How to invest in Coinbase from Australia

Recommended Broker 🇦🇺
⭐⭐⭐⭐⭐
👌Difficulty Low
☢️Commissions Zero
💲Minimum deposit 200$
🪙Instruments: Stocks like Coinbase, crypto, forex, commodities
⚖️Regulated by: Cyprus Securities and Exchange Commission (CySec), United Kingdom's Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC)
🌐 Official website: www.etoro.com *
* Your capital is at risk.

How to buy

If you live in Australia, a great way to invest in Coinbase shares is, definitely, this popular broker.

eToro*, one of the main brokers around the world, is registered and licensed, among others, by the Australian Securities and Investments Commission (ASIC).

We recommend eToro because you can create an account for free with this broker, and its fees for trading online are very low. Besides, eToro is available in your language, accepts users from Australia, it is really easy to manage, and its friendly interface is ideal for those who are starting to trade with cryptocurrencies and stocks.

How to sign up, step by step

The first thing you need to do is click here and fill in the fields on the right: enter your name, email, and set a password.

Then check your email: you should have received an email from eToro, click on the link and your account will be verified.

Once on eToro, you just have to click on “Deposit funds”, in the page menu.

There, you can choose how much money you want to add to your account (the minimum is $ 200) and the payment method:

As you can see in the image, the first deposit can be made by credit card, PayPal, or bank transfer.

If you have a choice, we do not recommend bank transfer because it takes longer, and it can be very frustrating to see the price of Coinbase rising while you wait for your transfer to be done.

How to make your first purchase

When eToro has confirmed the receipt of your credit, you just have to search for “Coinbase” in the search bar, click on “Invest” and choose the amount in dollars you want to invest.

*67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.

Some of its benefits are:

  1. It is possible to make investments in thousands of different products
  2. You can trade leveraged
  3. Really intuitive and straightforward
  4. Allows to learn from other trading strategies
  5. Allows you to go short

Main site: www.etoro.com *

In case you are thinking about trading Coinbase shares from Australia, eToro may be the best option nowadays.

“Social trading”, an innovative investment method that consists in replicating techniques and strategies from other experienced investors, has become popular because of eToro.

eToro is very helpful if you are still a novice user in trading, since it puts your investment on automatic by replicating moves from experienced traders with a long profit history. On the other hand, if you are an expert in the field willing to share your knowledge with the community, eToro rewards you with money.

Another thing to mention is how easy the interface is, which turns out perfect for new users that are just learning all about the trading world.

What instruments can you trade in eToro?

Besides stocks, there are other financial instruments available.

Raw materials

Most people invest in raw materials because of their stability. While other assets tend to fluctuate more, raw materials prices vary less and offer safety against inflation or market volatility. Nevertheless, prices do depend on supply and demand, so if the fear of possible inflation produces higher demand for a certain good, the price will also go up.

Take into account that, unlike shares, commodities don't pay dividends. Therefore, the only potential further income would come from a future sale of the asset.

Raw materials are usually categorized into two kinds: first, we have hard raw materials, which are precious metals (gold, silver, copper, and platinum), industrial metals, and oil; in second place are soft raw materials, which are agricultural products like sugar, cocoa, soybeans, among others.

What are ETFs?

ETFs or Exchange-Traded Funds are similar to index funds. They can be described as a merge between stocks and mutual funds. They can be traded like regular stocks, but include a wide diversity of assets and have lower fees.

Index Funds

Are most adequate for those interested in long-term investments, mostly for beginners. If you don't need an amount of money for the next five or ten years, index funds are the safest.

Contrary to common perception, it is very hard to beat the market (although you have probably heard of managers who achieve huge returns).

But putting aside some remarkable cases, all that glitters is not gold: if you hear of someone who has beaten the market, it was probably for a limited time, or their charges are really high. In the end, indexing is better because commissions are minimal. Also, take into account that if something happened in the past it doesn't necessarily represent a regular behavior.

Index funds offer solutions to both concerns: their rates are minor and they frequently beat active managers, but in the long term.

Currency market

Forex or currency trading allows obtaining profits by exchanging one currency for another.

If you decide to exchange the EUR/USD pair, for instance, you speculate how many dollars it will take to buy a euro, anticipating that the first currency (the euro) will revalue compared to the second (the dollar), to make a profit by selling it. Assume you entered when the price of one euro is 1.10 USD and you exit when the price has gone up to 1.15: thus, that margin will be yours once you sell back.

As you may have deduced, operating with currencies usually implies investing a lot, since fluctuations are normally low, or using a lot of leverage, which implies an extra risk. Our recommendation for those starting in the world of trading is to choose another market to begin with, since Forex is risky and complex.

eToro allows exchanging the most popular currency pairs. Nevertheless, take into consideration that in Forex sales are made through contract for differences, which means you will not own the real asset.

How do Contracts for Difference work?

If you have entered eToro previously, you probably realized that the acronym CFD appears repeatedly. Before we explain what this is, you must know that CFDs on eToro are only possible if you are short-selling or leverage higher than x2 (but this is not even available on the platform).

We will also refer to terms like leverage and “going short”, in case you are interested in day trading cryptocurrency or other more advanced operations.

The advantage of eToro is that it allows you to bet both “in the black” and “in red”. For example: you are sure that the Coinbase will fall, so perhaps you think that the best thing to do is wait until it does and then go in. But if it really falls, it might mean extra money for you.

You can accomplish that by “going short”. Here's how it works:

  • Someone lends you, let's say, 100 units of Coinbase, valued at a total of $ 5,000 (these are completely imaginary figures)
  • You sell the 100 units at $ 5,000
  • The Coinbase devaluates from $ 50 to $ 30
  • You purchase all 100 units one more time, but at the current value, $ 3,000
  • You pay back the 100 units
  • The rest is yours, so, you will have made $ 2000

It all sounds more tricky than it really is. Just take into account that by trading in Coinbase on eToro, you can make a profit if you anticipate downs in the price.

What's the difference between CFDs and futures?

What are the differences between Futures and CFDs?

  • Counterparty
    • Futures: the exchange is made with another investor.
    • CFDs: the counterparty is eToro, the brokerage.
  • Date of expiry:
    • Futures: they expire. Once the contract expires, it is closed even if you have losses.
    • CFDs: there is no expiration date. Thus, you can wait for your position to rise before exiting.
  • Options for trading:
    • Futures: there are fewer options
    • CFDs: they include lots of different assets, commodities and currencies
  • Minimum deposit:
    • Futures: very high minimum investment
    • CFDs: very low
  • Cost of trading and fees:
    • Futures: being higher figures, the costs are, commonly, proportionally lower
    • CFDs: rates are higher
  • Use of leverage:
    • Futures: it isn't possible to trade with leverage
    • CFDs: accessible leverage

How to use eToro

We said previously that eToro is very friendly and intuitive. Anyone can start investing without having to read endless explanations.

You won't have any problems with the interface if you have used any of the most common social networks.

We will explain, roughly, the registration steps and the different sections that you will see on the platform.

You will have to provide some personal data (like full name or address, for instance) when registering.

They will also ask you about your previous trade experience.

But don't feel intimidated, it is not a test that you have to pass. The objective is to know more about you and be clear about which financial instruments they should recommend according to your knowledge and experience.

Let's get to know the different sections of the platform.

With the “Set Price Alerts” tool, you'll be able to program an alarm when a security is at a certain price. This is ideal in case you want to purchase a security that is falling but you believe it will decrease even more.

The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.

“Instruments”, “People” and “CopyPortfolios” are within “Discover”. As we discussed in this guide, the different financial assets available on are:

  • Cryptocurrencies
  • Exchange-Traded Funds
  • stocks
  • Raw materials
  • Forex trading
  • Index funds

In the tab “People”, you will find the profiles of eToro users and their historical performance. This is where the term “social trading” makes sense since you can copy the strategies of the investors that you find most inspiring.

You can search and find users according to your interests. When you select an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, proportionally. If you invest $ 1000 and the user puts 20% of their funds in an asset, eToro will put $ 200 of your funds in the same asset or company as well.

Lastly, you will also find the CopyPortfolios divided into three main kinds: “Top Trader”, “Market” and “Partner”.

fondos
Remember that in some cases, you might prefer copying to CopyPortfolios than to other users, because you avoid putting all your eggs in one basket. There are all kinds of portfolios that you can find easily and are classified by sectors. Therefore, in case you think a specific industry, such as gaming or pharmacy, has good chances to succeed, you should look for that specific portfolio.

Do you know what “social trading” is?

The first platform that conceived trading as a social activity was eToro, and the idea spread like wildfire. Other brokers have also adopted this concept, but we have tried them all and eToro is way better.

But it wasn't just about creating yet another social network to talk about investment. The main achievement was in the possibility for users to copy the moves of experienced traders, who were in turn paid for their ideas.

You will find in the left menu of the site the options “Copy People” and “Invest in CopyPortfolios”.

CopyPortfolios

“CopyPortfolios” are a kind of portfolio that includes several goods of the same market. For example, if you consider that a particular sector will succeed in the near future but you are not sure which investments to make, you just have to pick a portfolio that groups together a variety of related companies in that industry.

You should know that in the last year, CopyPortfolio has given returns of 100%. And you can benefit from it just by choosing a portfolio, enter your selected amount, place the stop-loss and click on the “Invest” button.

Copy People

But you can also copy other users of the platform who are successful investors. It is really easy: you can find them with “Copy People” and just duplicate their moves.

In the profile of each user, you will see their risk profile (the higher the risk, the more chances of winning more and losing more money), their performance, and the type of financial instruments they operate..

Besides copying other investor's strategies, which is really interesting and helpful, we also suggest that you make the most out of the community by reading other users. You can learn a lot from their experiences and knowledge, mainly if your goal is to make a living from trading.

Trading strategies

There are lots of cryptotrading methods: for example, you can buy and hold, or you can day trade (taking advantage of price fluctuations).

If you are a beginner in the world of trading, my recommendation is something in between: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work its magic.

For example, if you purchase a cryptocurrency when its price is $ 15, then it increases to $ 25 and falls again to $17, the stop-loss will allow your operation to be closed, perhaps at $ 21 or $ 22. Therefore, you will obtain a good profit.

I know it might sound more appealing to sell when the price is at its highest, right before corrections, but unless you're psychic, that's impossible. The mentioned strategy is much more realistic and, well applied, it can work very well for you.

Later on, you will be able to apply more sophisticated techniques, such as short-selling or using leverage.

How does leverage work

Do you know what leverage is? Just in case, we'll define it shortly: another advantage of trading is that it lets you invest more money than what you really have. For instance, if you have $ 100 and you use x2 leverage, the amount of your investment will be $ 200.

Leverage, Take Profit and Stop Loss

Let's pretend that you are confident that Coinbase will raise its price, and you consider “going long. You have $ 1,000, but you actually can invest more and make more money.

There's the possibility of asking for a credit at your bank or other financial company, but it is a process that takes time, and when you receive the money, Coinbase might be already at a much higher price, so you wouldn't be able to invest the way you planned.

Leverage is exactly like a loan, but it is only a few clicks away! eToro allows you to operate with much higher amounts than what you actually have on the platform's wallet. As in the image below, you will see the different options you have:

apalancamiento

When operating with other assets you can use even more leverage. Why? Because cryptocurrencies regularly represent medium-long term investments, and leverage is used primarily for day trading or short-term operations. Let's talk a bit more about how leverage works.

If for your investment of $ 1,000, you use leverage x2, your investment is 2 * $ 1,000, that is to say, $ 2,000. eToro puts the remaining amount to reach that figure.

A week after that, Coinbase valuation rises up and now the value of your investment is 20% higher, which means, you have $ 2,400 in Coinbase shares. But you don't want to be too reckless, so you decide, wisely, to sell back.

You need to pay back the $ 1,000. You have $ 1,400 left, of which $ 1000 is the money you put in yourself, so you'll have earned $ 400.

By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment. That is pretty good.

But watch out: if all goes as you intended and the asset increases, you will make money. Nevertheless, if the asset decreases, you will also lose more money in the blink of an eye.

For instance: if the price falls by 10%, you won't lose $ 10, but twice (the leverage) that figure, that would be $ 20. Because of that, the concepts of Take Profit and Stop Loss are fundamental when using leverage.

Take Profit is a trading limit you can set for your assets: you ask the platform to sell them once they get to a point above the entry price. For instance, you can buy Coinbase shares at $ 100 and ask eToro to close your position automatically when it goes up to $ 120. It is very useful to avoid being blinded by greed: we would all accept a 20% profit when investing, but when you reach that 20% it is easy to ask yourself “what if this keeps going up and it is a mistake to exit?”. It's like you got assured in advance of not doing anything dumb in the future.

Stop Loss is even more necessary, mostly if you use leverage, since a reduced loss with leverage can be tragic for your wallet. You always need to establish a Stop Loss more tight than that suggested by eToro.

FAQ

How much is the minimum deposit?
The minimum deposit required is 200USD.

When will I be able to withdraw my funds?
Whenever you want. Simply sell your Coinbase position, go to “Withdraw Funds” section and that's all.

What deposit methods are accepted?
You can use: PayPal, Bank Transfer, Credit Card, Rapid Transfer, Klarna / Sofort Banking, Neteller and Skrill

* Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Disclaimer: 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.