Buying Bitcoin in Australia can be confusing…
Especially if it’s your first time doing it.
With all of the different options out there, how could you possibly know the best option?
But don’t worry, because we’ve got you covered.
This post will compare and contrast all of the exchanges that sell Bitcoin in Australia, allowing you to make the best choice.
Coinbase is probably the most used exchange out there, and for good reason. They serve an enormous amount of countries, including Australia. In addition to selling Bitcoin, Coinbase also sells Ethereum, Litecoin, Bitcoin Cash, and Ethereum Classic.
One of the most important factors in choosing a good exchange to buy Bitcoin on is the fees the exchange charges.
Coinbase charges 1.49% fees when a bank account is used, and 3.99% when a credit or debit card is used.
To get the most bang for your buck, it is recommended to use a bank transfer.
Coinbase offers online wallets for users who want to store their cryptocurrency on an exchange. This is not recommended but can be done if you are lazy storing cryptocurrency. To learn more about Bitcoin wallets, check out our guide.
Coinmama is a lesser-known exchange but is a fantastic choice for those looking to purchase Bitcoin with a credit or debit card.
Coinmama specializes in credit and debit card transactions, meaning you can not use a bank account on the brokerage.
Unlike Coinbase, Coinmama does not have user wallets for storing purchased cryptocurrency. You must have a wallet address you control to send your currency to.
This can be another exchanges wallet or your own, but without an address, they can not send you any funds. Learn more about Bitcoin and cryptocurrency wallets in our wallet guide.
Coinmama charges 5.5% fees on credit and debit card transactions making them slightly pricier than other options.
CoinJar is one of the most popular Bitcoin exchanges in Australia. They are a brokerage, meaning that you purchase Bitcoin from them and not another user.
For fees, CoinJar charges 1% on all transactions. This is pretty low making them competitive with other purchase options.
The most popular deposit method on Coinjar is BPAY.
Like Coinbase, CoinJar also has a wallet for users to store cryptocurrency on the exchange. As we said above, this is not recommended.
Coinjar also features a mobile app for users to purchase Bitcoin on the go.
LocalBitcoins is an escrow service available in all countries. The site allows for person to person transactions with varying payment methods while acting as an escrow service.
Cash is by far the most popular method used on LocalBitcoins.
It is important to be wary of scams when meeting a seller.
For fees, LocalBitcoins themselves charge 1% fees, and sellers are able to put any premium on Bitcoin’s price that they’d like.
CEX.io is similar to Coinmama in that it serves almost every country, and allows users to purchase Bitcoin, Ethereum and other currencies via credit and debit cards.
The site has around a 1% deposit fee when a card is used, and also has very high premiums on the price of cryptocurrencies.
The premium seems to vary, and can sometimes be around 6%. The website has a wallet where users can store cryptocurrency although this is not recommended.
Out of the above mention exchanges, Coinbase and CoinJar are the only two with mobile apps. Both are extremely popular, but Coinbase is much larger.
Coinbase is used in more countries and has a great reputation in the cryptocurrency community.
The service mentioned is TravelByBit and is a way to book activities such as flights, cruises, tours and more using cryptocurrency.
While it is somewhat popular, the expensive electricity in Australia makes it difficult to mine Bitcoin for a profit.
Other countries such as China or Canada are better suited for mining as it much cheaper to mine.
LocalBitcoins is probably your best method for this due to them allowing person to person transactions. The website requires some personal information but requires much less than other options.
Coinbase allows users with a linked credit or debit card to purchase Bitcoin instantly. This is great for buying the dip on Bitcoin as you do not need to wait for your transaction to go through like on other exchanges.
Even if a bank account is used, the buy-in (or sell) price is locked while funds move between bank accounts.
Of the mentioned exchanges, Coinbase and CoinJar have the lowest fees on purchases. Fees are one of the most important factors when choosing an exchange, so both are great options.
It is strongly advised against to use any exchange wallets as they are very vulnerable to exchange hacks. Due to the way cryptocurrency is stored (private key cryptography) you do not truly own your funds when they are on an exchange.
Coinbase insures their customer’s funds through Lloyds of London, but even then it is better to be in charge of your funds by storing them in a secure wallet.
Due to complaints from certain credit card companies, Coinbase had to remove credit cards as a purchase method. Debit cards are still a great option.
Australia is gradually becoming a Bitcoin hub, creating and enabling an environment for cryptocurrency. The Australian economy as regard Bitcoin has gone through several phases before getting to what it is today.
These stages can be described as that which is steady and progressive as the country is now gradually becoming a Bitcoin Hub, an attempt would be made to consider how the country has grown through several phases.
In August 2015, the Australian Parliament’s Senate Economic References Committee published a publication titled “Digital Currency; Game Changer or Bit Player.”
After the committee had successfully inquired into how to develop a suitable regulatory system for digital currency, the potential impact of blockchain on the Australian economy, and how Australia can take advantage of the cryptocurrency sector.
This report was not met with deaf ears as the government, after a year (May 2016), responded by the recommendations, the government went ahead to restructure the taxation treatment of crypto startups which was done by reviewing the actions of the Australian Taxation Office (ATO).
In the light of this, the Australian Taxation Office published a guidance paper on the tax regulation of cryptocurrencies.
The regulatory guidance was keen on transaction made through virtual currencies, describing it as “akin to a barter arrangement, with similar tax consequences.”
The viable explanation being that ATO regards virtual currency as “neither money nor cryptocurrencies” but may be regarded as assets for capital gains tax purpose. The guidance document states;
“Where you use bitcoin to purchase goods or services for personal use or consumption, any capital gain or loss from disposal of the bitcoin will be disregarded (as a personal use asset) provided the cost of the bitcoin is $10,000 or less.”
Another policy that immensely contributed to the enabling environment is the fact that Australian financial watchdog is doing its best to scrutinize misleading or deceptive ICOs (Initial Coin Offering) and retail investors with interest in crypto-asset funds.
The regulators made several attempts to debunk the misconception that Australia is placing a ban on ICOs due to the uncertainty in regulation surrounding the practice coupled with the fact they are more or less unregulated. The Watchdog’s Commissioner John Price stated that:
“If you raise money from the public, you have important legal obligations. It is the legal substance of your offer (not what it is called) that matters.
You should not simply assume that using an ICO structure allows you to ignore key protections there for the investing public and you should always ensure disclosure about your offer is complete and accurate.”