How to Buy Bitcoin in Australia: A 5-Step Guide For Beginners

Admitting you’re crypto-curious is a big step. The next is learning how to buy Bitcoin in Australia. From online exchanges to Bitcoin ATMs, digital wallets and risk management - there’s a lot to consider. If you’re new to crypto, your first purchase should be an exciting rite of passage, not an anxiety trigger. So we’ve put together a simple 5-step guide to demystify the process. Here’s everything you need to know about how to buy Bitcoin easily and with confidence.

Step 1: Decide How Much Bitcoin to Buy

Step away from the buy button! Before you get started, you need to have a tight risk management plan. This will determine how much Bitcoin you should buy. Assess your financial situation and consider the following:

Disposable Income: Invest only what you can afford to lose. Bitcoin, like any investment, carries risk. Always make sure your living expenses and other financial obligations are covered first. This is non-negotiable.

Debt Status: If you have high-interest debt, you should prioritize paying that down before investing in volatile assets like Bitcoin. 

Short-Term vs. Long-Term Investing: If you're looking at a short-term investment, you might approach the amount you buy differently than if you're planning to hold Bitcoin for several years.
Diversification: Consider how Bitcoin fits into your broader investment portfolio. Diversification can mitigate risk, so you don’t want to invest all your eggs in one basket.

Risk Tolerance: Your appetite for risk should inform how much Bitcoin you buy. Identify your risk tolerance by asking yourself these questions:

• How would I react to a significant drop in Bitcoin's value?
• How long can I wait for the price to recover? 
• What if the price never recovers and I lose my investment?

Step 2: Choose an Online Exchange, Bitcoin ATM, or Peer-to-Peer Platform

Next, decide whether to use an online exchange or a Bitcoin ATM. Both methods have pros and cons to consider. A third option is a peer-to-peer (P2P) platform, but it comes with additional risks that aren’t typically appropriate for Bitcoin virgins. The best choice depends on your specific needs and comfort level. 

Online Crypto Exchanges

Online crypto exchanges have lower fees, more coins to choose from, and are accessible from anywhere as long as you have a computer or smart device with an internet connection. Once you’ve made an account, you can buy Bitcoin with AUD and other fiat currencies like CAD, USD, GBP, etc., or by swapping between crypto pairs.

Most platforms are custodial. That means your assets are stored and controlled by the exchange. However, many of them allow you to move your crypto off the platform to your own private wallet. Popular crypto exchanges in Australia include Binance, Coinbase, and Kraken - to name a few. 

How to Buy Bitcoin at an Exchange:

1. Open an account 
2. Verify your identity 
3. Deposit AUD 
4. Select Buy/Purchase and follow the prompts

Bitcoin ATMs

Bitcoin ATMs are beginner-friendly, accept cash payments, and are ideal if you want total control of your assets. This method is non-custodial, which means you are responsible for storing your crypto. Therefore, you need to have a Bitcoin wallet setup before you can use a Bitcoin ATM in Australia. 

The coin selection is typically limited to Bitcoin and sometimes a handful of the most popular coins. Accessibility is limited to physical terminals near you - just like a regular ATM. But that’s a good thing for beginners. Online exchanges don’t exactly have a stellar track record, and it’s hard to trust an unfamiliar website with your money and personal information. 

Bitcoin ATMs offer reassurance with a legitimate, physical terminal. The transaction process is stress-free because it’s familiar. If you’ve ever used a traditional ATM, you’ll have no problem using a Bitcoin ATM. 

Localcoin is an AUSTRAC-registered company with Bitcoin ATMs across the country. 

How to Buy Bitcoin at Bitcoin ATM:

1. Visit the nearest Localcoin ATM
2. Signup
3. Start the transaction
4. Scan your wallet
5. Insert cash & get your Bitcoin

Peer-to-Peer Platforms 

Peer-to-peer platforms are online marketplaces that connect buyers and sellers directly, eliminating the need for a middleman to facilitate the transaction. This method works without holding any funds during the trade, and some platforms allow you to trade for other commodities like gift cards. 

These platforms are also non-custodial, so you need to have a Bitcoin wallet. A major downside is that peer-to-peer transactions are high-risk because they’re especially prone to scams and fraudulent behaviour. Security, safety, and privacy can vary dramatically from one platform to the next, and even from one transaction to the next. For this reason, we typically advise against peer-to-peer platforms for beginners. 

Step 3: Get a Digital Wallet

Regardless of where you buy Bitcoin, it’s always a good idea to have a private digital wallet. Self-custody is ideal if you want total control of your assets. Just make sure it’s compatible with your desired cryptocurrency. For Bitcoin, we recommend the following wallets: 

• Trust Wallet
• Exodus
• Blockchain
• Crypto.com

Step 4: Choose a Method of Payment

For beginners, it’s easiest to buy Bitcoin with AUD. Choosing the right method of payment is just as important as choosing the right platform. It determines how quickly you can complete the transaction and the fees that may be involved. Below are the most common payment methods used to buy Bitcoin in Australian dollars:

Physical Cash: Cash is king and doesn’t require a bank account. This method is ideal for Bitcoin ATM users who want privacy and a familiar transaction experience. 

Debit/Credit Card: This is one of the most straightforward ways to buy Bitcoin with AUD through an online exchange platform, but is usually the most expensive. It's fast, and the process is similar to making any other online purchase. However, some Australian banks block crypto transactions. Call your bank to confirm if there are any crypto-related restrictions. 

PayPal Account: PayPal is a popular payment method for buying Bitcoin. It offers a secure and convenient way to transfer funds. Buyer beware: not all exchanges accept PayPal, and those that do might charge higher transaction fees. 

Wire Transfer: For large Bitcoin purchases, a wire transfer is ideal. It's a safer way to transfer a significant amount of money and usually has lower fees compared to other methods. However, wire transfers typically take longer to process, which can delay your Bitcoin purchase.

Gift Cards (for Peer-to-Peer Transactions): For a more unconventional route, some peer-to-peer (P2P) platforms allow you to buy Bitcoin using gift cards. This method provides anonymity and is straightforward. Just be cautious of the risks and scams associated with P2P transactions.

Step 5: Have Your ID Ready

It’s almost impossible to buy Bitcoin in Australia without some sort of verification process. This is normal and required under Australian financial regulations to prevent money laundering and fraud. You should have the following documents on hand:

Government-Issued Photo ID: This is the most critical piece of identification. Typically, a driver's license or passport is preferred. The ID should be valid and clearly show your full name, photo, and date of birth. If you’re using a Bitcoin ATM, this should be all you need. 

Proof of Address: Most online exchanges require proof of your current address. This can be a utility bill, bank statement, or any official document that clearly shows your name and address. The document should be recent, usually within the last three months, to be considered valid.

Additional Verification Documents: Depending on the platform and the amount of Bitcoin you want to buy, additional documents might be required. This could include a selfie with your ID, a second form of ID, or answering security questions.

Why a Bitcoin ATM is The Best Way to Buy Bitcoin

Bitcoin ATMs are the easiest way to buy Bitcoin in Australia, no matter your experience level. These physical locations offer a tangible and reassuring point of contact perfectly suited for crypto-noobs and veterans alike.
For example, Localcoin ATMs have an intuitive interface that anyone can use, even if you’ve never purchased Bitcoin before. Just follow the prompts and you can’t go wrong. The entire process takes just 2 minutes, and all you need is one piece of photo ID. 

They work much like traditional ATMs, with a familiar process that’s less intimidating for first-timers. This simplicity is ideal if you’re new and overwhelmed by the complexity of online exchanges or the risks associated with P2P platforms.