There are countless coins, and even more ways to buy and sell them. So how do you get started? We had an expert weigh in.
Cryptocurrency has taken Australia by storm.
More than 20 per cent of adults across the country are thought to own some form of crypto, and rises and falls in the market regularly make for big news.
But with so many options for coins to invest in, and wallets to trade out of, it’s hard to know how to get started.
Comparison website Finder has crunched the numbers to find the best of the best exchanges, with the aim of making the hi-tech currency accessible for everyday Australians.
An exchange is a platform on which you can buy and sell cryptocurrency. They can be used to buy crypto with regular currency or convert crypto back to a dollar value – essentially they reflect the market price of cryptocurrency.
But, much like the coins, there are hundreds of exchanges; some fantastic and legitimate, and others … not so much.
Best exchange for beginners
Crypto expert James Edwards is one of many who reaped the rewards from the new technology.
He bought half a Bitcoin in 2014 for around $350, that same amount of Crypto is now worth about $30,000.
The self-described ‘nerd’ now works researching cryptocurrency for Finder, which has designed an awards system to help simplify information for those just wanting to learn more about the currencies.
According to the review site, Crypto.com was rated the best exchange for beginners.
“The awards were based on a range of criteria rather than someone or some people just picking. For example, Crypto.com scored highly because they have a good smartphone application, it’s easy to use, good customer support and you can set up recurring payments,” he told news.com.au.
“Another thing we wanted to do was only rank companies that are registered with AUSTRAC.”
Binance won three awards, including Exchange for Features and Exchange for Altcoins, as well as the award for Australian cryptocurrency Exchange (Overall).
Crypto.com won the category ‘Exchange for Beginners’, while Kraken won ‘Exchange for Trading’.
Meanwhile the award for ‘Exchange for Value’ went to Digital Surge, with CoinJar and Crypto.com a close second.
How to invest in cryptocurrency
Mr Edwards recommends for those wanting to dip their toes into Crypto should try the dollar-cost averaging method as their investment strategy.
This method theoretically helps prevent the massive highs and lows of the sometimes volatile coins.
“To do this, you need to set aside a certain amount of money and invest it at the same time each week. For example, you pick a time on a Friday morning where you invest $50 into coins,” he said.
“This helps take the emotion out of your investments, as it is just something you do each week. But it really just works in removing any timings related to the market, you’re not chasing the lows.”
What cryptocurrency to invest in?
With thousands, if not millions, of cryptocurrencies on the market, it can be intimidating to get started.
The most popular coins are Bitcoin, Ethereum, Tether and Binance which are all a solid starting point for your investments.
Mr Edwards recommends Ethereum as a good first coin as it is a solid long term option.
“Ethereum is good as it can be described as a layer of the internet, not just a currency. Ethereum is a popular first choice with many investors, after Bitcoin” he said.
“The next, or latest, version of the internet is called Web 3. This is going to be based on things like Eth. The Crypto is allowed to hold computer code and creates this hyper-secure layer which was previously very difficult on the internet.
“The layer of security enables people to be confident with the finances and financial services.”
He added to be wary of things that are too good to be true.
“For people just starting out, the best thing you can do is read and learn from reputable sources. What is really important is looking at who is providing the information and whether they are influencers or have something to gain from you buying their product,” he said.
Finder’s head of consumer research, Graham Cooke, said Australia’s enthusiasm for cryptocurrency has driven its growth.
“Cryptocurrency awareness in Australia is among the highest in the world. 85 per cent of Aussies say they know what cryptocurrency is, much higher than countries like the United States (59 per cent) and the United Kingdom (55 per cent),” he said.
It comes as ‘meme coin’ Shiba Inu rockets in value.
The surge comes amid a broad recovery in crypto with Bitcoin’s value going up to just under US$44,000 (A$61,000) and Ether’s price now at US$3,100 (A$4300).
SHIB tokens surged to $0.0000342 from the $0.000022 over the last day while Dogecoin jumped to $0.1661 from $0.145. Both SHIB and Dogecoin were based off popular internet memes.
The move caused nearly $10 million in losses to liquidations for traders of SHIB-tracked futures products, according to Coin Desk.
After becoming one of the dominant meme currencies of 2021, Shiba Inu’s value had been on a downward trend for the most part since late October.
On October 28 last year, Shiba hit an all-time high of $0.00008845.