned earlier, some platforms can feel more welcoming than others, which can make them better suited for crypto beginners. Brokers can make things easier, as can a range of apps that can suit traders, new and old, active and passive. You might want to avoid derivatives platforms until you have more investing experience.

Trading fees

As with any type of investing, any fees associated with trading or profit-taking should be considered when looking at different Bitcoin exchanges. These fees can add up, especially if you are a more active trader, and impact your margins.

Exchange options

If you want to buy Bitcoin in Australia with fiat currency or by exchanging other types of crypto, make sure you find an outlet that supports the currencies and cryptos you want to invest with and in. Most will feature Bitcoin trading capability.

Security

Has the exchange ever been hacked or experienced other types of security issues? Does it have two-factor authentication for logging in or market-leading security certification? If it does, it should be pretty easy to find out.

Word of mouth

The Bitcoin community is quite active digitally, with many spending time discussing the world of crypto on message boards and social media. While it is never smart to believe everything you read on the Internet, you can use these discussions and opinions to get a better idea of which exchange might suit you best. 

eToro’s trading platform offers opportunities for new traders and veterans alike. With low commission fees, secure trading and an active investor community, you can enjoy all of the benefits of the world’s leading social trading platform.

How do you make a deposit and purchase Bitcoin?

Once you have chosen an exchange and figured out a crypto investing strategy, it is time to make a deposit (or otherwise access your funds or other cryptoassets), so you can actually buy Bitcoin.

First, you need to set up an account. Often, this is similar to what you have done when you have set up an account on other online platforms and E-commerce sites. However, some crypto exchanges let you remain more anonymous, requiring little more than an email address and verification that you own that address. Others require more information upon sign-up.

As with purchasing other goods online, you will want to decide how you will fund your Bitcoin trading. Most outlets accept major credit and debit cards and bank transfers like those facilitated by services such as Osko and POLi. Some also accept BPay. 

It might surprise you to learn that you can sometimes buy Bitcoin in Australia with cash as well. There are even things called Bitcoin ATMs into which you can deposit cash to buy Bitcoin that is sent straight to your digital wallet. 

While potentially dangerous, conducting a peer-to-peer trade in person is another way you can potentially buy Bitcoin with cash. Some platforms even have agreements with newsagents that let you complete transactions with over-the-counter cash payments.

Whichever payment or exchange method you choose, remember one of the tips from above — check any associated transaction fees either from the exchange or your financial institution. These can add up quickly, especially if you are an active trader.

How to trade Bitcoin on eToro

Trading cryptoassets can be a very straightforward process. If you want to start investing Bitcoin on eToro, there are five steps you can follow:

• Step 1: Create an eToro account
• Step 2: Search for Bitcoin
• Step 3: Click on “Trade”
• Step 4: Insert your desired investment amount
• Step 5: Click on “Open Trade”

How to manage your risk when buying Bitcoin

Here are a few things to keep in mind.

What are some risks when buying Bitcoin?

One of the biggest risks when it comes to Bitcoin is its volatility.

Since 2017, when the cryptoasset really started to take off, it has continued to break through new price point barriers. But a lot of those highs also came with lows afterwards. This volatility leads to the same risk that all investments come with — the potential to lose all the money you have invested.

New regulations imposed by governing bodies on businesses or Bitcoin itself can have a huge impact on the price of Bitcoin.

As Bitcoin and other cryptoassets have become more successful, there could be a higher level of liquidity risk. This means that you might not be able to withdraw your Bitcoin in the fiat money you desire any time you want.

Finally, a Bitcoin risk that has less to do with its value and more to do with your personal situation is security, both in regards to your own crypto wallet and also Bitcoin exchanges. 

How to combat Bitcoin risk in your investment

Many of the same concepts that go into managing any sort of investment risk, such as currency trading strategies, can apply to Bitcoin. These can be especially helpful when dealing with such a volatile asset.

Perhaps the most important of these is having an exit strategy. This can be established in a variety of ways, one of which is having the discipline to set a number at which you will stop trading. Another is to set up a stop-loss point. This is an automated tool that will stop you from trading, or lower your trading volume when an asset drops to a certain value. 

It is important that your exit strategy takes the liquidity risk mentioned above into account.

Another good investment strategy across all markets is to diversify when possible. This can mean a few different things when buying Bitcoin. You might want to spread your investment across different cryptoassets, so if something happens to one of them, not all of your investment is compromised. It can be dangerous to get caught up in the wave of support for Bitcoin and dedicate too much of your capital to it. 

For security purposes, practising healthy, smart digital safety habits can go a long way towards keeping your crypto safe. This includes proper password storage and creation and using two-factor authentication. 

Another option is to treat your digital wallet like your real wallet. Would you have all of your money as cash sitting in your physical wallet? Of course not. So consider not keeping all of your crypto in your digital wallet either.

How to monitor your Bitcoin investment

Once you have made your Bitcoin investment, it is a good idea to know how to monitor it. Some more active traders like to know every rise and fall of each of their investments. Others choose a “set-and-forget” style of passive investing in which they check in periodically.

Here are a few tips and tricks that can suit a range of investing interest and activity levels:

• Set up alerts. This is a great option if you use an online platform to trade Bitcoin in Australia. An example of this is setting price alerts on eToro, which lets you enable notifications for real-time changes in value to assets like Bitcoin whether you have them in your portfolio or not.
• Do not get emotional. Investing based on fear, pride, sadness or any other emotion can be dangerous. Avoid investing based on emotion by setting target prices for entering and exiting the Bitcoin market. One example of this is the stop-loss point referenced earlier.
• Keep your eye on the big picture. Your investment in Bitcoin will depend on whether you view the coin as a long-term or short-term strategy. While both have their merits, it is your decision as to which method is best for the crypto.
• Read the news. Some successful traders will often know less about the day-to-day happenings of their portfolio’s value and more about the moves and news associated with the companies and organisations tied to their investments.

By knowing how to buy Bitcoin and invest in Australia and having a clearer picture of what to consider when doing so, you can potentially make a more informed decision about getting involved in the crypto market.

Ready to get started? Check out all the great features of the eToro Trading Platform, which can help you make your first Bitcoin investment today.

Join eToro and learn more about Bitcoin.

FAQs

What can you buy with Bitcoin in Australia?

In Australia, some retailers accept Bitcoin as a payment method. Select retailers, both online and bricks and mortar stores, allow customers to make transactions using the cryptoasset. Some retailers include accommodation providers, restaurants, fashion brands and more.

Is Bitcoin legal in Australia?

Yes, Bitcoin is legal in Australia. Australians are free to buy and sell the cryptoasset.

Is Bitcoin tax-free in Australia?

No, Bitcoin is not tax-free in Australia. The cryptoasset is subject to standard income tax and capital gains tax. It is important to refer to the Australian Tax Office’s (ATO) crypto tax resources for the latest information.