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Spend Your Bitcoin

At BTC.com.au, one of the questions we are often asked is where to spend your Bitcoin? When you're spending Bitcoin in Australia, you’ll note that many companies are only starting to learn the advantages of accepting Bitcoin. But with over a million cryptocurrency investors, trading in Bitcoin for goods is beginning to gain traction. The most common way to spend your Bitcoin is between two individuals, but you can also use a crypto exchange to convert your BTC to cash.

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When is the best time to buy Bitcoin?

If you’ve been watching the price of Bitcoin for a while, you’ve probably noticed the price can vary frequently. While Bitcoin and other cryptocurrencies are more volatile than stocks and other items, the right timing to make a purchase is the best way to make money.

There is no cut and dry method for when to buy Bitcoin (or any asset). However, by studying the market, you can choose when a purchase presents you with good results. Try to avoid people who claim to have insider knowledge on any particular stock, as these people are most likely trying to inflate stock prices and recover their losses artificially.

Before you purchase Bitcoin, educate yourself as much as possible on the uses of cryptocurrency from various reliable sources. Ideally, you should know how your chosen cryptocurrency works and what makes it valuable to others. Understand your trading obligations and what types of taxes you may need to pay when you make money trading Bitcoin and other cryptocurrencies.

It is best to start with a small investment, or about 5% of your investing dollar, when you start buying Bitcoin. As you gain confidence in your crypto trading abilities, you can begin to invest more. As with any investing strategy, never put more into the investment than you are prepared to lose. The time you choose to buy, sell, or spend your Bitcoin is up to you. There are times during your investments when you may make losses and others where you make a profit; with the right strategy in play, you should see a gain over a certain amount of time.

After you get the hang of buying and selling Bitcoin, you’ll be more experienced and may start looking into spending Bitcoin in Australia as a preferred way to buy items.

How to spend your Bitcoin?

The easiest way to spend your Bitcoin is between two individuals with a crypto wallet. If someone has an item you’d like and is willing to accept Bitcoin as payment, here is a guide to how that transaction works.

Ask for the public address of the recipient

Before any trade can be completed, you need to have their public address. In a retail setting, shop owners may use a QR code that you can scan to gain this information, and it’ll send the address directly to your crypto wallet.

Authenticate the transaction

After you have the public address and the amount required for the transaction, it needs to be authenticated using your private key. As soon as you enter your private key, the transaction cannot be reversed. Many Bitcoin users find that a wallet on a mobile device is the easiest way to spend your Bitcoin.

Verification

This stage is primarily out of the hands of the two parties carrying out the transaction. Bitcoin miners will verify the transaction as it moves through the blockchain. A Bitcoin transaction will be verified in around ten minutes, but it may take longer if many transactions are verified. Once the amount is shown in the recipient’s wallet, the transaction is completed.

Are there taxes on Bitcoins?

In Australia, over one million people are consistently trading and investing in Bitcoin and many other cryptocurrencies. When you spend your Bitcoin, knowing if that attracts any taxes can be challenging. When you’re spending Bitcoin in Australia, it is the same as selling it, and you may be required to pay taxes on the difference in values after your purchase.

If you’re a crypto trader who has an account with an Australian cryptocurrency designated service provider (DSP), the Australian Taxation Office (ATO) will have a record of any transaction. The Know Your Customer (KYC) will provide that information when you create an account with any Australian crypto exchange or wallet. The ATO knows when you buy, sell, and earn interest from your cryptocurrency transaction in any financial year – similar to how ATO knows if you earn interest in your bank accounts.

Crypto and your tax responsibilities

The ATO regards cryptocurrency, including Bitcoin, as similar to property, attracting capital gains tax (CGT) and income tax. If you make a purchase and then later sell it for more than you paid, you’ll need to pay tax on the income earned.

CGT can become very complicated, and you should talk with a financial advisor to thoroughly understand your tax obligations. In most instances, CGT will be applied every time you sell, buy things with Bitcoin (and other cryptocurrencies), trade Bitcoin for services, or exchange cryptocurrencies for others.

Taxes do not apply for purchasing cryptocurrency

If you purchase Bitcoin and other cryptocurrencies through an Australian crypto exchange using fiat currency (AUD, USD, etc.), you will not be charged any taxes, including GST. If you use a crypto exchange located outside of Australia, you’ll need to abide by that country’s tax laws.

The best way to avoid paying taxes on Bitcoin and cryptocurrency is to buy crypto and hold on to it. You’ll only be taxed on your crypto when you sell it for profit, the same as buying an asset in Australia.

If you’re ready to buy Bitcoin in Australia, you can open an account with BTC.com.au and start trading. At BTC.com.au, we have many helpful articles to assist with your crypto investing, including buying Ethereum, how to how to buy Bitcoin in Australia, how to sell Bitcoin, and what you can buy with Bitcoin. Open an account on our platform and start trading today!

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