How to Invest in Cryptocurrency – Investing in Cryptocurrency Australia 2021

Fact Checked by Gary McFarlane

A cryptocurrency is a digital currency that works based on a ledger database system and is protected by cryptography encryption, making counterfeiting and double-spending practically impractical. Several cryptocurrencies are built on blockchain technology, a distributed record enforced by a global network of computers. Cryptocurrencies are well known because they are typically not issued nor controlled by any centralized authority, making them potentially impervious to government meddling or manipulation.

In this article, we will teach you how to invest in cryptocurrency in Australia, discuss some of the major crypto platforms available to Australians and thoroughly investigate their features, fees, pros and cons.

Table of Contents

#1 Broker for Cryptocurrency Investing Australia – eToro

1
$50Exclusive promotion
Our score10
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% Commissionstart TradingOur score 10

How to Invest in Cryptocurrency – Step by Step Guide 2021

If you are going to start trading cryptocurrencies you might want to take advantage of advanced analysis tools, charting techniques, innovative features such as social trading, rich learning resources and a mobile app so you can trade on the go. eToro is a regulated brokerage that added cryptocurrency trading to its platform as early as 2013 and offers all of the features you may need as a cryptocurrency trader. You can get started with eToro in less than 5 minutes by following these steps.

  • Step 1: Open an eToro account: You can get started by signing up for an eToro account for free. We recommend eToro because they offer innovative features, good security features and a state-of-art trading platform. To get started with eToro just type “eToro.com” into your browser, press the “Join Now” button, and fill in the required details.
  • Step 2: Verify your Identity: Your account will also need to be verified before you can start actively trading cryptocurrencies in Australia. The process is straightforward and quick. You’ll need a photo ID (passport, driving licence) and proof of address (utility bill, bank statement).
  • Step 3: Fund your account: Having a verified eToro account means you are very close to being able to start trading cryptocurrencies. At this point, all you need is to make deposits to your account so you can buy or sell crypto. Just click on “Deposit Funds”, enter the amount you want to invest and press “Deposit”.
  • Step 4: Invest in Shares: Finally you will be able to buy or sell any of the cryptocurrencies offered on the cryptocurrency brokerage platform. Type the name of a cryptocurrency such as “Ethereum” or “ETH” into the search bar, press “Trade”, enter however much you’d like to invest, and press “Buy” to buy that cryptocurrency.

Where to Invest in Cryptocurrency – Choose a Broker Australia 

While crypto holds a promise of facilitating transfers between people or institutions in an accessible and secure way, blockchain is also capable of this with high security. Bitcoin is definitely the most popular cryptocurrency in Australia, with Etherum, Litecoin, Dogecoin, Binance Coin and Cardano following it closely.

You can use different platforms to buy and sell cryptocurrencies, and in this article, we will discuss some of those trading platforms that you can use while in Australia.

1. eToro – Best Overall Way to Invest in Cryptocurrency in Australia

eToro is a cryptocurrency trading platform where you can start trading cryptocurrency for as little as $50. eToro allows users to follow the moves of chosen traders with proven track records through the copy trading feature which they famously pioneered. After you’ve followed a few traders, your News Feed will show you everything they’ve done recently. Whether it’s their opinions on something or their current investment activity, you might be able to learn something valuable about trading cryptocurrencies that might aid you in making your own decisions later. We are definitely fans of the “social trading” aspect of eToro.

However, keep in mind the risks of dealing with such highly speculative assets. Anyone new to trading will find eToro to be a valuable all-around platform for that reason. It includes everything you might want in a trading system, from an easy-to-use interface to rich learning resources to grow and perform well sustainably. It’s also a perfect place to go if you really want to see others’ trading strategies and meet investors who might be able to demonstrate different cryptocurrency strategies for you.

Security & Privacy

The Financial Conduct Authority (FCA) regulates eToro in the United Kingdom, while the Australian Securities and Investment Commission (ASIC) regulates the company in Australia. The Cyprus Securities and Exchange Commission governs all other clients handled by a Cypriot unit (CySEC). The actual money you put into your eToro account are stored in regulated and registered US banks and are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.

eToro app and website log in are secured with 2-factor authentication. No one at eToro has the authority to move cryptocurrency out of their cold storage (physical storage) system. Furthermore, eToro employs cutting-edge monitoring software to detect and prevent fraudulent actions like money laundering. A professional security operations centre (SOC) staff monitors and protects its infrastructure around the clock, and according to them, they send data through encrypted transport layer security (TLS). This is supposed to make the leakage in data almost impossible ensuring further privacy.

Fees & Features

The costs on eToro are purely dependent on the spread – the difference between what a cryptocurrency sells for and what you pay for it. This spread varies with each crypto asset, and eToro warns that it may change depending on market circumstances. eToro claims that you will only be charged once for each of your assets when you buy rather than twice when you buy and sell which is a welcome reduction to avoid double charging of investors based on the spread.

The following are the current spreading fees for some of the popular cryptocurrencies on eToro:
Bitcoin (BTC): 0.75%
Ethereum (ETH): 1.90%
Bitcoin Cash (BCH): 1.90%
Litecoin (LTC): 1.90%
Dash (DASH): 2.90%.

eToro Fees

Fee Type Fee Amount
Commission Fee 0%
Deposit Fee £0
Withdrawal Fee £5
Inactivity Fee £10 (Monthly)

 

Pros

  • Many cryptocurrencies that can be traded 24/7
  • Easy-to-use website and mobile app
  • A small number of funds are needed to begin investing.
  • Great community for cryptocurrency traders
  • No fees on deposits
  • Rich cryptocurrency learning resources

Cons

  • Spreads for trading cryptocurrencies are relatively wide
  • $25 minimum to trade any cryptocurrency

67% of retail investor accounts lose money when trading CFDs with this provider.

2. Woo Network – Best Platform for Low-Fees to Invest in Cryptocurrency in Australia

Woo Network is a deep liquidity network that provides access to best-in-class liquidity and trading execution at little to no cost to traders, exchanges, institutions, and Defi platforms. By providing deeper trading depth, WOO Network’s solutions assist in easing the pain points of thin liquidity, excessive fees, and unfavourable trading conditions in the cryptocurrency market across CeFi and Defi.

Security & Privacy

The importance of security in the digital asset area cannot be overstated. One of the reasons many individuals are afraid to enter the cryptocurrency ecosystem is security. The Gnosis solution requires a certain number of signatures to confirm transactions, prohibiting theft or illegal access to cash. WOO X is the exchange service of Woo Network while Wootrade is the institutional B2B solution for trading. WOO X and Wootrade never hold the funds because all payments and withdrawals are handled by a third party. These assets are thus held in a combination of hot and cold wallets, minimizing the potential of accidents on a new platform like WOO X and eliminating a single point of failure.

Fees & Features

The Woo Network charges different fees for different types of transactions, and the fees are very minimal, yet we think you need to know about it to make a decision. Woo Network claims that you can enjoy the lowest costs in the market with 0 to 0.05 % taker fees. Spot/Margin trading fees are deducted from the currency you receive. A purchasing order on the BTC/USDT exchange, for example, will be charged fees in BTC. The costs for a selling order will be charged in USDT.

Fee Discounts have a maximum of 50,000 orders every 24 hours. When users’ daily order count reaches 49,999, their charging tier will immediately reset to Tier 0. Each day at 00:00 (UTC), the ordering counter is reset to zero. Users revert to their old trading charge tier depending on the quantity of WOO staked after the ordering counts reset. All other staking advantages remain unaffected.

Overall Woo Network has well-built platforms with quality charting features and intuitive user interfaces. This cryptocurrency exchange solution can be attractive for advanced traders who enjoy taking advantage of insight provided by market depth while trading high volumes at reduced fee levels.

Woo Network Fees

Fee Type Amount
Commission 0 to 0.05% taker fees
Withdrawal Fee Depends on the cryptocurrency
Deposit Fee $0
Inactivity Fee $0

 

Pros

  • Robust liquidity with both feature and spot trading
  • World-class tools and insights for better trading.
  • VIP service is available for a better experience.
  • 24/5 multilingual customer service.

Cons

  • WOO Token utility seems limited when compared to other exchange currencies.
  • Wootrade’s environment is still very new and can be a bit unstable on different operating systems

67% of retail investor accounts lose money when trading CFDs with this provider.

3. BitMart – Best Platform for Beginner-Friendliness to Invest in Cryptocurrency in Australia

BitMart is a prominent digital asset marketplace that allows users to swap virtual currencies or cryptocurrencies for other valuable assets such as fiat currency, stable coins or other digital currencies like Bitcoin and Ethereum. The trading platform has used an innovative multi-layer and multi-cluster system design to ensure the system’s reliability, security, and scalability.

BitMart supports the following languages: English, Mandarin, Japanese, and Vietnamese and since its start, BitMart has evolved significantly. Its user-friendly design and low-cost structure have been giving its competitors a run for their money. Unfortunately, if you are after very specific or small-cap crypto coins or tokens, it may be difficult to find them on Bitmart since the selection is somewhat limited. Having said that we really like the security and privacy measures taken by the crypto exchange.

Security & Privacy

Bitmart has a 2FA feature, which adds an extra layer of security to your account. No one may withdraw from a wallet without an email or phone confirmation code. BitMart will monitor and record the IP address of each login to further safeguard users’ accounts. BitMart allows customers to establish API keys with extensive read/write rights. Using our REST and WebSockets APIs, you may access the full capabilities of the platform if you are into development or quantitative trading.

All personally identifiable information about users, including ID numbers, names, and identification document scans are encrypted and securely kept. Your passwords are also hashed and saved in this manner. Nobody else has access to your account other than you. To secure the user’s asset, automatic protection against distributed denial of service (DOS) attacks is provided. Every few minutes, the system also automatically backs up all of the data in the database.

All web services are delivered through SSL-secured (HTTPS) channels. To increase the safety of digital assets, only less than 0.5 % of user funds are maintained in a hot wallet for everyday operation. More than 99% of the crypto assets are held in offline cold wallets to avoid feature loss, and funding from a cold wallet needs multiple signatures from numerous high-level users.

Fees & Features

On Bitmart, trading fees are calculated using daily trading volume (in BTC) and BMX balance over 30 days. Your 30-day trading volume and current BMX balance are examined every day at 00:00 AM (UTC). One hour later, your Tier level and associated maker/taker payments are changed accordingly. While this might not be a huge point for most investors, traders with very high volumes will be careful to have a favourable top-tier level to incur as little trading fees as possible.

While Bitmart does not charge any fee for depositing or a commission fee yet, Withdrawal fees are adjusted according to blockchain specific requirements. These transaction fees required to make transfers on the chain are called gas and every cryptocurrency has a different gas value based on its technology. Ethereum is known to have high gas fees that can reach 100s of dollars while some new blockchain technologies such as Avalanche, Fantom and Solana require a fraction of that and can enable transfers to be made for cents.

Bitmart Fees

Fee Type Fee Amount
Commission Fee 0%
Deposit Fee $0
Withdrawal Fee Depends on the cryptocurrency
Inactivity Fee $0

 

Pros

  • Over 90 crypto pairings are accessible for trading
  • On the futures market, you may get up to 100x leverage.
  • Get a 25% reduction on fees when you pay using the BMX token.
  • User-friendly interface

Cons

  • Advanced order types are limited (limit and market only)
  • Potential problems with liquidity

67% of retail investor accounts lose money when trading CFDs with this provider.

Invest in Cryptocurrency in Australia – Broker Price Comparison

We created a comparison chart regarding the fee structures of different cryptocurrency brokerage platforms, here is a fee comparison table between eToro, Woo Network and Bitmart.

Broker Commission Deposit Fee Withdrawal Fee Inactivity Fee
eToro 0% £0 £5 £10 monthly (after 12 months inactivity)
Woo Network 0% $0 $0 $0
Bitmart 0% $0 $0 $0

What are the Different Ways to Invest in Cryptocurrency in Australia?

In recent years, cryptocurrencies have gained immense popularity as a form new asset type named crypto assets. This digital form of currency has opened numerous possibilities when it comes to contactless payments, fundraising methods and financial instruments. Read more to explore how you can invest in cryptocurrencies in Australia and what opportunities or shortcomings the journey could entail.

Coins

A coin represents a form of cryptocurrency which is primarily associated with a particular blockchain. The most widely known type of coin, Bitcoin, is from the Bitcoin blockchain and was launched in 2009 to offer peer-to-peer money transfers. Aside from transferring value, the coins are used in the transaction as gas to pay for fees and verification of the transaction. Coins are mainly used as a mode of payment to purchase items like any other form of currency but they are digital and encrypted with cryptography methods. There is no physical movement of coins when a transaction is made; only the ledger gets updated.

Tokens

Although tokens and coins are often used interchangeably, unlike coins, tokens usually represent projects based on a specific blockchain. Tokens are created on an existing chain and might share some of the characteristics of the original blockchain and its coin. For example, Augur, BAT, 0x, OMG and Civic are popular and widely used tokens on the Ethereum blockchain. There are smart contracts for every blockchain that come into play when dealing with tokens that facilitate the transaction process. Tokens are usually highly correlated with the cryptocurrency or coin of the chain they are on. However, it’s possible to observe decoupling. If a token is highly successful and innovative its performance can surpass the main cryptocurrency of its blockchain.

Cryptocurrency CFDs (Contract for Difference)

Traders use a Contract for Difference (CFD) to speculate regarding the prices of a particular financial instrument such as stock, index, forex, or commodity. This particular trading innovation has been getting very popular for cryptocurrency trading as well. A cryptocurrency CFD is used to make a price bet for a specific cryptocurrency.

If you anticipate the price of the cryptocurrency to rise, you can choose the long position, and if you expect the price to fall, you can take a short position. Therefore, you receive the difference in the price when the contract is closed. So, when you invest in a cryptocurrency CFD on a trading platform such as eToro, you are likely investing in a CFD product of a specific coin or token. Recently we are also seeing crypto ETFs and even tokenized company shares that can also be seen as crypto CFDs.

Cryptocurrency ETFs (Exchange-Traded Fund)

An Exchange-Traded Fund (ETF) tracks the movement of particular financial instruments. It can be a basket of different assets or crypto assets. After regulatory approvals, ProShares Bitcoin Strategy ETF (BITO) has become the first approved Bitcoin ETF that can be listed and traded on the exchange. The first mover Bitcoin ETF jumped 4.8% and closed at $41.94 on its first trading day. This ETF already provides a great opportunity to speculate the price movements of the underlying crypto asset Bitcoin rather than buying Bitcoin itself.

And now, Van Eck is filing an application with US SEC for Bitcoin Strategy ETF (XBTF) which will provide great competition for fund fees that are already low and serve the investors in that way. After the initial we expect cryptocurrency ETF activity to surge and bring incredible dynamism to this ecosystem while making cryptocurrencies more accessible and legitimate in investors’ eyes. If a brokerage platform adapts a crypto-ETF, they could also potentially provide a CFD product based on this financial instrument which could be attractive for some traders that want to optimize their risk profile based on the compositions of professional funds.

Best Ways to Invest in Cryptocurrency in Australia

With thousands of varieties, cryptocurrencies have caught the eye of numerous investors and traders, especially those who wish to move beyond traditional forms of investments. The concept of crypto-investing is still relatively in its infancy; however, an increasing number of people are keen on exploring the gains some of these projects could potentially bring. Here are some ways through which one can invest in cryptocurrency.

Investing in Cryptocurrency Coins

One of the most straightforward ways of investing in cryptocurrency would be to buy cryptocurrency coins or CFD products based on them. For this purpose, investors can use the services of cryptocurrency brokerage platforms or they can manually create ‘wallets’ to carry the cryptocurrency positions in their custody. This wallet is generally created through a platform or medium, which is then used to invest in cryptocurrencies. According to Forbes, the top three largest cryptocurrencies are Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB) in 2021, with a market capitalization of nearly $1.2 trillion, $0.5 trillion and $82 billion, respectively.

Investing in Cryptocurrency Tokens

Another common way of investing in cryptocurrency is through tokens. While coins only represent digital currency, a token can represent other functions and utilities as well as governance rights in addition to currency privileges. Coins may often be used to buy these tokens that serve as digital assets. However, tokens can have more experimental natures and investors should be careful about factors like; the intentions and qualifications of the founding team members, whitepaper quality, legal implications market positioning and liquidity of the tokens they are trading or investing in. A common way to invest in tokens is also to buy or sell them in CFD form through reputable brokerages like eToro.

Investing in Cryptocurrency CFDs

CFDs have become a sought-after choice when trading with cryptocurrencies. A CFD provides the benefits of leverage where a trader can take up a more prominent position with less amount of money, thereby increasing the margins. However, as the opportunities to gain more returns increase, so does the risk of losses, making leverage both an advantage and disadvantage. Two prominent brokers that deal in cryptocurrency CFDs are eToro and Bitmart. In addition to easy access and leverage advantages, CFDs also make it very convenient to short a crypto asset without the hassle of borrowing the underlying asset additionally.

Investing in Cryptocurrency ETFs

ETFs might be the next exciting development in the investment world of crypto assets. On the 15th of October 2021, SEC finally approved the first Bitcoin ETF by ProShares following their application filing last summer. Bitcoin Strategy ETF or BITO already started trading on the exchange and this will likely plough the way for many other cryptocurrency-focused ETFs. A cryptocurrency ETF may exclusively be made up of various cryptocurrencies, like Bitcoin or Ethereum, and provide high-quality risk management opportunities that are otherwise more difficult to achieve.

Is Cryptocurrency a Good Investment?

Many people are becoming aware of the dynamic nature of cryptocurrencies and the immense opportunities they may present. However, some people are still uncertain if it would be a lucrative form of investment or if cryptocurrencies are here to stay. Here are a few potential advantages to consider before trading cryptocurrencies in Australia.

Bleeding Edge Technology

There is no doubt about technological advancements that have been introduced with the launch of cryptocurrencies. The blockchain technology utilized for cryptocurrencies is not limited to cryptocurrency markets; instead, this next-generation medium is used across computers, thus enhancing the IT industry along with Art, Fintech and other industries. Cryptocurrencies are experiencing a similar interest in the world of investments as any financial instrument dealing with highly innovative technology. While cryptocurrencies allow for a more significant opportunity to gain potentially high returns, they might come with an increased risk component as well.

Rich Ecosystem

In late October 2022, the total market capitalization of the cryptocurrency ecosystem reached nearly $2.7 trillion and it looks like it will not stop growing anytime soon. The cryptocurrency and blockchain ecosystem are highly diverse and versatile. It provides an instant and convenient way to explore a wide array of investment options with direct control. One prominent feature of cryptocurrency itself is its 24/7 availability; you can make a transaction at any time of the day. With the brightest minds developing new projects on the chain around the clock, it’s not a surprise that investors and smart money are showing high interest in cryptocurrencies for impactful outcomes and expected high returns.

Efficient Buying and Selling

The buying and selling process is unique. The transactions made through this system can’t be reversed; in other words, an already created block can’t be altered. The system is based on transparency, where every transaction is verified with minimal possibility of hacking on the chain. Compared to usual bank transactions, the fees charged while making a transaction with cryptocurrency are generally low. But where crypto really shines is its lightning-fast cross-border applications. Using many fast blockchains and even scaling solutions on slow blockchains, it’s possible to transfer value almost instantly between countries that are apart from each other thousands of miles away. This seems to be a major advantage on the traditional bank transfers or transferring of physical fiat money.

Investing in Cryptocurrency – What are the Risks?

As cryptocurrencies are a relatively new phenomenon, people are still discovering their technology and financial implications. Like with any investment, cryptocurrencies have a few shortcomings that need to be considered before investing money. Here are a few of them.

Regulatory Ambiguity

One major factor that makes cryptocurrencies and trading less secure is the lack of regulation by the government or banks. Cryptocurrencies play the role of money, but in reality, their value is based on the perceived value the investors and traders have for it. So this makes it extremely risky if they are no longer thought to be of value someday. If global governments were to start bringing strict regulations to the discussion we could see plunging prices in crypto ecosystems.

Uncharted Seas

There is a lot that still needs to be explored in the cryptocurrency market since it hasn’t been there for long. As there is advancement in technology and IT solutions for the betterment, the possibility of innovative techniques for cybercrime and hacking also increases. In other words, there is a lot of uncertainty or unknown factors that make cryptocurrencies and investing in them less stable or a high-risk option for investors. Additionally, we are not exactly sure how to value crypto projects or even how to make use of blockchain to its full extend. As the technology gets more mature things will be more clear for investors and traders.

High Volatility

Cryptocurrencies are some of the most volatile assets to invest in. Recent observations in the market indicate that the price and value of cryptocurrencies show a pattern that is erratic with many ups and downs. This factor makes the market unstable to a great extent, with the possibility of incurring heavy losses. Therefore, risk-averse investors may not be inclined to put their money on cryptocurrencies.

How to Invest in Cryptocurrency in Australia with eToro

It can be confusing and intimidating to get started with brokerage accounts but it doesn’t have to be so. eToro is available to Australian clients and buying cryptocurrency is not an illegal activity in the region. You can follow the simple steps explained below to get started in your cryptocurrency journey with eToro.

Step 1: Open an account with eToro

You can create an eToro account for free and the process will only take a couple of minutes. After creating an account you can start benefiting from rich learning resources (both for traditional financial assets and cryptocurrencies), charting tools, demo accounts, mobile platforms, copy trading and other advanced features as well as trading cryptocurrencies. Just type “eToro.com” into your browser, press “Join Now” and fill in the necessary details.

67% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Verify your account

After signing up for an eToro account, you will be ready to start the verification process. This process assures eToro and its clients are complying with the KYC and AML regulations. Simply, provide a photo ID (passport, driving licence) and proof of address (bank statement, utility bill) and your account should be verified in less than 15 minutes.

Step 3: Fund your account

After having a verified account, it’s crucial to deposit funds in it so you can start trading cryptocurrencies on the platform. Depositing fiat money on eToro is commission-free. Just choose your deposit method and click on “Deposit Funds” and enter the amount you want to deposit. Then press “Deposit” and your funds will be transferred. eToro offers are credit/debit cards, e-wallet (PayPal, Skrill, etc), and bank transfer which is very convenient.

Step 4: Invest in Crypto!

Once you have a funded and verified eToro account you can start buying and selling cryptocurrencies on the platform. To start trading, just type the name of a cryptocurrency such as “ETH” into the eToro search bar, press “Trade” and proceed with the amount you’d like to invest by pressing “Buy”. Congratulations now you are invested in cryptocurrencies!

Conclusion

Some investors may be eager, while others remain highly sceptical about cryptocurrencies. Regardless, it is evident cryptocurrencies have drastically altered the technological and financial landscape and are likely to have an increased impact in the near and far future. Therefore, investors need to thoroughly explore the several ways of investing in cryptocurrencies, the expected benefits, and adverse implications before making an investment.

If you need a platform to start trading cryptocurrency we recommend world-renowned eToro with its rich learning resources, favourable fees and advanced trading platforms.

#1 Broker for Cryptocurrency Investing in Australia – eToro

1
$50Exclusive promotion
Our score10
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% Commissionstart TradingOur score 10

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About Umut Sagir PRO INVESTOR

Finance and Tech professional. Founder of HolyPython.com. In recent years, Umut helped reputable clients such as MasterCard New York HQ, Deutsche Bank, FluidAI, Danske Commodities, EvoShave and others with cutting-edge technology implementations and financial research.