How to trade crypto in Australia [2022]

Publish Date 07 Apr 2022
Blockchain / 7 Min Read
Alex Lielacher / Last Update 07 Apr 2022

Crypto trading has become incredibly popular all over the world, and Australia is no exception, following the astronomical rise in prices found in the crypto markets in 2021.

When it comes to trading cryptocurrencies, there are a few important things to keep in mind.

In this guide we will explore the different ways you can trade crypto in Australia, as well as provide 5 simple steps to follow to start trading crypto in Australia today

Table of contents

Crypto is an exciting asset class

The crypto market is making waves in the global financial industry as many cryptocurrencies have set new all-time highs in the past twelve months. Their explosive and sustained growth have defied many experts’ predictions.

Bitcoin (BTC), for example, is currently the best-performing asset of the decade despite the long list of critics who have been claiming for years that its value will go to zero. The success of Bitcoin is evident in the thousands of alternative cryptocurrencies that emerged to address different use cases and market demand. Examples include Ethereum (ETH), Tether (USDT), Ripple (XRP), Cardano (ADA), Polkadot (DOT), and Stellar Lumens (XLM).

These innovative applications are the major driving force behind the popularity and rising prices of cryptocurrencies. As of the time of writing, the entire crypto market is worth $1.9 trillion, a monumental growth in just over 13 years. In 2021 alone, several cryptocurrencies recorded massive growth - Ethereum (399.2%), Solana (11,178%), Avalanche (3,335%), Fantom (13,207%), and Terra (12,967.3%) (based on Coinmarketcap data).

Many might see cryptocurrencies as too volatile. However, this high volatility presents attractive trading opportunities, especially through crypto CFDs. Traders from different parts of the world, including Australia, are jumping on the exciting trading opportunities found in the global crypto market.

How to trade cryptocurrencies?

Cryptocurrency trading is the process of buying and selling cryptocurrencies to profit from their price movements. The high volatility of cryptocurrencies makes them suitable for trading.

Traders can trade cryptocurrencies directly on crypto exchanges or through crypto CFDs. 

Crypto CFDs (Contracts For Difference) are financial instruments offered through brokers that allow traders to speculate on the price movements of cryptocurrencies without owning the underlying asset. 

Cryptocurrency CFDs save traders from the hassles and risks involved in securely buying and storing digital assets. Moreover, taking a crypto CFD long position allows traders to speculate on rising prices, while short positions are for speculating on falling prices.

Additionally, crypto CFDs offer the ability to use leverage, which enables traders to magnify the value of trades and potentially generate higher trading profits. For example, traders can deposit $500 and gain access to a trading volume worth $5,000 using 10:1 leverage.

But remember, leverage also magnifies their loss if the market doesn't follow their predictions!

Recommended reading: What is the difference between trading cryptocurrency and cryptocurrency CFDs?

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How to trade cryptocurrencies in Australia in 5 simple steps

For new traders to the crypto market looking to buy and sell digital coins as a regular asset in their portfolio, different trading strategies and analysis will be needed. Read through this section to learn how to start trading crypto in Australia.

  1. Choose a crypto trading platform or crypto exchange - Trading through a crypto exchange allows traders to directly own cryptocurrencies in a crypto wallet. This enables traders to use the cryptocurrencies for other crypto services like staking, yield farming, governance, etc. However, traders could also trade using cryptocurrency CFDs. CFDs allow traders to trade the price movements of cryptocurrencies without taking ownership of the underlying assets. Traders gain access to the use of leverage and the ability to profit from both upward and downward prices. 
  2. Sign up and verify identity - After choosing a trading platform, sign up for a live account by completing the necessary registration processes. After registration, traders will  need to verify their identity using an ID and some other additional documents.
  3. Deposit fiat currency to fund account to start buying and selling cryptocurrency - After traders have been verified, traders can fund their account by depositing Australian dollars (AUD) to trade the cryptocurrencies of their choice.
  4. Do Your Own Research (DYOR) - Before choosing to invest in any cryptocurrency, traders conduct diligent research about the digital asset. Look into its history, founding team, market trends, development roadmap and community activity.
  5. Download MetaTrader 4 and go long or short on the cryptocurrency - Traders usually develop a strategy for trading the different cryptocurrencies of their choice with risk management in mind. Implement it through the MetaTrader4 platform and open your first crypto trade.

How to choose a cryptocurrency trading platform

There are several cryptocurrency trading platforms in the market. Choosing one can be challenging. However, traders ultimate decision will be dependent on the platform that suits their needs.

In this section, we prepared a list of factors to consider that will guide traders in making a decision.

Cryptocurrency support - The market offers thousands of cryptocurrencies and not all of them are supported in crypto trading platforms. Before choosing a crypto trading platform, consider the currencies that it supports and the available pairs to trade them against.

Payment methods - Traders will need to consider the payment options available on a platform before making a choice. Does the platform support a payment method that is convenient for traders? What are the fees associated with using the available payment methods? Do they place deposits and withdrawal limits? Traders will need ensure the platform's payment method works for them.

Fees - Traders will need to calculate the total costs of using a platform, which typically includes deposit fees, trading fees, and withdrawal fees. Traders can compare the costs with other platforms to see if the fees match the quality of service and align with their trading plans.

Platform friendliness and tools - Experienced traders want a trading platform that's well-equipped with advanced features and tools. For less experienced traders, it's important to have a simple platform that's easy to understand.

Security - The security of crypto trading platforms is a highly important metric to consider. Traders may want to research the appropriate security measures put in place in a crypto trading platform. Their research will provide answers to questions like:

  • Does the platform support 2-Factor authentication?
  • What are the account verification requirements?
  • Are trades, emails, and data in general encrypted?
  • Does the platform provide adequate monitoring to detect malicious actors?

Regulations - For crypto trading platforms in Australia, they must register with the Australian Transaction Reports and Analysis Centre (AUSTRAC) to legally operate in the region.

Other important factors to consider include liquidity, trading options, processing times, and customer support.

Litecoin, Ethereum and Bitcoin coins

How to use a cryptocurrency trading platform

Let’s assume that a trader has $500 and intends to trade Bitcoin CFDs. Here’s the process to follow to get started:

  • Register an account with Axi by providing all the necessary information required.
  • Fund trading account with $500 AUD.
  • Choose the cryptocurrency they want to trade. In this case, Bitcoin.
  • Open a position on Bitcoin, track its performance, and close the trade when they are ready to exit.

Traders can start trading Bitcoin CFDs with a relatively small amount of money and apply leverage to increase their position size. For example, a 100:1 leverage on an account with $100 can open a position worth $10,000.

How to deposit fiat to buy cryptocurrency

Axi provides 3 different ways to easily fund an account using fiat currencies. Traders can find the deposit methods below and their list of supported currencies:

  • Credit/Debit Card - AED, AUD, NZD
  • POLi - AUD
  • Bank Transfers - AUD, NZD

What are the different types of cryptocurrency trading platforms?

Crypto brokers are financial institutions that act as intermediaries between individuals and the crypto market. Crypto brokers typically allow users to deposit funds, which give them access to a host of different financial products offered by the broker. The broker charges a commission for providing this service.

Crypto exchange platforms are platforms that crypto brokers integrate with to enable users to access a more advanced trading platform with different features including spot trading, staking, swaps, and margin trading in some cases.

Crypto CFD trading platforms are platforms that allow people to trade on the price movements of cryptocurrencies using CFDs.

Start trading cryptocurrencies with Axi

At Axi, we offer our clients a better trading avenue for buying and selling crypto assets. Here’s why:

  • Trading crypto CFDs with Axi enables anyone to go long or short on any cryptocurrency of their choice
  • Traders can deposit a small initial capital and have access to larger position sizes
  • Crypto CFDs are tax-efficient in some countries
  • CFDs allow users to hedge their physical portfolio
  • Axi offers support for a variety of trading strategies and integrations to trading platforms

Sign up for a live account or demo trading account today!

Buying crypto in Australia

FAQ


Is trading crypto in Australia legal?

Trading cryptocurrencies in Australia is legal as long as traders are using a platform registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC).


Is trading crypto in Australia safe?

Traders can safely purchase cryptocurrencies in Australia as long as traders are utilising a secure and registered platform. Traders who do their own diligent research and understand the general crypto market before making any investment decisions will have a smooth trading experience.


Why do some crypto trading platforms ask traders to verify identity?

There are regulations governing the use of cryptocurrencies in different regions. Some platforms may not require traders to verify their identity depending on the laws governing the usage of cryptocurrencies in the region. Some governments require trading platforms to compulsorily require verification from users.


How do crypto trading platforms decide what cryptocurrencies they can list?

Cryptocurrency trading platforms make this decision by putting a lot of factors into consideration. The platforms consider the cryptocurrency's user base/community, daily transaction volume, development team, type of cryptocurrency, and the economic models applied in the cryptocurrency. Regulations also play a significant role.


Do I need a cryptocurrency wallet to trade cryptocurrencies?

Depending on the method of trading traders are using, they may or may not need a crypto wallet. If traders are trading cryptocurrencies through crypto CFDs, then traders don't need a wallet as traders aren't taking ownership of the cryptocurrencies.

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We hope that our guide on how to trade crypto in Australia helps traders understand the potential investing and trading opportunities. Keep up to date on evolving blockchain trends here!



Alex Lielacher

Cryptocurrency Content Contributor

Alex Lielacher is a ‘banker-turned-bitcoiner’ who exchanged the bond trading desk for a laptop in a co-working space to provide engaging and educational content for leading companies in the blockchain technology space.

 

 

The information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.

Cryptocurrencies (such as Bitcoin) are extremely volatile and can move or jump in price with no apparent reason due to lack of liquidity and ad hoc news. There is little or no fundamental reasoning behind its pricing and as such trading CFDs in cryptocurrencies poses a significant risk to clients. For any Cryptocurrency CFDs that we limit to Monday – Friday trading, it is important to note that the underlying market will continue to trade over the weekend, meaning there could be a significant price change between Close of Business on Friday and open for business on Monday. Therefore, these symbols should be traded by clients with sufficient experience to  understand that, subject to negative balance protection (where available), they risk losing all their investment, or more, in a  short period of  time, and only a very  small part of their portfolio should be allocated.


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