Author: Nico Lim
Investing in crypto can seem complicated, but it can be pretty straightforward if you do a little research. To help you get started, here’s Cantar’s five-step guide to buying cryptocurrency.
1. Compare & choose an online exchange or trading platform
If you want to buy cryptocurrency, you’ll need an online app called a wallet to hold your currency. Most cryptocurrency exchanges allow you to create an account, then transfer fiat currency (such as NZ$) to buy cryptocurrencies such as Bitcoin or Ethereum. Many cryptocurrency trading exchanges also allow you to create a wallet to store your cryptocurrency, as well as buy and sell on the exchange.
Everyone has their own preferences and trading goals, which will dictate the exchange they choose. Some people want the widest selection of coins. Others are looking for NZ-based and personalised customer support. Some want all the advanced trading features, while others are just after the easiest way to buy crypto and let their investment grow.
When choosing an exchange, the main things you should keep in mind are:
- Company authenticity and platform security
- Ease-of-use
- Fees, spreads and any hidden charges
- Customer-support
- Number of coins offered
- Trading features
- Educational content
- Method of payment
- The ability to buy coins direct with NZ$ (possible with local exchanges)
There are a few exchanges that accept Kiwi dollars, although FX and various handling fees still apply:
| Provider | Cryptocurrencies |
| Easy Crypto/Swyftx | 400+ |
| Independent Reserve | 35+ |
| Lightning Pay | Bitcoin only |
| Revolut | 175+ |
| Sharesies | 4 |
This information is not an endorsement by Canstar of cryptocurrency or any specific provider. Canstar is providing factual information supplied by providers. Cryptocurrencies are speculative, complex and involve significant risks. Canstar is not providing a recommendation for your individual circumstances or in relation to any particular product or provider.
2. Sign up & verify your email & identity
Once you’ve chosen the crypto exchange that suits your needs, signing up is usually pretty straightforward. Choose your username and password, fill in your personal information and set up two-factor authentication (2FA), which gives your account an added layer of security.
From there all you have to do is verify your email, which will then prompt you to verify your identity (and potentially provide proof of residence). This can all be done in a few short minutes with a passport or another form of ID.
3. Add your bank account, select payment method & make a deposit
Once you have added your bank account and selected your preferred payment method, you can make a deposit into your account. Exchanges often offer deposits by bank transfer, PayPal, POLi, or credit and debit cards.
There are often extra charges associated with depositing funds into your account, especially if you use a credit or bank card. So always check the fees involved.
4. Go to the buy section & select the cryptocurrency you want to trade
Once your funds arrive in your crypto exchange account, you are free to purchase any type of cryptocurrency. Go to the buy/trade crypto section and select the cryptocurrency you wish to purchase.
Note: Buying cryptocurrency is pretty straightforward. However, if you’re new to the space, it’s a good idea to start off small and learn a bit about crypto before you dive right in.
5. Enter the amount you want, double-check the details and confirm your purchase
Enter how much NZ$ you want to invest or how much of the coin you want to buy, double-check the details are correct and confirm your purchase.
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Things to be careful of when purchasing cryptocurrency
Beware of fees
Regardless of your chosen crypto exchange, even if it accepts NZ$, you will have to pay numerous fees, including FX fees, because crypto trades are ultimately made in US$.
The range of fees you can expect to pay include:
- Foreign exchange fees of around 0.5%
- Standard trading fees: 0.5%-1%
- Most exchanges charge credit card/debit card transaction fees: 1%-3.5%
- You can also be charged withdrawal fees, for example Independent Reserve charges NZ$29 for crypto withdrawals
Tax implications
If you buy and sell cryptocurrency, regardless of whether you make a profit or a loss, there are important tax implications to consider.
In short, pretty much everybody who buys and sells crypto in NZ has to pay tax on any money they make. The Inland Revenue Department (IRD) breaks it down into three groups:
- People buying crypto with the intention to sell it
- Those buying crypto for a profit-making scheme
- Crypto traders
So, unless you’re buying crypto to actually use it as a currency and buy something (and, really, who does that, apart from people who need to pay some hacker’s ransom, or criminals on the dark web?), you must pay tax on any profits you make selling crypto.
Tax laws are not simple, but they are strict. If at the time of purchasing your crypto you have the intention of selling it at some point in the future, you need to include any profits you make at that point on your tax return.
So beware, it’s up to you to prove you never purchased the crypto as a speculative investment. As the IRD stipulates: “If you sell or exchange your cryptoassets for a profit and claim that you did not acquire them for the purpose of selling or exchanging them, you will need clear and compelling evidence to support your claim.”
About the reviewer of this page
This content was reviewed by Content Producer Andrew Broadley as part of our fact-checking process. Andrew is an experienced writer with a wide range of industry experience. Starting out, he cut his teeth working as a writer for print and online magazines, and he has worked in both journalism and editorial roles. His content has covered lifestyle and culture, marketing and, more recently, finance for Canstar.
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