It has been 15 whole years since Satoshi Nakamoto first introduced the world to Bitcoins. In the short time since then, the global crypto ecosystem has grown massively, from what was only an obsessive pastime of cybernerds to becoming a widely accepted asset class with its own exchange-traded funds.
Today, there is absolutely no doubt that cryptos are going to be a defining feature of the economy and global markets of the future. Would you like to learn how to find your way around the world of cryptos, so that you too can take advantage of this new economy? Well, read on as we get into it.
Are Cryptocurrencies Legal in Australia?
Of course, the very first thing that you would have to understand is the legal status of the cryptocurrency market. Regulatory attitudes to crypto vary wildly across the world, with some countries expressing utmost caution while others are fully optimistic.
In the case of Australia, the government has maintained a rather positive approach to cryptocurrency. Regulators even formally acknowledged Bitcoin as a lawful means of payment in July 2017; however, it isn’t legal tender. Essentially, this means that while you cannot pay taxes or conduct any other official business with Bitcoins, you can buy, sell, and trade your cryptos with any willing counterparties.
To further enhance the crypto economy in the country, the Australian Transaction Reports and Analysis Centre (AUSTRAC) put together a regulatory framework for cryptos, which was released in 2018. These regulations require all crypto exchange companies with operations in Australia to register with AUSTRAC.
While this is reassuring investors—as it ensures reliability and transparency in the crypto ecosystem in Australia, it also means that there are taxation implications for trading crypto. According to the Australian Taxation Office, cryptocurrencies are considered an asset for capital gains tax purposes. Essentially, this means that any capital gains or losses from your crypto investments must be reported on your tax returns, and count towards your total tax bill.
How to Choose the Right Australian Crypto Exchange
Well, when it comes to trading crypto, the very first thing that you would typically have to do is to decide what exchange platform you would prefer to use. This is because, it’s usually through exchange sites that you can buy, sell and transact with other crypto enthusiasts. So, whichever one you choose is going to have a significant impact in determining your crypto trading experience.
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Credibility
The first factor to consider in choosing a fitting exchange for your needs is the exchange’s credibility. We understand that according to AUSTRAC regulations, every Australian crypto exchange is required to register with the authorities, and is thus subject to regulation. Regardless, exchanges can still have security issues, usability issues, and a whole lot of other issues.
So, you should research online reviews to learn about the experiences of other users who have interacted with the exchanges prior. You may also just conduct an independent audit to see what platforms have the most robust safety protocols to protect your crypto tokens.
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Diversity of Cryptos
Another thing to consider is the diversity of crypto options available on the exchange. Of course, Bitcoin, Ethereum, and Litecoin are some of the most popular ones and are typically present on all exchanges. However, there are a lot of opportunities to be found in the lesser-known tokens. So, having a lot of these options to choose from is a key factor, especially if you are going to be day trading.
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Transactions Fees
All crypto trading platforms charge fees in one form or another, on everything from making deposits and making trades, to making withdrawals. These fees typically vary across platforms. You may want to consider looking for platforms that offer the most favourable fee terms, as these fees can mount up and become a significant drain on your trading profitability.
Tips for Secure Crypto Trading
Just as it is in the wider financial markets, the world of crypto is also filled with bad actors looking to take advantage of loopholes and vulnerabilities to steal from crypto investors. Aside from choosing a really secure trading platform, you also have to pay extra attention to security measures to ensure that you are always protected. Do these things:
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Ensure Your Chosen Crypto Exchange is Registered
Of course, your preferred crypto exchange platform must be registered appropriately with AUSTRAC. This implies that they are subject to, at least, a minimally acceptable level of regulation and oversight.
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Use Two-factor Authentication
There are multiple methods for two-factor authentication. You can use SMS or email shortcodes, and you can also use authenticator apps. Either way, you need to make sure that your password is not all anyone needs to get into your trading account and wreak havoc.
Mistakes happen all the time, and passwords can get leaked for whatever reason. However, with two-factor authentication, you would get an extra layer of security. What are the chances that a hacker would get into your crypto account and your email at the same time? Except you are really being targeted in a personal attack, the chances are slim. Hackers typically try to move as fast as possible and move on to their next potential victim, leaving you and your crypto tokens safe.
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Consider Hardware Wallets
Finally, you should probably consider using hardware wallets to store your crypto tokens, especially if you are holding high volumes. These devices are designed to securely store your private keys offline, taking them outside the reach of hackers and making them less susceptible to cyber threats. This is much more secure than simply storing your crypto tokens on an exchange.
The Future of Crypto in Australia
The future looks great for the crypto ecosystem in Australia. We believe that the regulatory framework from the government will only get better, while more and more businesses also begin to adopt cryptos as a form of payment.
If the government’s support for cryptocurrencies continues on its current trajectory, this will position Australia as a leading jurisdiction for crypto investment. This will translate to a high influx of global investors and tech enthusiasts coming to live, work, and invest in Australia, making the country a key centre in the growth and evolution of the global crypto industry.
Conclusion
The crypto ecosystem is in a state of high growth globally, creating multiple investment opportunities for investors across the board. You too can get in today, and begin to take advantage of these many opportunities.
All you have to do is to make sure that you take maximum care, especially in choosing your preferred exchange platform. Always conduct your due diligence, understand your risk tolerance parameters, and always stay within them. Welcome to the future!
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