Bitcoin is a digital currency.
Since its inception in 2008, Bitcoin has been the best performing asset class in the world, growing over 10,000% from 1 cent per coin to the current price today:
Bitcoin is a powerful asset to have in your investment portfolio because:
- It hedges against inflation
- It is a global currency
- It is not tied to any one country or government
- Fixed supply makes it scarce
- It cannot be "printed"
- Can be transferred anywhere or to anyone within seconds
The aim of this guide is to help you diversify your investment portfolio into Bitcoin.
I will walk you through the process of safely buying your first $100 of Bitcoin with NZD (the same process works for Australia/AUD).
Finding A Broker
To buy Bitcoin, you will need a broker.
A broker is a middleman who will source cryptocurrency on your behalf and deliver it to you.
This is similar to how a sharebroker interacts with the sharemarket on your behalf and purchases stocks for you.
The brokerage I currently use and recommend for NZD crypto purchases is EasyCrypto.
They are a NZ owned and operated company and a fully registered NZ Financial Services provider.
I’ve been with them for several years and am very happy with them.
You can set up a free EasyCrypto account here.
You will need your driver's license to verify your ID.
(Note: EasyCrypto also operates in Australia and is AUSTRAC registered. Aussies are welcome!)
Placing An Order
Now you have a crypto broker, you can place your first order!
For this example I will be purchasing $100 NZD in Bitcoin.
Just head to the EasyCrypto homepage and punch in $100 NZD to Bitcoin like so:
When you’re ready click the green Buy Now button.
In the next step, you will need to enter a wallet address:
This is where your Bitcoin will be delivered.
Not sure what that means?
Don’t worry, read on.
A Bitcoin wallet address is a bit like an email address. It’s a unique address only you can access, where people can send you digital mail, but in this case they are sending you Bitcoin. Some people think of it like an email address crossed with a bank account number.
How do you get a Bitcoin address? There are several options, some more complicated/expensive than others.
However, if you are just purchasing a small amount of Bitcoin, or if this is your first ever Bitcoin order, my recommendation would be to start with an exchange wallet.
While this is contrary to the popular advice (purists would advise never to store your Bitcoin on an exchange), in my opinion it’s the best and easiest way for a Bitcoin beginner to get started, as it makes accessing your Bitcoin as easy as using a regular username and password, just like a social media or Paypal account.
A Bitcoin exchange is a bit like a bank — they will hold the Bitcoin on your behalf and then you can withdraw it later if you need it.
Think of it like Sharesies or Paypal, but for Bitcoin.
The bonus with sending your Bitcoin to an exchange is it will not only store your Bitcoin, but also allow you to do some other things, like trade it for other cryptocurrencies (if you’re interested in investing in some other cryptocurrencies, such as Ethereum, Cardano etc) or even put it in a Bitcoin savings account and earn some interest.
However, be aware that carrying crypto on an exchange contains risk!
Your funds can be locked or lost in the event the exchange is compromised. However, carrying crypto in a private wallet also contains risk.
Personally, if this is your first purchase, and if it's only for a small amount of crypto like $100, I think an exchange contains less risk. You can read more about my reasoning and why I recommend exchanges for beginners here.
(Once you start accumulating more Bitcoin (say, over 4 or 5 figures) then you should start thinking about securing your crypto assets in a private wallet. If that sounds like you, check out my guide on private wallets here).
There are many exchanges you can use as your wallet, but the one I currently use is Binance.
I have been with them for years and am happy with them.
To get a Bitcoin address on Binance, you will need to open an account.
You can open a free Binance account here.
The process is simple and like opening any other account (again, just think of it like a Paypal account, but for Bitcoin).
Once you’ve got an account open, you’ll be given a wallet address!
Here’s how to find it:
Head to the Wallet tab.
Then click Fiat/Spot Deposit & Withdrawal.
Then click the yellow Deposit button.
Once you’re on the Deposit page, you will be asked to select which coin you want to deposit.
Under coin, select Bitcoin.
Then under network, also select Bitcoin, just like I’ve done below:
You should see your wallet address displayed as a series of numbers and letters. In the example above, it is the string that begins with 17AvEmhXf9……
This is your Bitcoin wallet address.
Think of this like your email address or bank account number — it’s a unique address just for you to receive Bitcoin.
Copy this address, then go back to your EasyCrypto order and paste it in the address field like I’ve done here:
Your order is ready to place, and EasyCrypto will deliver your Bitcoin to your Binance account.
Once your order is set, you need to pay for it.
With EasyCrypto you can use POLI, Account2Account or Bank deposit:
Once you’ve chosen your payment method, your order goes through.
If you’ve chosen Account2Account or Poli, your order should deliver within a few minutes.
If you’ve chosen bank deposit, you obviously will need to wait for the deposit to clear before they fulfill your order.
Once your order has been sent, it should arrive reasonably quickly.
In times when the network traffic heavy it might take an hour but usually it’s just a few minutes.
This particular order only took ten minutes or so:
This is part of the reason crypto is so revolutionary — the days of 3-day wire transfers are over. You can send money internationally and have it arrive in a few minutes.
That’s it! You now own Bitcoin.
Earn Some Interest
One of the bonuses of having your coins on an exchange is you can put your crypto to work.
On Binance, you can do this in the Earn section.
Here you can deposit your Bitcoin into savings wallets and earn interest.
At the time of writing this, the interest rate on Bitcoin at Binance is 3%, but I’ve had it as high as 6%:
Keep in mind there are risks to depositing in yield accounts.
Make sure you read the terms and conditions.
If in doubt, just leave the coins in your wallet.
Moving To A Private Wallet
As I mentioned earlier, an exchange wallet comes with risk, as the coins are not in your custody.
As you accumulate more crypto assets, you will want to move away from exchange storage and start using private wallets.
A private wallet is more complicated but is definitely the more secure way to store your Bitcoin, if you know what you're doing (and that's a big if!)
Once you're ready to start using a private wallet, you can read my guide here.
While Bitcoin has trended upwards strongly over the past decade, it remains a very volatile asset.
You can help smooth out this volatility in your portfolio by investing regularly.
For example, rather than investing $1,000 at once, you could invest $100 a week over 10 weeks.
Based on historical trends, this should serve you well over the long term.
Congratulations for adding Bitcoin to your portfolio!