5 min read, updated Nov-20
Interested in Bitcoin trading Australia, but don’t know where to start? Our quick guide will help you understand all the options available to you.
- A Bitcoin trading account from one of the below brokers is very secure & free to set-up (~5 mins) with no obligations
- Trading Bitcoin allows you to take advantage of the price movements in either direction
- Bitcoin trading Australia accounts are protected against negative balances if the price drops
Trading Bitcoin, rather than simply buying through an exchange, enables you to not only buy Bitcoin, but sell it as well. You don’t actually own any of the cryptocurrency, you’re just trading on the price going up or down. Being able to trade on the price movements in either direction opens up a world of possibilities. Just this year, Bitcoin has dropped overall nearly 36% and risen over 50%, however everyday the price rises and falls more than any other traded market.
Owning Bitcoin is the dream, however the days of becoming an overnight millionaire are long gone due to the market price of Bitcoin today. Unless you have hundreds of thousands of dollars to invest, us regular folk will find it tricky to invest enough to really make any difference. This is where a trading broker rather than an exchange comes in. Fees to trade are comparable to an exchange however the fact that you can trade the price in either direction is the key benefit. Large price swings mean the traders can create large profits daily.
Below we’ve listed all of the major Australian Securities And Investment Commission (ASIC) regulated brokers, so you can get started with a platform you can trust.
Best Bitcoin Trading Australia Platforms in 2020!
The Bitcoin trading Australia platforms we list are not only the most secure for transacting on, but also highly regulated and trusted in the industry, giving you the peace of mind that your money is secure.
Buying Bitcoin vs Bitcoin trading
Ok, so whats the difference between actually owning Bitcoin vs trading Bitcoin. Well, quite a bit, and trading Bitcoin is not only a lot simpler than buying it outright, it’s also more lucrative. As Bitcoin prices have risen and fallen a lot over in the past year, many everyday traders have taken advantage of the market volatility without having to actually own any Bitcoin.
When you buy actual Bitcoin, there is the hassle of having to open and manage a digital wallet (which is separate), as well as the fact that you can only profit if the price of Bitcoin rises in the future. So what if it goes down, well if it does, then you will lose money and it goes up and down, a lot.
When you trade Bitcoin however, you can profit from both the rising and falling Bitcoin prices without having to actually own any Bitcoin. By speculating on the price movements, you can profit from shorter term price volatility, rather than holding onto Bitcoin for the longer term.
Bitcoin Trading Australia Platform
The above brokers are essentially the best Bitcoin trading platform for Australian residents. they have ground based offices and are ASIC regulated. ASIC is the main financial regulator in Australia and is very important so you can protect your money when trading. The Bitcoin trading platform performance and ease of use is key to making your trading successful. All of these Bitcoin Trading platforms all have state-of-the-art interfaces which you can monitor your trades in real-time on your desktop or mobile device via their intuitive apps.
Is Bitcoin trading right for you?
Both buying Bitcoin and Bitcoin trading have advantages and disadvantages just like any other form of financial speculation. Deciding which option is best for you will depend on your financial goals and strategy.
- The largest and most exciting Cryptocurrency – Bitcoin, is taking the trading world by storm, with high volatility, prices rise and drop daily creating many opportunities to capitalise on this movement.
- The high demand for Cryptocurrency started in 2013 with the rising price of Bitcoin triggering a global frenzy, which in turn drove the price up and created solid returns for traders & investors.
Explore some of the pros & cons of both buying Bitcoin and Bitcoin trading below:
Bitcoin Trading Australia:
- You can go long (buy) and short (sell) to profit from rising and falling prices
- You won’t need to set-up a virtual wallet
- Your account is protected against negative balances
- You are trading on leverage, giving you larger exposure to the market with less upfront capital
Buying Bitcoin Australia:
- You’ll buy Bitcoin at full market value
- You will pay tax on profits
- You will need a digital wallet (which is separate, essentially meaning your signing up to two different platforms)
- Some exchanges charge high fees for using your digital wallet
- Opening a digital wallet can be complicated and can have security issues
How to trade Bitcoin
Bitcoin trading Australia is performed via a CFD. Don’t worry, this isn’t complicated. CFD means Contract For Difference, which is the product you use to trade Bitcoin on one of the preferred platforms above. It’s a way to make profit from the price movement but without having to own the cryptocurrency. You’re basically trading the price difference from where you opened the contract with the broker. You can trade on the price going up and down using a CFD and close the contract/ trade anytime. That’s correct, you can trade on the price going down, not only up, which happens frequently on all the cryptocurrencies. Crypto prices are fairly volatile vs normal stocks and currencies, making the price swing, even in a single trading day.
Going ‘long’ or buying, means trading in the hope that the price goes up. You will then profit from any increase from the price you executed the trade at.
Going ‘short’ or selling, means trading in the opposite direction. If the price goes down, you will profit from any decrease from the price you executed the trade at.
Another key point is that, because Bitcoin has become so expensive, when you buy the Cryptocurrency using a digital wallet, it can tie up a great deal of your capital. When you trade Bitcoin as a CFD however, you’re trading on leverage and can gain a similar exposure to the market for a might smaller upfront contribution.
Is Bitcoin Trading Australia a good idea?
Deciding whether or not to trade Bitcoin online depends on what your financial goals are. Some of the reasons that Australian investors trade Bitcoin include:
- High volatility – because Bitcoins are much newer markets they can be more volatile with bigger price swings. This presents opportunities for traders to profit from price volatility.
- Flexibility in how you trade – with traditional investments options you’d look to invest and hold your shares as prices rise. By trading Cryptocurrencies through a CFD broker you can go long or short and profit whether the price rises or falls.
- Trade at a time that suits you – Bitcoin trading Australia markets are open 24/7 so you’ll never miss a trading opportunity.
- Trading on leverage – by trading CFDs on leverage you can gain a larger exposure to the market than you might otherwise be able to by buying Crypto direct.
Why Trade Bitcoin instead of buying?
- There are numerous benefits to trading on Bitcoin price movements rather than investing directly in the Cryptocurrency.
- With Bitcoins harder and harder to buy, they have become increasingly expensive and out of reach of many average traders.
- When you trade Bitcoin, you speculate on which way you think the price will move and are able to profit from fluctuations in price volatility.
- Because you trade on leverage, the initial sum you start trading with can be relatively small. This is much cheaper than buying Bitcoin directly.
- You also won’t have to open a complicated digital wallet and will benefit from the experience and analysis provided by quality CFD brokers.
- Markets are also available 24/7 and the best brokers offer cutting-edge mobile apps to help you trade on the go so you never miss an opportunity. When you trade CFDs online with a trusted broker you’ll also have the peace of mind of trading with a firm that is Australian Securities And Investment Commission (ASIC) regulated, guaranteeing you the highest possible standards.
- For help choosing a quality Cryptocurrency broker, check out the comparison table above and find a broker that suits you.
Bitcoin Trading Australia fees
All trading involves fees and are mostly made up of transaction fees and overnight financing. These trading fees cover the use of the platform and are known as the spread. These vary from market to market and trading platform provider. Overnight financing is a fee to keep the trade open when the markets are closed. These fees are similar to an exchange, where they charge you each time you transact in your digital wallet.
Bitcoin Trading Australia strategy
Below are the most common ways to trade. I’ve ordered them from easy to hard in terms of knowledge and time investment. I would make sure you pick the strategy that resonates with you and how involved you want to be. As with all strategies it’s all about reading the market sentiment and acting before the next swing. The easiest will make you least profit vs the hardest, which is logical.
HODL – Hold On for Dear Life or simply a Hodler is a trader who buys a stock and holds on to it hoping or the price to go up in the long term. This is probably the easiest way to trade, but the least engaged as you look upon it as a long term investment. – easiest, least time required
Trend Trading – this is where you take a trading position that mathes the current market trend. I the market is trending up (bullish) over time then you would go long (buy), however if the market was trending down (bearish) then you would go short. When the trend starts to look to change you would look to close your position, bank the profit and reopen reflecting the current trend (bull or bear). – medium, bit more time
Day trading – means just that, trading the rise and fall of the price over a single trading day. This is the most intensive type of trading as you take advantage of the short term price movements. You will avoid overnight fees as you won’t be holding any positions as the markets close. – getting hard, needs a lot of time
Hedging – this is where you take a longer term trade position and mitigate any exposure by open a trade in the opposing position to the one you already have open. This means you can cover potential losses in the shorter term as the market goes against your longer term trading. – hardest, a lot of time
Another part of a Bitcoin trading strategy should involve analysing the market to identify trends. All the trading platforms we list have very powerful charting coupled with news feed. Candlestick charts represent a very powerful technical analysis tool that can help you trend the market direction.
Bitcoin Trading Risk Management
Every Bitcoin trading strategy should include some form of risk management, such as a Stop Loss order. All the Bitcoin trading Australia platforms we have listed include this functionality. This lets you set a price at which you’re happy to close the trade to minimise any losses if the market moves against you. You should also look to place a Take Profit order to make sure you maximise your profits of any trade. These two features are essential to making sure you’re successful at trading and protecting your equity. To many times we have seen new trader lose their capital quickly because they haven’t implemented these two features.
- Bitcoin is a digital or “Crypto” currency which was first launched in 2009 by “Satoshi Nakamoto”.
- Based on Blockchain technology and is a completely independent peer-to-peer payment system, free from government regulation and control.
- In its early stages, each Bitcoin was worth little more than 10c. Today that total is nearer $8,000 per coin.
- The world’s most popular Cryptocurrency, Bitcoin has ridden a wave of popular sentiment to cement its place as one of the world’s most exciting assets.
So what is Blockchain exactly?
- At its core, Bitcoin uses Blockchain technology to store, verify and transfer value.
- The Blockchain is essentially a digital ledger, operated by a secure independent network or community or users. It is open to anyone on the web and which serves to record all digital Bitcoin transactions.
- The Blockchain isn’t stored in a single location but is accessible across millions of computers around the world. This makes it extremely secure, incorruptible and trustworthy. Every single Bitcoin transaction since the very first has been stored and recorded in the Blockchain for complete transparency.
- Blockchain records cannot be altered retrospectively. Each transaction must be authenticated by the majority of the Bitcoin community (sometimes called “miners”).
What influences Crypto price movements?
- Because Cryptocurrencies like Bitcoin, Ethereum, Ripple & Litecoin are not controlled by central authorities in the same way that traditional currencies are, their price is impacted by different factors.
- A currency like the United States Dollar (USD) will be affected by many things. These can include interest rate decisions, trade & domestic policy changes & Wall Street performance.
- Cryptocurrencies, however are much newer assets and as such less is known about how they react to market volatility. Whether there are key correlations to look out for and where breakout and support levels should be set.
- As a general rule of thumb one of the biggest challenges facing Cryptos is the threat of greater regulation.
- As Cryptocurrencies have become more mainstream, their value has soared, mainstream financial institutions have become nervous of their impact on global markets.
- Nobody knows yet whether governments may in the future move to regulate or ban some Cryptos. As a result, they do tend to be sensitive to news about potential regulation.
- Another major driver of price swings in Cryptos is the potential for “forking”. Forking is when a Cryptocurrency splits in two, creating two new, unique currencies, a good example of this is Bitcoin and Bitcoin Cash.
- A forking generally happens when the Crypto’s community fails to agree on the path forward for the digital currency. A hard fork in any Crypto is generally negative for price movement.
- When you trade Cryptos, it is important that you take time to research the merits of each one. This way you can understand how and why their prices move the way they do.
- By analysing past performances and how Cryptos react to events you may be able to establish trends. This will help inform your Bitcoin trading decisions.