Bitcoin was introduced in 2009 by the alias Satoshi Nakamoto. In the digital market, the most significant and oldest currency is Bitcoin. Bitcoin is a type of dispersed electronic currency developed to give a feasible substitute to conventional flat currency. The Bitcoin transfer process differs from the centralized process of bank transactions, as you can transfer your Bitcoin from a peer-to-peer account. The miners manage Your Bitcoin transactions on the blockchains to verify the transaction.

Is Bitcoin safe for Australians?

Bitcoin is a digital currency with many pitfalls regarding its uncertainty. Still, it is safe for you to invest now, as Bitcoin has become a mainstream investment in the market. It is still new to most people, and you may be one of them. If you are keen to invest in blockchain Australia, you will be pleased to know that Bitcoin is legal in Australia. In short, you still have an opportunity to do a lot with it as it is not linked to the Australian financial market. It is not regulated by the government and is not even affected by the government remotely.

But once you purchase it, you can transfer the Bitcoin to AUD. You have to follow Australian tax regulations on Bitcoin. You will always need to learn more about the tax regulations on bitcoin by ATO. Bitcoin has become prevalent in Australia to use in various ways, starting from paying for groceries used by retailers. Business people accept payments as Bitcoin for services and goods if they can afford a Bitcoin wallet to store or receive the currency. As an investor, there is a market opportunity gap in the potential of Bitcoin. According to research by the Independent Reserve Cryptocurrency Index (IRCI), about 16.8% of Australians are estimated to own Bitcoin.

Why do you pay tax on Bitcoin?

Initially, Bitcoin was utilized in the transactions to avoid tax implications. However, the governments caught on, and it was understood that Bitcoin could be used for illegal activities, so the tax authorities implied tax in Australia. So, the government regulates its transactions as Bitcoin is regarded as an intangible property and asset. Some of the bitcoin transactions are taxable:
  • Bitcoins are sold and mined by you to a third person.
  • Bitcoins that you have purchased from somebody to a third party.
  • To use bitcoins, purchased or mined from someone to buy services or goods.

The Bitcoin transactions you have mined are taxable as business or personal income, whereas Bitcoins purchased from somebody are taxable as investments in an asset.
You are liable for short-term capital gains tax if you have Bitcoins for less than a year. But if you held bitcoins for more than a year, it will make it possible for long-term capital gains.
Bitcoin is not an investment but is only a means to park the money as you collect euros or dollars to buy it. So, what should you do?

Being an Australian, you must buy from an Australian Bitcoin exchange for a safe investment in Bitcoin. However, there are ample choices for you when you select a Bitcoin exchange to have it from the Australian platforms or worldwide. Then, what should you do? Either buy Bitcoin from an Australian business or a foreign platform? So, to help you choose, consider the pros and cons of purchasing from an Aussie exchange.

Pros

  • The Australian Bitcoin exchange and platforms must be regulated and comply with AUSTRAC’s CTF/AML reporting obligations.
  • You can generally purchase Bitcoin with AUD.
  • The Australian Bitcoin exchange platform must support local payment methods like BPAY and POLi Payments.
  • You must have access to local customer support. 
  • You must have better customer protection if your deposits still need to be included.

Cons

  • You cannot trade Bitcoins anonymously as you must provide your personal to Australian exchange details as proof of ID.
  • The overseas will get much better liquidity given by some more prominent platforms.
  • AUD to Bitcoin prices are frequently higher than USD to Bitcoin prices, meaning you sometimes have to pay a premium to purchase AUD directly.
  • Some services are not provided to customers on the Australian exchanges—for instance, 100x leverage margin trading and many altcoins.
Irrespective of whether you will choose an overseas-based or Australian Bitcoin exchange, you must analyze various options before selecting which platform to use.

Is Bitcoin Safe?

To some extent, buying Bitcoin is more like buying any other currency. But you need to be careful when the price of Bitcoin rises and falls compared to the other currencies.

It is safer to invest in bitcoins than the typical investment in which you place coins yourself or give them to a third party. Then there is another precaution:  if you hold Bitcoins yourself, then there is a risk that you may not be able to store them appropriately and will lose them. But if you let a third party hold Bitcoins for you, they will be hacked, and unlike those keeping stocks or dollars, once your coins are hacked, they cannot be replaced easily, so you need to choose a trusted Bitcoin exchange platform.

Start your Bitcoin investment?

Investing in Bitcoin is risky, and you will be uncertain before your first move. However, this article has provided all the relevant information that investing in Bitcoin in Australia is safe. Moreover, Bitcoin trading is something you should learn about, mainly provided that it has great potential and may become a leading currency in the financial world. The first step is the most important and biggest one. So, do it today, choose the top Bitcoin exchange, and invest in the Bitcoin market in Australia.

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