Bitcoin was the world’s first cryptocurrency and, as you’ve probably already seen, has revolutionised the financial landscape since its first appearance in 2009. As a decentralised digital currency, Bitcoin is not only an alternative to fiat currencies and physical cash but also an investment opportunity for Australians looking to diversify their portfolios with a different asset type.
Whether you’re just starting out or already know the ins and outs of investing, this guide will help you understand how to buy Bitcoin in Australia. We will also explore its potential benefits and risks for investing in cryptocurrency more generally.
What is Bitcoin?
Bitcoin is a decentralised digital asset that operates on a blockchain – a public ledger that records every transaction for not only tighter security but also greater transparency. Each Bitcoin transaction is verified by network participants (miners) using cryptographic techniques. Think of it as a way to ensure the system stays secure without the need for a central authority, such as a bank or government.
One of the most interesting features of Bitcoin is its fixed supply – only 21 million Bitcoins will ever be created. Such scarcity, combined with increasing demand for the cryptocurrency, has seen Bitcoin’s price surge over the years. As the first cryptocurrency, many investors see Bitcoin as an attractive store of value and a decentralised alternative to traditional fiat currencies, like the Australian dollar.
Why invest in Bitcoin?
While every investor will have their own reasons for looking into Bitcoin, there are several compelling features to the cryptocurrency:
Potential for returns: Bitcoin has a history of volatility, and its price has risen dramatically over the past decade. While volatility is inherently risky, it also means there’s potential for returns, making Bitcoin an attractive option for long-term investors willing to ride out any short-term dips.
Diversification: Bitcoin can behave differently from traditional asset classes (such as stocks, bonds or real estate). As a result, it offers diversification to investors wanting to hedge against risks in other parts of their portfolios.
Store of value: While Bitcoin’s price is volatile in the short term, it may preserve purchasing power in the long run. In a world where central banks can increase the money supply, leading to inflation and currency devaluation, Bitcoin’s fixed supply offers a potential way to preserve purchasing power. This is especially relevant in emerging economies where inflation can erode currency value, turning Bitcoin into a potential hedge against economic instability.
Network effects and adoption: Bitcoin is a household name today and has experienced widespread adoption, with estimates suggesting that more than 100 million people worldwide own Bitcoin. Moreover, the Bitcoin network currently processes approximately 400,000 transactions daily, and its market capitalisation exceeded $2 trillion in December 2024.
Different ways to invest in Bitcoin
There are several ways to gain exposure to Bitcoin. It’s important to thoroughly research each option before investing, as they can carry varying levels of exposure and risk:
Buy Bitcoin (BTC) directly: One way to invest in Bitcoin is to purchase it directly through a broker like CMC Invest, allowing you to gain exposure to its price movements.
Buy a Bitcoin ETF or trust: If you’re the type of investor who wants exposure to Bitcoin without the complexities of owning and managing the cryptocurrency directly, Bitcoin ETFs (exchange-traded funds) and trusts are alternatives to consider. They track the price of Bitcoin and can be bought through a regular brokerage account, like with CMC Invest. Some popular examples include the iShares Bitcoin Trust (IBIT), Grayscale Bitcoin Trust (GBTC) and Fidelity Wise Origin Bitcoin Fund (FBTC). Bear in mind that ETFs come with management fees.
Bitcoin-related equities: Another way to invest in Bitcoin indirectly is by buying shares in companies that hold Bitcoin or are involved in the cryptocurrency industry, such as Bitcoin mining companies. However, this strategy could expose you to further company-specific risks that might not be directly tied to Bitcoin’s price.
How to buy Bitcoin with CMC Invest
If you’re an investor in Australia looking to buy cryptocurrency, CMC Invest offers access to Bitcoin and a selection of other coins through its integrated investing platform, providing an accessible way to start investing. Below is a step-by-step guide for new and existing CMC Invest customers on how to invest in Bitcoin:
Open a CMC Invest account: Get started by opening a CMC Invest account. You’ll get access to a wide range of investment products, including unregulated Bitcoin and other cryptocurrencies like Solana and Ethereum, as well as traditional asset types.
Opt-in for cryptocurrency investing: Once your account is set up, you’ll have access to over 45,000 stocks and ETFs as standard. If Bitcoin or other crypto interests you, you’ll need to opt-in to access unregulated blockchain assets like Bitcoin.
Research Bitcoin: Before investing, you’ll want to give yourself a solid base of understanding Bitcoin’s fundamentals and general market trends. CMC Invest has a range of educational resources and powerful charting tools to help investors make the best decisions for their portfolios.
Start investing in Bitcoin: Once you’ve opted in, you can start buying Bitcoin directly from the CMC Invest platform via the mobile app or desktop version.
Risks of investing in Bitcoin
While Bitcoin has the potential to deliver returns, it’s important to think about all the risks associated with the cryptocurrency:
Volatility: Bitcoin’s value can fluctuate greatly over short periods of time, driven largely by factors like market sentiment, regulatory news, market cycles and even geopolitical events. Investors must be prepared for unexpected price swings, so consider whether you have the risk appetite for such volatility.
Regulatory risks: As Bitcoin and other cryptocurrencies have gained popularity, they have faced regulatory scrutiny. Changes in regulations could impact Bitcoin’s price and long-term viability as an investment.
Speculative nature: Bitcoin is still a relatively young asset, and its long-term role in the global financial system remains to be seen. As a speculative investment, you should only commit capital you are willing to lose.
Conclusion
Bitcoin has rapidly grown from a niche digital currency to one of the most recognisable assets in the world. However, while Bitcoin does present the potential for returns, it also comes with substantial risks. With CMC Invest, you can start investing in crypto like Bitcoin on an awarded platform, with expert tools and resources to help you along the way.
If you’re ready to begin your Bitcoin investment adventure, sign up for a CMC Invest account and start exploring how this popular cryptocurrency could broaden your investment portfolio.
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