~ 4 min read, updated Sep-18
Interested in Bitcoin trading, but don’t know where to start? Our quick guide will help you understand all the options available to you.
- A Bitcoin trading account 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
- Trading accounts are protected against negative balances
Trading Bitcoin, rather than simply buying through an exchange, enables you to not only buy Bitcoin, but sell. You don’t 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%, however everyday the price rises and falls more than any other traded market.
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 2018!
Secure, regulated & trusted
The Bitcoin trading 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 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 buy Bitcoin on an exchange, so you’ll 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 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.
Going ‘long’ or buying, means trading in the hope that the price goes up, you will 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 and your familiarity with the markets you want to trade. 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 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, instead of buying 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 and 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.
- We’ve tested and reviewed all of Australia’s best brokers so that you don’t have to and have lined up exciting offers for you to take advantage of. Check out our list of approved, verified Cryptocurrency brokers now to get started.
Bitcoin trading Australia fees
All trading involves fees and are mostly made up of transaction fees and overnight financing. These trading/ transaction costs cover the platforms service costs are known as the spread and these vary from market to market and trading platforms. 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 buy or sell your crypto in your digital wallet.
Bitcoin trading Australia strategy
Every Bitcoin trading strategy should include some form of risk management, such as a stop-loss. All the Bitcoin trading platforms we have listed include this functionality, so you can set a price at which you’re happy to close the trade to minimise any losses.
A simple Bitcoin trading strategy should involve analysing the market to identify trends. All the trading platforms we list have very powerful, free to use charting coupled with news feed giving you the latest market news. Candlestick charts represent a very powerful technical analysis tool that can help you trend the market and hopefully predict a pattern.
- Bitcoin is a digital or “Crypto” currency which was first launched in 2009 by an anonymous internet user, or group, known only as “Satoshi Nakamoto”.
- Bitcoin is based on Blockchain technology and is a completely independent peer-to-peer payment system, free from government regulation and control.
- In its early stages just after it’s launch, each Bitcoin was worth little more than 10c while 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, that 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, making it secure, incorruptible and trustworthy. Every single Bitcoin transaction since the very first has been stored and recorded in the Blockchain for complete transparency.
- Record cannot be altered retrospectively and 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 things like interest rate decisions, trade policy, domestic policy changes, the performance of Wall Street and financial data from major institutions.
- 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, and as their value has soared, many 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 so they do tend to be sensitive to news about potential regulation, attacks in the media on the legitimacy of Cryptos in general and reporting of any major hacking efforts on digital wallet operators.
- 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.
- This generally happens when the Crypto’s community fails to agree on the path forward for the digital currency. As this causes a loss of confidence and drives up confusion, 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 and really 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 which can help inform your Bitcoin trading decisions.
- Start your Bitcoin trading journey today!