Buying cryptocurrency for the first time can be overwhelming. In this article we discuss how Australians can get started in cryptocurrency investing.
Once you have identified the coin you want to own the next question is ‘how do I buy it?’. Investing in cryptocurrency is typically done through an online exchange. Similar to a stock broker on the ASX, you would sign on to a cryptocurrency exchange and go through their identity checks before being able to trade. There are a number of reputable cryptocurrency exchanges in Australia were setting up an account is fairly straightforward. Among some of the most popular exchanges are Coinspot, Independent Reserve, BTC Markets and Coinjar.
How to buy Cryptocurrency
- Does this exchange offer the coin I want to buy? Some exchanges will only deal in a handful of the most popular coins. Other exchanges could offer hundreds of potential alt-coins
- How does this exchange accept payment? All Australian-based exchanges will accept deposits in AUD, however they may vary on how this payment is accepted. For example, some exchanges will accept direct bank deposits or Polipays whereas others will require you to pay by credit card. Key is determining if the exchange accepts fiat deposits and, if so, in what currency.
- Website reviews and security. Credibility is key when it comes to choosing the best exchange, especially if you are opting to store your coins on an exchange-hosted wallet. Once you purchase your coin you need to determine where you want to store them - you can either take them offline (cold wallet) or keep them in a 'hot' wallet, or one that is directly connected to the internet. You need to be aware of the security risks around leaving your coins in an online wallet.
You may discover that the coin you want to purchase is not supported by any Australian exchange. In this case, you would need to open an account on an offshore exchange where the coin is available and then convert your Australian dollars to another fiat currency to purchase. Some examples of offshore exchanges include Gatehub (Europe), Bitstamp (United States) or Coinbase (United States).
What's it going to cost?
Beyond just the sticker price of the coin itself there are a few factors to consider when calculating the total cost of your crypto purchase:
- Trading Fees - these are the fees (usually a % base) that exchanges will charge you to purchase coins on their platform. They may be broken down into ‘instant buy’ fees and ‘market order’ fees depending on your specific method of purchase
- Deposit Fees - these are fees charged in relation to how you got your money onto the exchange. For example, cash deposits, Bpay, in-Ripple transfer, Polipay are all ways to fund your crypto wallet and may incur different fees
- Withdrawal Fee- the charge to take your coins off the exchange, either to your own hosted wallet or to cash out completely
- Exchange Rate Fees - if you are planning to purchase a coin on an offshore exchange that does not accept AUD deposits then you will need to exchange your Australian dollars to either USD or EUR. Using your bank for international money transfers will cost you up to 5.0% in the form of high transaction fees and really poor exchange rates.
It is crucial that you calculate and compare the costs associated with purchasing a coin across various exchanges both within and outside of Australia. In some instances you may find that although the coin you want to buy is available for purchase on an Australian exchange, the fees and other costs make it more expensive than purchasing the same coin on an offshore exchange in a currency other than AUD.
How can FlashFX help?
For Australians wanting to buy digital coins on exchanges that don't accept AUD deposits FlashFX can help. If you convert your money with a bank you could have diminished returns and lose out on trading opportunities due to the high costs and time delays.
That's where FlashFX comes in. We are an Australian-based online money transfer company and we can help you save time and money when it comes to crypto investing.
Built on Ripple distributed ledger technology FlashFX supports direct transfers to Gatehub (EUR, USD IOUs) and Bitstamp (USD IOUs). Simply deposit Australian dollars into your FlashFX account and agree your AUD conversion rate to send funds overseas to your digital wallet. We have zero transaction fees and guarantee a competitive exchange rate. Plus, your money arrives within SECONDS! FlashFX can also help you get your money off of Gatehub or Bitstamp and back into your Australian bank account.
When it comes to buying digital coins in a foreign currency the surest way to overpay is by letting your bank handle your international money transfer. Banks charge a large margin on foreign exchange conversion rates, in addition to international transfer fees. Taken together this can cost you up to 5.0% of your transfer amount. Plus, processing times can take days. You are better off going with an online money transfer service, like FlashFX, to send money overseas.
If you are looking for more information on how FlashFX can assist with your crypto investing check out our FAQ page here.