Bitcoin – The Basics
Bitcoin is a form of digital currency. It does not use intermediates like countries or banks for transactions. Bitcoin allows users to make secure and private transactions with fewer fees than traditional currency.
And to help you navigate through Bitcoin a little better, these are some facts about it:
- How Popular is it in Australia?
Australia has 46 Bitcoin ATMs. More places are accepting the currency every day.
- What’s the market cap like in Australia?
The current market cap for Bitcoin is over 769 billion dollars, and it is trending upwards.
- Is Bitcoin the most favoured cryptocurrency in Australia?
Bitcoin is currently the most used cryptocurrency in Australia. However, Ethereum, Ripple, and Litecoin are also used.
- Is it regulated and legal in Australia?
Bitcoin has been legal in Australia since 2013. No government regulates it, and that includes Australia. It is an independent currency.
Bitcoin Conversion to Money
You can turn Bitcoin into money in two different ways. You can turn it into fiat or government-issued currency, or you can convert it to another cryptocurrency. Depending on what method you choose, you will open up different opportunities.
Convert Bitcoin to Fiat Currency
There are a few ways to change your Bitcoins into fiat currency. Once you change it into fiat, you can spend and invest your money into things that you see fit. This method gives you cash on hand for any expense you have.
Convert It to Other Crypto Currencies
Some cryptocurrencies are more sought after for specific transactions or investments. If you have Bitcoin, but a site you’re using wants Ethereum, you can exchange your currency.
Options to Sell Bitcoin in Australia
There are a few ways you can sell your Bitcoin in Australia. Each method has its advantages and disadvantages. Here are some of the best ways to turn your Bitcoins into cash.
Use a Bitcoin Exchange
Bitcoin exchanges are systems that allow you to trade your Bitcoin for cash and other cryptocurrencies. These platforms follow the same regulations as other financial institutions in Australia, including taxes. To use these exchanges, you will need to have identity verification.
Here are some of the most popular exchange options and how they compare to each other. Most offer wallets, but you can usually transfer from any digital wallet you prefer to use.
|Transaction limit||Fees||Taxes||ID Verification Required||Registration Fee||Wallet|
|Swyftx||$100k AUD daily limit||Trade fees of 0.6% + 0.41% spread||Tax report generated on-site.||Yes||None||Swyftx provides a wallet, and you can use external wallets.|
|CoinJar||25 transactions per day||Fees based on trades with the max being 0.2%||You can download or print your sales and trades report||Yes||None||Coinjar has a wallet|
|Binance||Dependent on level Level 1 can trade 2 Bitcoin per day. Level 2 can trade up to 100 Bitcoin per day.||Fees based on trades with the max being .1%||You have to look over your history and calculate your taxes.||Yes||None||Trust wallet is the preferred wallet.|
|Coinspot||$50,000 limit per transaction||0.1 %||You have to input your own transaction information for taxes||Yes||None||Uses Coinspot wallet|
|Independent Reserve||No transaction limit||Based on trades with a Max of .5%||You gain access to a tax estimator on this exchange.||Yes||None||Independent Reserve has a wallet|
Sell Using Cash In Hand
You can sell your Bitcoin to people for cash. A website can help connect people, but they usually take a fee for the service. You can also find someone locally or online and carry out the transaction yourself.
You get the cash and give the buyer a link that transfers the Bitcoins from your digital wallet. This method is not recommended for new cryptocurrency users. It is harder to do than some of the other transactions on this list, and it is easy to get scammed with this method.
If you do this type of trade, you will want to keep information on the transaction. As long as you claim it on your taxes, it is legal to do in Australia currently.
Use a Peer To Peer Exchange
Peer to Peer exchange allows you more control than other Bitcoin exchanges. You make a deal with a buyer for an agreed-upon price then you make the trade. The site still takes a fee, usually for the ability to communicate and see buyer reputations.
Paxful is one of the most popular Peer to Peer exchanges. It puts together a large community of buyers and sellers so you can get great deals.
Use Bitcoin ATM
Bitcoin ATMs allow you to pull out fiat cash right away. Bitcoin ATMs are an easy and quick way to sell your Bitcoin. They charge fees that are set by the machine’s company. If you are looking for a Bitcoin ATM near you, Coinatmradar can help you find one.
Is There a Cap on How Much You Can Sell?
There is currently no cap on how much you can sell in Bitcoin. However, Bitcoin operates with limited liquidity, meaning that someone has to buy it at the market price when you sell your Bitcoin. Large sell-offs of $50,000 or more can cause slippage.
Slippage occurs when the price of the exchange changes due to a lack of market depth. If you sell too many Bitcoins, they may have to break up the transaction. When they break up the transaction, your remaining Bitcoins may sell at a lesser rate.
Exchanges may also have daily, weekly, or monthly transaction limits. These limits are to help lower losses to the customer from theft or hacking on their account. Each exchange sets its limit.
What Is Over-the-Counter Trade?
If you are in a situation that has to exchange large amounts of Bitcoin in a single day and want to avoid slippage, you may wish to try over the counter trade or OTC. OTC connects you directly to someone willing to buy large amounts of Bitcoin in one transaction.
You can make these exchanges in a few ways. First, there are OTC brokers. They put you in contact with someone willing to buy large amounts of Bitcoin. These are usually the safest and most reputable options, but they require more information from both the buyer and seller.
IRC rooms or Internet Relay Chat can connect you directly to buyers. Connecting directly to buyers can eliminate fees charged by brokers. However, with IRC, you have to watch out for fraud because you know less about the buyer.
You can also use ATMs to withdraw money directly. However, these usually have daily maximums on how much you can take. The advantage of ATMs is that you get your money right away.
Factors to Consider Before Selling Bitcoin
There are many things you have to think about before selling your Bitcoin.
- Price – Bitcoin, like any investment, can go up and down based on the market. You will want to find out what the current value is and make your decision accordingly.
- Fees – Find out what fees are associated with the sale of Bitcoin. These fees will depend on the platform you are using.
- Trading Limits – You need to know if there are any limits on your account before you make the transaction. These limits can deal with the price and amount of transactions you can make.
- Security Features – Safety is paramount, and the better security features the site and company use when selling and buying Bitcoin, the safer your transaction will be.
- Customer Support – You might be moving a lot of money through these companies, so you want to make sure that you can contact them easily.
- Customer Reviews – Reading customer reviews will help you determine if the company is trustworthy and safe. If the company has a lot of negative reviews, it may be better to avoid them.
Bottom Line – Is Bitcoin Taxed in Australia?
Australia does tax Bitcoin as an asset. When you mine it, you have to pay income tax on it. When you sell it, you have to pay capital gains taxes on the profit.
Selling Bitcoin in Australia is safe and legal, especially if you follow some simple rules. It can be challenging to learn for beginners, but once you have done it a few times, it is easy.