How to buy and sell Bitcoin in Australia

Understanding Bitcoin basics

What is Bitcoin?

Bitcoin is a decentralised digital currency, known more commonly as a cryptocurrency, that exists entirely online and uses cryptography for security. Unlike the dollars in your bank account or wallet, you can't hold Bitcoin in your hand. Instead, it's stored digitally and can be sent directly from one person to another without going through a bank.

What makes Bitcoin different is its decentralised structure. Rather than being controlled by governments or banks, Bitcoin operates independently through a global network of computers. This ensures no single entity can control or manipulate it.

This unique design has earned Bitcoin the nickname "digital gold." Like gold, Bitcoin has a limited supply – only 21 million coins will ever exist. This built-in scarcity contrasts sharply with traditional currencies that central banks can print indefinitely, making it an alternative to conventional assets.

How does Bitcoin work?

Bitcoin transactions work through a network of computers that verify and record every exchange. When you send Bitcoin, your transaction is broadcast to the network and grouped with others into a "block." Specialised computers called miners solve complex mathematical puzzles to verify these transactions and add the new block to the blockchain - a permanent, public chain of transaction records that can't be altered.

Your Bitcoin is secured by cryptographic keys: a public key (like an account number for receiving Bitcoin) and a private key (like a PIN for sending it). This combination of distributed verification, permanent record-keeping and cryptographic security allows Bitcoin to work without banks or intermediaries.

How did Bitcoin start?

Bitcoin, launched in 2009 by an anonymous creator known as Satoshi Nakamoto, was the first cryptocurrency and remains the most well-known. It was created as a peer-to-peer electronic cash system, allowing people to send and receive payments without relying on financial institutions. Since its launch, Bitcoin has evolved from an experimental technology into a globally recognised digital asset.

What moves Bitcoin’s price?

Before deciding when to buy bitcoin or when to sell, it’s important to understand the forces that influence its market value. These factors shape whether prices rise, fall or remain volatile:

• Bitcoin supply. The current Bitcoin supply is capped at 21 million, which is expected to be exhausted by 2140. A finite supply means that the price of Bitcoin could increase if demand rises in the coming years
• Bad press. Any breaking news that concerns Bitcoin’s security, value and longevity tends to have a negative effect on the coin’s overall market price
• Integration. Bitcoin’s public profile depends on its integration into new payment systems and banking frameworks. If this is carried out successfully, demand might rise which will have a positive effect on Bitcoin’s price
• Key events. Regulation changes, security breaches and macroeconomic Bitcoin announcements can all affect prices. Any agreement between users on how to speed the network up could also see confidence in Bitcoin rise – pushing the price up
• Market capitalisation. The value of all the coins in existence and how users perceive this to be developing will increase or dampen demand. Growing market capitalisation could see Bitcoin become a more sought-after investment

How to buy Bitcoin in Australia

Buying cryptocurrency in Australia through the IG Markets app is straightforward. Follow these 4 steps to make your first purchase:

1. Open and fund your account
2. Choose Bitcoin
3. Open your position
4. Monitor your investment

1. Open and fund your account

Be the first to experience the IG Markets app by signing up to the waitlist. Once you've joined the waitlist, we'll notify you when the app goes live so you can complete your account setup.

To complete the registration process you'll need to provide identification documents and verify your identity to comply with Australian regulations. Once your account is set up you can fund your account via bank transfer, PayID or card.

2. Choose Bitcoin

Navigate to Bitcoin (BTC) on the platform. Review current market prices and recent performance to understand the landscape before making a decision. Take time to consider how much you want to invest and whether it fits within your broader financial plan.

3. Open your position

Once you're ready to buy Bitcoin, select BTC and enter the amount you want to spend. Review the transaction details, including any fees, before confirming your order. The Bitcoin will immediately reflect in your account.

4. Monitor your investment

Once your purchase is complete, you can track your Bitcoin holdings through the app. Keep an eye on market trends and news that might affect your investment.

How to sell Bitcoin in Australia

You may want to close your position to realise a profit or avoid further losses. When you're ready to sell Bitcoin, the IG Markets app makes the process just as simple:

1. Access your portfolio
2. Select Bitcoin to sell
3. Determine your sell amount
4. Place your sell order

1. Access your portfolio

Once the app launches, you’ll be able to log into your IG Markets app and navigate to your Bitcoin holdings. Then review your current position and its performance.

2. Select the Bitcoin to sell

Choose your Bitcoin position to begin the selling process. Consider factors like current market conditions and your investment goals before proceeding.

3. Determine your sell amount

Decide whether you want to sell your entire Bitcoin holding or just a portion. You might choose to take profits on part of your investment while keeping the rest for potential future gains.

4. Place your sell order

Enter the amount you wish to sell and review the transaction details. Check the current market price and any applicable fees to ensure you understand the total proceeds you'll receive.

Please note: Cryptocurrency trading is highly speculative and volatile. The cryptocurrency market is unregulated and you do not benefit from Investor protections available for regulated financial products. IG offers crypto trading through IG Digital Assets Australia Pty Ltd, which is registered with AUSTRAC and is separate from other IG Group entities including IG Australia Pty Ltd.

Common mistakes to avoid when buying and selling Bitcoin

Understanding common mistakes could help you navigate the Bitcoin market more effectively. Here are key mistakes to watch out for:

Investing more than you can afford to lose

Bitcoin markets are highly volatile, and prices can fluctuate dramatically. Only invest money you can afford to lose completely without impacting your financial stability. Avoid using borrowed money or funds needed for essential expenses.

Neglecting security practices 

Failing to secure your account properly can expose you to fraud and theft. Use strong, unique passwords, enable two-factor authentication and be cautious of phishing attempts. Never share your login credentials or respond to unsolicited messages requesting your account information.

Making emotional decisions 

Fear and greed often drive poor investment decisions. Panic selling during market dips or buying impulsively during rallies can lead to losses. Develop a clear investment strategy with predetermined entry and exit points and stick to it regardless of market sentiment.

Ignoring fees and costs 

Transaction fees, spreads and other costs can add up quickly, especially if you trade frequently. Understanding the fee structure helps you calculate your true returns and avoid unnecessary expenses that could erode your profits.

Failing to understand tax obligations 

Many traders overlook their tax responsibilities when buying and selling Bitcoin. This can lead to unexpected tax bills and potential penalties. Keep detailed records of all transactions for accurate reporting.

Bitcoin investment strategies for investors in Australia

Successful Bitcoin investing requires a strategic approach. Here are three popular strategies to consider:

Dollar cost averaging

This dollar-cost averaging strategy involves investing a fixed amount of money in Bitcoin at regular intervals, regardless of the price. Instead of trying to time the market perfectly, you buy consistently – whether prices are high or low. This approach can reduce the impact of volatility and remove the emotional stress of deciding when to buy. For example, you might invest $100 in Bitcoin every fortnight, gradually building your position over time.

Portfolio diversification 

Rather than investing all your funds in a single asset class, consider how Bitcoin fits within your broader investment portfolio. Some investors allocate a small percentage of their overall portfolio to Bitcoin, treating it as a high-risk, high-reward component alongside more traditional investments. This diversification approach helps manage risk, as Bitcoin's performance often differs from shares, bonds or property. However, ensure you research thoroughly and only invest what you can afford to lose.

Long-term holding (HODLing) 

This strategy involves buying Bitcoin and holding it for an extended period, regardless of short-term price fluctuations. Long-term holders believe in the fundamental value and future potential of Bitcoin as a store of value. This approach requires patience and conviction, as you'll need to withstand market volatility without panic selling during downturns. It's particularly popular among investors who view Bitcoin as a multi-year investment rather than a short-term trade.

Resources and tools to support your investing in Bitcoin

The IG platform provides comprehensive resources designed to help you make informed decisions.

Educational materials

Educational materials cover everything from beginner concepts to advanced trading strategies. These resources include articles, videos and guides that explain market analysis, technical indicators and trading psychology. Whether you're just starting out or looking to refine your approach, ongoing education is essential in the rapidly evolving Bitcoin market.

Market analysis tools

Market analysis tools help you track Bitcoin price movements, identify trends and spot potential opportunities. Real-time charts, price alerts and market news keep you informed about developments that might affect your investment. Many traders also benefit from economic calendars that highlight important events and announcements.

Risk management features

Risk management features allow you to set stop-losses and take-profit levels, helping you maintain discipline and protect your capital. These tools are particularly valuable during volatile market conditions when emotions can cloud judgment.

FAQs about buying and selling Bitcoin

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Footnotes: 
¹ IG Digital Assets Australia Pty Ltd (ABN 686 210 462) is registered with AUSTRAC as a Digital Currency Exchange provider. Cryptocurrency trading is highly speculative and volatile. The cryptocurrency market is unregulated and you do not benefit from Investor protections available for regulated financial products. Cryptocurrencies are not covered by the Australian Financial Complaints Authority (AFCA) scheme. You may lose all of your investment. The purpose of this website is solely to display information regarding the products and services available on the IG Markets App. It is not intended to offer access to any of such products and services. You may obtain access to such products and services on the IG Markets App. The information on this website does not take into account your objectives, financial situation or needs. You should consider whether cryptocurrency trading is appropriate for you in light of your circumstances and seek independent financial advice before deciding to trade.