This page is about the easiest way to purchase and trade cryptocurrency. A list of competitive cryptocurrency products which payout yield (interest) is on the Savings Accounts page.
Purchasing cryptocurrency seems out of reach for a lot of people because they simply don’t know how to do it or where to start. In this page I try to break it down and put some recommendations on the best ways to purchase cryptocurrency in Australia. To make this as simple as possible, I will only explain the most important technical sides of cryptocurrency.
A key thing to keep in mind is that cryptocurrency is still a relatively new field and regulation has not been able to keep up. There is plenty of money flowing in and out and cryptocurrencies in general are extremely volatile. Cryptocurrency companies typically offer extremely attractive interest rates on funds (around 10% interest p.a.) on fiat tied tokens (e.g. AUD or USD equivalents) which is an order of magnitude greater than traditional financial institutions who have to worry about distributing profits to CEOs and shareholders instead of back to customers. However, due diligence should be exercised before entering any investment product, especially so for a field with a lack of up-to-date regulation.
Technical and Fees
Cryptocurrencies are built on blockchain technology. It works by forming a chain of blocks of data where records of transactions are recorded. The size of the blocks and speed of block creation is dictated by the protocol of the blockchain (e.g. bitcoin blocks are limited to 1MB and are generated roughly every 10 minutes) and when a new block is formed, it is added to the end of the chain. This means that when transferring your assets from one place to another, it is not instant (but also not 3 – 5 business days) but rather takes time depending on how long it takes to create the new block.
Another thing to keep in mind when dealing with cryptocurrency is that all transfers on the blockchain are subject to transaction fees. These fees are an integral part of the blockchain functionality as they are paid to the independent nodes (sometimes called miners) to validate (sometime called mining) and secure the blockchain. This means that it will cost you money to move your cryptocurrency assets from one place to another and if your assets are held through centralised services, they can set their own withdrawal fees. Depending on where and what you are transferring, it may be possible to reduce the fee by converting your asset to one with lower transaction fees (e.g. Bitcoin [BTC] to Cardano [ADA]), sending it and then converting it back to the original asset once it has arrived.
Financial Services Accounts
Companies which provide simple cryptocurrency financial services are the easiest to use and get started with. They generally provide a simple view of your holdings and allow you to make “market” orders (purchase the asset e.g. bitcoin [BTC] at the current rate) but will usually charge a fee. Some companies will also claim to be “no-fee” but they may charge a markup on the price as part of the “spread”. Spread usually increases as you make larger purchases as you are essentially making a large market order.
If you want to get involved with crypto and maybe just want to hold it for the long term without too much complexity then I would recommend one of the following account.
People should also be aware that most cryptocurrency accounts will have a withdrawal fee (this is to cover the cost of maintaining the network however some companies will skim some off the top as well) for all on-chain withdrawals such as transferring bitcoin from one address to another. Doing so within a centralised platform (off-chain) doesn’t incur this fee.
Crypto.com
Crypto.com is one of the pioneers of the cryptocurrency space and are releasing extremely competitive products in almost all sectors of the industry. They have by far the largest crypto card program in the world and their app is very easy to use. Their savings products also offer very competitive yields with AUD equivalents gaining 8% – 14% interest (yes literally an order of magnitude more than banks however this is fairly typical in the cryptocurrency industry).
The onramp and offramp methods are extremely easy to use as it supports PayID which allows instant transfers from most banks. PayID AUD withdrawals do however require manual verification so can take a few hours.
There are no fees for purchasing cryptocurrency however there is a spread on the price. As far as market orders go however, the prices you get from Crypto.com are still extremely competitive. They also have an exchange so you can transfer your tokens with 0 fee and make your purchase on the exchange at the price you set.
You can also schedule regular purchases with low minimum purchase amounts (on some currencies) to help with dollar cost averaging your investments.
Coinspot
Coinspot is an Australian company and offers a fairly competitive product. Their app is easy to use and they charge relatively low fees.
They support PayID AUD deposits and withdrawals for fast transfers and there is also an exchange where you can set the purchase/sell prices however this only supports AUD trades and not trades between different cryptocurrencies.
Coinspot also has a set of cryptocurrencies bundles which aggregate various different cryptocurrencies into one package which can be traded, similar to ETFs on stock exchanges.
Coinbase
Coinbase is one of the older companies in the industry and were the first major cryptocurrency company to be listed on the NASDAQ.
Their fees are higher and in general their product seems less competitive compared to Crypto.com but they are still an easy to use option. They also have an exchange (Coinbase Pro) which allows you to make your purchases at the price you set.
You can purchase cryptocurrency with a Visa or Mastercard debit card however there is no way to sell it back to AUD to withdraw.
Binance
Binance has the largest exchange in the world with many complicated products but they also offer a decent “simple” version of the account (Binance Lite) which is much more beginner friendly.
You can purchase with a card and they also support PayID for fast deposits and withdrawals. These ones don’t seem to require manual verification so they are instant.
Exchanges
While the above products are great for beginners, they usually have fees or market spread which make them costlier to use. This section will list some exchanges which have more advance features and lower fees. These exchanges are also much better suited for active trading.
There are countless different exchanges out there but very few are listed here as they have something that sets them apart from the others (the main points being low fees and easy fiat on/off-ramping).
The maker fees section shows the default fees for executing a market making limit order on the exchange.
| Exchange | Maker Fees | Notes |
|---|---|---|
| Binance | 0.1% | – 1200+ exchange pairs (including many AUD <-> cryptocurrency pairs) – Large array of products such staking and margin trading – PayID deposits and withdrawals |
| Swyftx | 0.6% | – Australian – PayID deposits and BSB withdrawals ($2 fee applies for deposits less than $200) – Only has AUD <-> cryptocurrency pairs |
There are many more exchanges available that are not included in this section because I do not think they have any other feature that makes them stand out of the pack however they may include tokens which aren’t accessible from the ones listed above.