Like any other country across the world, New Zealand has experienced a rise in interest in cryptocurrency. With more people jumping onto the cryptocurrency bandwagon, it’s essential to know which channels to follow to buy Bitcoin safely.
This article is the ultimate guide on how to buy Bitcoin in New Zealand in 2021 and explains facts you should know before buying Bitcoin.
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Is Bitcoin (BTC) Trading Legal in New Zealand?
There’s currently no specific law regulating Bitcoin trading in New Zealand. Therefore, it’s safe to say that Bitcoin trading is legal in New Zealand. However, due to the sparse regulations in this sector, it’s difficult to get legal help if something goes wrong.
The Financial Market Authority (FMA) in New Zealand warns New Zealanders of the potentially significant losses that come with trading Bitcoin and other cryptocurrencies and the frauds associated with the cryptocurrency investments.
Bitcoin & Crypto Trading in New Zealand
With the free Bitcoin trading environment in New Zealand, investors have a chance to buy, sell, hold, and use their Bitcoin as they please. More people are choosing to invest in Bitcoin and cryptocurrencies.
As the demand for Bitcoin increases among New Zealanders, there has been a rise in the number of crypto exchanges and marketplaces for trading Bitcoin.
Investors can buy and sell Bitcoin in multiple places like exchanges, P2P marketplaces, over-the-counter brokers, and other private trades.
Most of these platforms are local and offer services locally to NZ investors. The boundaries are open to international Bitcoin trading platforms, and many people are embracing their services.
Further, in this article, we’ll mention some places we think are the best platforms for you to buy Bitcoin in New Zealand.
How to Buy Bitcoin in NZ (Step-by-step)
This guide highlights eToro as a leading cryptocurrency exchange globally, with excellent features and top-tier security systems for safe trading. Even though it offers other services like CFD trading, eToro New Zealand allows investors to trade cryptocurrencies only.
Upon signing up, eToro will provide you with a secure cryptocurrency wallet where you can safely store your Bitcoin as you hold or trade them. It has a simple, user-friendly interface that makes trading easy for both experienced and new traders.
Here’s a step-by-step guide when buying Bitcoin on eToro.
Step 1 – Sign up with eToro.
The sign-up process is seamless. On eToro’s official website, find the “Get Started” button and click on it. Fill in the application form with your correct details and agree to the policies and conditions. You can also choose to sign up through your Facebook or Google Account.
As you sign up, you’ll be required to verify your identity as part of KYC requirements and in compliance with the government’s financial regulations.
The verification process is easy and will need you to upload a picture of a government-issued ID card or driver’s license and a copy of a utility bill document or financial statement showing your address.
eToro supports several payment methods which you can use to deposit funds into your eToro account. It accepts traditional methods like bank transfers and cards and online wallets like WebMoney, Neteller, Skrill, and PayPal.
To deposit funds, find the “Fund Your Account” section on your account and click on it. Select the amount, currency, and your preferred payment method and proceed. Most of the deposit methods process the funds immediately, and they appear on your account instantly.
eToro accepts $200 as the minimum deposit for all accounts.
Step 3 – Buy BTC Safely & Easily
eToro hosts up to 15 top cryptocurrencies, with Bitcoin leading the list. To buy Bitcoin, click on “Trade Markets” on your dashboard and choose Bitcoin. Click on “Trade” and specify the amount of BTC you want to buy in NZD.
You can customize other settings like ‘Stop Loss’ and ‘Take Profit’ for the trade, even though this step is not compulsory. After everything is set, click on “Open Trade,” and you’ll have initiated a transaction to buy your first Bitcoin.
Regulation of Bitcoin in New Zealand
According to a report published in September 2018 on the cryptocurrency regulations, New Zealand has not passed any laws regulating cryptocurrencies. However, some existing laws regulate cryptocurrencies to counter-terrorism and money laundering activities, impose taxes, and protect investors.
In October 2017, the FMA announced and published a guide for Initial Coin Offerings (ICOs) and cryptocurrencies to facilitate responsible innovation and ensure flexibility in the financial market.
The guidance requires all entities that offer cryptocurrency-related financial services to comply with the FMC Act (2013) ‘fair dealing’ requirements.
For the entity to provide services to New Zealanders, it must be compliant with the Financial Service Providers Act of 2008 and be present in the Financial Service Providers Register.
On ICOs, the guidance indicates that ICOs are considered a financial service that operates value transfer service, and tokens can be acquired using legal tenders like the NZ Dollar and thus subject to the FMC Act.
On anti-money laundering requirements, there’s neither guidance nor legislation from the government of FMA that refers specifically to cryptocurrencies.
However, some of the crypto exchanges are registered as reporting entities to the Department of Internal Affairs (DIA) on anti-money laundering (AML) and Counter-financing terrorism (CFT).
Suppose a business accepts payment in the form of cryptocurrency. In that case, it is liable to pay an income tax as per the law, and the amount depends on the value of the cryptocurrency in NZD at the time of transaction.
If a person buys cryptocurrency for disposal, any realized profits or losses from selling it will attract a tax and must be recorded.
Any cryptocurrency gained from mining is also taxed as mining is considered a profit-making activity.
Best Bitcoin Exchanges in New Zealand
As promised earlier, we consider two Bitcoin exchanges as the best places to buy Bitcoin in New Zealand. They are eToro.com and Coinbase.com.
As a leading cryptocurrency exchange globally, this Israeli-based company has established itself in New Zealand and gained a large client base. In New Zealand, eToro is limited to trading cryptocurrencies only because of country restrictions.
Coinbase is the best choice for first-time cryptocurrency investors because of its simple interface and the easy Bitcoin-buying process. Having extended its reach to New Zealand, the USA-based broker stands as one of the most preferred Bitcoin exchanges by many investors.
At the time of this writing, the price of Bitcoin in New Zealand Dollars (NZD) is as follows.
1 Bitcoin equals 89,518.12 New Zealand Dollar.
Due to the high volatility associated with the cryptocurrency market, the price of Bitcoin keeps changing. Please check for the current price.
Cryptocurrency Scams in New Zealand
The unregulated nature of Bitcoin trading and exchanges in New Zealand predisposes investors to cryptocurrency scams. Recent reports have shown a rise in the number of people getting scammed every day.
Earlier, most scams were orchestrated in the form of Ponzi schemes, but now people are alert when they encounter such. Therefore, scammers are now coming up with new tactics and tricks to lure unsuspecting investors and get away with their money.
One of such incidences is Bruce Harding’s experience, an enthusiastic Bitcoin investor in New Zealand. According to his narrative, the scammer contacted him on Instagram and talked about investments on ExpresscoinFX.com, where they can make huge profits fast.
The scammer showed him proof of potential earnings and profits skyrocketing to $5000 within few days. Another one had made $1500 in two days from a deposit of $200. Enticed and happy, Harding signed up to the account and deposited $1500.
As expected, his profits began to grow. But when he sent a withdrawal request, he was asked to pay $2500 before the payment is made. The money was never released, and they cut off communication with him.
Many other people have fallen prey to such tricks from cunning scammers, so the FMA warns cryptocurrency investors to be careful as they are hacking and fraud targets.
As an investor, you can protect yourself by:
Keeping your private key safe and uncompromised.
Investigating any platform offering cryptocurrency services before committing your money to it.
Avoiding any suspicious emails and sign-ins which can give scammers access to your wallets.
Bitcoin Mining in New Zealand
Bitcoin mining is an innovative way to earn Bitcoin. However, it may be an impractical exercise in New Zealand because of the high electricity costs and the low-profit margins.
As time goes by and the value of Bitcoin increases, even the difficulty in mining the Bitcoin and the expenses that accompany the process also continues to rise.
Investors interested in mining Bitcoin invest heavily in acquiring and maintaining Bitcoin mining machinery and incur electricity costs during mining. When total investment is weighed against the expected returns, profit margins are too low or negative.
Since many coins are choosing the proof-of-stake mining method, many investors now prefer to mine other coins and convert them to Bitcoin. It’s a time-saving method, and the profits earned are higher compared to mining Bitcoin directly.
Bitcoin Popularity in New Zealand
Even with its ‘buyers beware’ state in New Zealand because of no regulations, it’s evident that Bitcoin has taken center stage and gone into the mainstream as more people invest in it.
The ease of transacting business using Bitcoin has encouraged more people to adopt it as a payment method for goods and services. In 2019, a report published in the Financial Times indicated that New Zealand had allowed companies to pay their employees using their preferred cryptocurrencies.
In this way, Pay-As-You-Earn tax is easily imposed on the salaries paid through cryptocurrencies as long as it is pegged to the fiat currency. These payments are subject to employer agreement and other terms, but it’s a great move to promote the mainstream adoption of cryptocurrencies in the country.
A surge in the number of new investors is expected as renowned institutions invest in Bitcoin.
A recent development highlights the New Zealand Fund Management, which publicly announced its investment in Bitcoin. At the end of 2020, the institution had assets worth $350 million, of which 5% is invested in Bitcoin.
New Zealanders have access to the best Bitcoin exchanges from across the world so they can trade Bitcoin safely and on the best platforms. The FMA constantly reminds Bitcoin buyers to be careful in their investments as the cryptocurrency market is prone to scams and online fraud.
Before buying Bitcoin from any exchange, ensure that the exchange:
Is in the Financial Service Providers Register.
Is part of the dispute resolution scheme
Segregates your funds and stores them safely in a trust account.
Where Can I Use Bitcoin in New Zealand?
There are several places you can use Bitcoin in New Zealand. Most of these businesses are online, but there are also physical businesses that are accepting Bitcoin. The list is long and continues to grow daily.
In this article, we’ll mention some of these places, and you can check them out.
They include CoinCompass, XT88, Mangawhai Osteopathy, Hyperion Wines, Jmafi, MyGold, Aurum, Oyster & Chop, Mega, WebSope, GoWeb NZ, 3D Hub, Electroluxvacuums, Cerebral Palsy Society NZ, TreeFellas, MrPipes, The Battery Clinic, Bookabach, Beach Surf School, Chris Meek, Ipurangi Limited, Matrix Typography, Mane Salon, KUSKE, INSTYLING, Abalone Thai, Pyramid Valley Vineyards, and many others.
Even with many places to spend Bitcoin, many investors prefer to buy and hold like they’d do other securities and then sell later when the price has gone higher. If the history is anything to go by, the price of Bitcoin today is over 1000 times its price in its early days, and it’s expected to continue going high.
Bitcoin ATMs in New Zealand
According to coinatmradar.com, there is presently no Bitcoin ATM in New Zealand. In 2014, Bitcoin Central launched a Bitcoin ATM in New Zealand at the Ironbar Café in Auckland to serve New Zealand investors.
It would operate in two ways as investors could buy and sell Bitcoin for NZD safely as Robocoin made the machine with multi-layer security to keep the transactions safe. However, these services did not last long as the company had to shut down its operations in 2018.
In an announcement made on the company’s official website, the CEO lamented the negativity facing Bitcoin in the area, which made it difficult to access proper banking facilities to keep the ATM running.
Must-Know Facts to Know Before Buying Bitcoin
There are a lot of speculations about Bitcoin, with good reason. Some think it’s a well-orchestrated Ponzi scheme waiting to crash in an instant, while others think it’s the digital form of gold, and so they go for it.
Far from the speculations, here are some facts about Bitcoin.
Bitcoin is one of the most volatile assets in the financial space. Its price can skyrocket within hours and drop just as fast. If you’re planning to invest in Bitcoin, you should be aware of this and work on your timing because whether you make a profit or a loss will depend on your timing.
Bitcoin is not anonymous, as many people tend to believe. The buyer and seller’s identity is not public, but the details of the transaction are stored in a public ledger called the blockchain.
Bitcoin is usable as a payment method, and some governments impose a tax on profits generated from Bitcoin used within the country. This depends on the set regulations in the country. Before buying Bitcoin, it’s important to familiarize yourself with such requirements depending on the country you live in.
Bitcoin is for everyone because, as a digital currency, it’s not controlled by anyone or limited to a specific group of people. As much as you can buy Bitcoin from anywhere in the world, you can also participate in the mining process.
How to Buy Bitcoin New Zealand – Best New Zealand Bitcoin Exchange 2020 Guide
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