There are many methods of buying Bitcoin with regular cash/fiat, specifically in this case with your Aussie Dollars. As Bitcoin is a relatively new asset class, it’s not exactly as easy as going to a foreign currency exchange booth on the streets. Various methods of purchasing Bitcoins each presents with its own pros and cons.
The main point to keep in mind is the trade-off in fees and ease of purchase. For example, some ways of buying Bitcoin can be instant, but that convenience comes with higher fees (and sometimes not that transparent!). In contrast, slower methods of bidding in an exchange-type setting require more effort and patience, but have substantially lower fees involved. I outline these below with the hope of helping you find one that fits your needs.
Disclosure: Some links below are referral-based links of services I’ve personally used before and know to be reputable. These will be stated explicitly as “Referral link”. I do this to cover my time and effort in making sure the information here is relevant and useful to those needing it. Importantly, you do not personally pay for the (very tiny) commissions I receive but the providers of these services do as a way of marketing them. If you don’t want to use the referral links, feel free to Google them for direct links (but make sure the sites are real and safe!). No hard feelings on my end.
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Buy/sell exchanges in Australia
For those experienced with buying shares in the ASX, this method would be most familiar to you. Exchanges require you input a Buy/Bid price, which then a seller may choose to sell you at that given price. Alternatively, you may choose to buy at an existing price that a seller has already posted (Sell/Ask).
Pros: Fees are usually lower compared to instant purchase methods.
Cons: Purchase price you place may not be filled if no willing sellers are available. To start buying, you’ll also need to fund your account via EFT or BPAY, meaning there’s usually a wait of 1-2 business days for funds to clear. These exchanges are now implementing POLI or PayID/Osko transfers giving you instant ability to fund your account from bank transfers, but are usually limited to a smaller amount.
Independent Reserve (referral link):
- Fees: 0.5% but reduces with higher volumes purchased. I personally use Independent Reserves for my AUD-BTC conversions. Reputable exchange and a long-time service provider in Australia. Interface is simple and straightforward with features commonly used in standard exchanges (limit buys, market buys, stop losses, etc). PayID/Osko instant account funding available.
- Fees: 0.85% but reduces with higher volumes purchased. Similar to Independent Reserve and one of the more reputable exchanges around. Fees are comparably higher however. PayID/Osko instant account funding available.
CoinJar Exchange (referral link):
- Fees: o.5%. You can also potentially buy BTC without fees/0%. This can be done only if you buy with a price that does not exist in the order book at the time order and a seller then meets your price (i.e. maker fee). To get a better understanding of this, read the FAQ/Common questions on their website, “What are taker, maker and auction trades?”. Also note that CoinJar exchange is not to be confused with the instant buys through CoinJar. PayID/Osko instant account funding available.
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Instant purchases
Pros: Quick and instant; no need to wait for a seller to meet your price, such as the exchange method above.
Cons: Substantially higher fees.
Coinspot (referral link):
- Fees: 1%. You will need to fund your account first in order to instantly purchase BTC without the exchange-style methods above. Downside is that prices will be slightly higher than market prices, plus fees on top. PayID/Osko instant account funding available.
CoinJar (referral link):
- Fee: 1%. Unlike the CoinJar exchange method described above, there is also an option to purchase BTC instantly with your AUD funded CoinJar account. This however comes at a 1% fee, and is executed at a price that is slightly higher than market prices. PayID/Osko instant account funding available.
- Fees: 2.5%. You can set up a purchase order through this site and pay for BTC using cash deposited at newsagents. Once funds have cleared, your BTC will be deposited into your designated wallet address. This is advisable to knowledgeable buyers with their own personal BTC wallet already set up.
Coinbase (referral link):
- Fees: 3.99%. You can purchase BTC with your debit card or credit card, although the latter is highly discouraged. Don’t invest what you can’t afford to lose, especially with credit.
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Peer-to-peer purchases
Pros: Escrow service, meaning that these services act as a middleman to facilitate secure exchange of AUD for BTC. Alternatively, cash can be used by direct buying from sellers, potentially meeting in person for people preferring such a method. P2P buying is usually advisable only to knowledgeable buyers with their own personal BTC wallet already set up.
Cons: Higher risk of scam sellers, disputes may happen resulting in your dollars being locked up by the escrow service provider until it is resolved. Slow process overall.
Localbitcoins (referral link):
- Fees: 1% but only if you use this service to create buy advertisements. If you respond to existing seller ads, there are no fees.
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Conclusion
If you’re in a hurry to accumulate BTC, use the instant buy methods. But understand that fees will be substantial, especially if you’re buying a large amount. I’d also advice against hurried BTC purchase (google: BTC FOMO). Let’s be honest here, if you’re in a rush, it’s likely because you’re being spurred by your nagging greed and FOMO from rapid price movements you’ve recently heard about.
Instead, go slow and take your time to understand this space. If you’re not in a hurry, then use the exchange methods and dollar cost average your way into BTC that you can be comfortable with holding long term.
Another thing to note is that these mainstream methods of BTC purchase will require Know-Your-Customer (KYC) steps, meaning you will have to provide identification and wait for approval before your account gets activated.
All the best in your AUD to BTC conversion journey and HODL!
How to buy bitcoin in Australia (safely)? 