A Beginner’s Guide to Investing in Cryptocurrencies in New Zealand
Our guide explains what cryptocurrencies are, what coins are available, the risks, how to avoid scams and how to choose which crypto to buy.
Updated 8 August 2023
Our guide covers:
Warning:
- What is cryptocurrency and how does it work?
- How many cryptocurrencies are there, and why are there so many?
- How to buy, sell and spend cryptocurrencies
- What are the risks?
- Where can you buy cryptocurrencies in New Zealand?
- Frequently asked questions
Warning:
- By publishing this guide, we are not recommending or suggesting in any way or form any cryptocurrency is a suitable investment.
- We published and routinely update this guide to help people decide what's best for them - MoneyHub is conservative and our publisher, Christopher Walsh, has zero cryptocurrency investments.
- We present this information in good faith and remain objective at all times. By including this guide under our Investing and Saving section, we are not advocating that cryptocurrency is an investment. We may earn a referral bonus for anyone that clicks on some of the below links - see our Advertising Policy for more details.
What is cryptocurrency and how does it work?
Cryptocurrencies are a digital asset that digital assets that can be transferred, stored and traded electronically. The owner of a cryptocurrency holds a 'private key' which allows them to do with it what they want, just as knowing your PIN lets you withdraw money from an ATM or make an EFTPOS purchase.
The difference between cryptocurrencies and traditional currencies such as the New Zealand dollar is that the value is driven by supply and demand. For example, one Bitcoin or Ethereum is only worth what someone is willing to pay for it. This is why the price of cryptocurrency moves around so much (unlike the New Zealand dollar, for example) and makes it hard to value.
The difference between cryptocurrencies and traditional currencies such as the New Zealand dollar is that the value is driven by supply and demand. For example, one Bitcoin or Ethereum is only worth what someone is willing to pay for it. This is why the price of cryptocurrency moves around so much (unlike the New Zealand dollar, for example) and makes it hard to value.
Understanding peer-to-peer transactions and blockchain
Cryptocurrency runs outside of government regulation or the banking system. For example, if you pay for something with cryptocurrency, the transaction is 'peer-to-peer', and the blockchain keeps a public record, but your details are anonymous (you can read more about what that means here). This is very different from traditional purchases where the bank keeps a private record.
Cryptocurrencies are legal in New Zealand, but they're not legal tender, unlike the NZ Dollar. However, a handful of New Zealand businesses accept specific cryptocurrencies as a form of payment as this this list, published by Easy Crypto, details.
Cryptocurrencies are legal in New Zealand, but they're not legal tender, unlike the NZ Dollar. However, a handful of New Zealand businesses accept specific cryptocurrencies as a form of payment as this this list, published by Easy Crypto, details.
How many cryptocurrencies are there, and why are there so many?
We estimate there to be around 6,000 cryptocurrencies. However, in terms of their total value, the top 20 coins make up around 95% of the total crypto market capitalisation. With a market capitalisation hovering around 1 trillion USD, Bitcoin makes up around half of the total 2.2 trillion USD total cryptocurrency market value.
Other cryptocurrencies with large market capitalisations include Ethereum, Solana, Cardano, Ripple/XRP and Dogecoin. Because of the price volatility, we suggest visiting this website to see the latest price, movements and market capitalisation.
Developing new cryptocurrencies has become very lucrative for inventors and promoters who sell coins to early investors. Sometimes this has been profitable, such as the launch of Bitcoin and Ethereum, and sometimes it has been a scam. Investopedia, a trusted source for cryptocurrency matters, suggests 80% of new coins entering the market are scams. New Zealanders have been targeted with 'scam coins' such as SellMyGood Coin and SquidGame Coin.
Other cryptocurrencies with large market capitalisations include Ethereum, Solana, Cardano, Ripple/XRP and Dogecoin. Because of the price volatility, we suggest visiting this website to see the latest price, movements and market capitalisation.
Developing new cryptocurrencies has become very lucrative for inventors and promoters who sell coins to early investors. Sometimes this has been profitable, such as the launch of Bitcoin and Ethereum, and sometimes it has been a scam. Investopedia, a trusted source for cryptocurrency matters, suggests 80% of new coins entering the market are scams. New Zealanders have been targeted with 'scam coins' such as SellMyGood Coin and SquidGame Coin.
How to buy, sell and spend cryptocurrencies
There are many websites where you can trade cryptocurrency, but not all are genuine, and like so many coins, there are a lot of scams. However, established platforms like Easy Crypto, Binance and Swyftx offer services to New Zealanders. These platforms are widely trusted by investors in Bitcoin, Ethereum and dozens of other high-value coins.
The Financial Markets Authority (FMA) has stated: "Many overseas cryptocurrency exchanges are unregulated and operate exclusively online – with no connection to New Zealand. This makes it hard to find out who is offering, exchanging, buying or selling it. It also makes it unlikely you'll recover your money if things go wrong".
The Financial Markets Authority (FMA) has stated: "Many overseas cryptocurrency exchanges are unregulated and operate exclusively online – with no connection to New Zealand. This makes it hard to find out who is offering, exchanging, buying or selling it. It also makes it unlikely you'll recover your money if things go wrong".
What are the risks?
Cryptocurrencies are unregulated and highly volatile. There is also speculation that they soon will be accepted widely as a form of payment. However, this is grossly exaggerated and based on occasional news stories. For example, PayPal announced it would allow customers to buy, sell or trade Bitcoin (but, importantly, not accept it as a form of payment. Later, Tesla announced in December that it would accept Dogecoin as a form of payment for merchandise (not cars). Both examples were grossly misrepresented by dubious players announcing that Tesla will accept crypto for cars and PayPal for payments - this is not the situation.
These announcements attract headlines that players in the market use to encourage new investors to buy whatever coin they're hyping up. The acceptance of cryptocurrency for payment is not mainstream. The FMA has stated "Cryptocurrencies have less practical value than money which can be used to buy all goods and services".
These announcements attract headlines that players in the market use to encourage new investors to buy whatever coin they're hyping up. The acceptance of cryptocurrency for payment is not mainstream. The FMA has stated "Cryptocurrencies have less practical value than money which can be used to buy all goods and services".
Where can you buy cryptocurrencies in New Zealand?
- There are several options for buying Cryptocurrencies in New Zealand - our list below includes the most trusted and popular methods.
- Easy Crypto and Swyftx are two of the most popular - our comparison guide looks at their fees, features and available cryptocurrencies.
- Disclaimer - the inclusion of any Cryptocurrency exchange, platform or broker below is not an endorsement or a promotion. Our list is for information purposes only.
Easy Crypto
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Easy Crypto is a popular destination to buy and sell cryptocurrencies in New Zealand. Easy Crypto has also adopted the non-custodial route and requires users who buy cryptocurrencies from them to have a private wallet to receive the settlement of their purchase. This avoids the risk that your investment is stolen from a hack on Easy Crypto, as has happened with other platforms which stored cryptocurrencies.
Easy Crypto has gone to great lengths to guide users on keeping their cryptocurrencies safe, with recommendations on hardware wallets, and plenty of user guides on each recommended model. Details:
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Swyftx
Swyftx launched its dedicated New Zealand platform in August 2021 with a focus on low fees, minimal spreads and a wide choice of coins. The exchange offers 280+ different cryptocurrencies. Almost all coins are able to be sourced through the Swyftx order page.
Details:
Details:
- Fiat payment methods: To buy cryptocurrencies with New Zealand dollars on Swyftx, only bank transfers are permitted.
- Withdrawal fees: Minimum withdrawal of NZ$30 with a NZ$10 withdrawal fee.
- Trading fees: 0.6% platform fee on the value of the transaction. Swyftx states that it offers high volume discounts.
- Verification requirements: The steps from signup to trade are simple - first, users create an account (by entering their name and details). Then, Swyftx verifies your ID (via photo ID, phone number and email address) and, once done, asks for a deposit (made via bank transfer). Once the deposit has cleared, users can start trading.
- Limits: Daily deposit limit up to NZ$50,000, no trading limits.
- Markets available: Various
- More details: Visit Swyftx and/or read our Swyftx review.
Binance
According to average daily turnover, Binance is one of the largest crypto exchange platforms in the world. After launching in 2017, the company established itself globally and is constantly shrouded with more rumours of expansion in a short space of time. Among many other services, such as crypto fixed income products, derivative products, margin trading and more, Binance also offers New Zealanders a gateway to cryptocurrencies locally.
Details:
Details:
- Payment methods: Debit/credit card via third-party payment provider Simplex
- Fees: Card processing fees are 3.5% with a minimum fee of US$10. When withdrawing a cryptocurrency, for example to your private wallet, there is a withdrawal fee of 0.0005 BTC.
- Minimum order size: The minimum order size is the equivalent of US$30, which is approximately NZ$46
- Settlement: On an account
- Coins available: With a bank card, you can buy 18 different cryptocurrencies. On the exchange, there are hundreds of coins available to trade once you have an account funded with crypto
- Learn more: Binance
LocalBitcoins
LocalBitcoins is a well-known platform, but it only transacts Bitcoin. Since 2012, the website has allowed buyers and sellers to place listings and answer each other’s ads. As the name suggests, users can make deals locally, in their own currency, using local payment methods. Users negotiate directly, mutually agree on the price and payment method. LocalBitcoins acts as a middleman and escrow agent in the transaction, thus protecting buyers and sellers. Once a transaction is completed successfully, users leave feedback on their experience, thus helping other users in the future. The person who creates the listing on the website is responsible for covering the fees, which are 1% of the transaction’s value. There are several users based in New Zealand, accepting payments from BNZ, ASB, and Westpac accounts in New Zealand dollars.
Details:
Details:
- Payment methods: It depends on your agreement with the seller
- Fees: A fee of 1% is charged to the party which listed the ad on the platform, other fees might be priced into the offer from the seller
- Minimum order size: The seller sets the minimum order size
- Settlement: Private wallet
- Coins available: Bitcoin only
- Learn More: LocalBitcoins
Do you want to compare two popular cryptocurrency platforms? We suggest reading our Easy Crypto vs Swyftx comparison to help you make an informed decision.
Frequently Asked Questions
There is a lot of misinformation about crypto - our shortlist of common questions help you understand some of the finer details.
Is it safe to use online crypto wallets?
Like many things in life, it’s safe, until it isn’t. Online crypto wallets offer a lot of conveniences, but they come at a cost. When you keep your crypto in an online wallet, there is always a risk that the provider could be compromised. Cybercriminals are always looking for new ways to exploit cryptocurrency users and businesses.
The best way to keep your crypto safe is to use one of the popular hardware wallets that has been tried and tested. For example, when it comes to Bitcoin, the asset you want to protect is the private key, not the coins themselves. The private key is used for signing transactions and allows anyone who possesses it to transfer Bitcoins from the corresponding address. Our guide to wallets has more details.
The best way to keep your crypto safe is to use one of the popular hardware wallets that has been tried and tested. For example, when it comes to Bitcoin, the asset you want to protect is the private key, not the coins themselves. The private key is used for signing transactions and allows anyone who possesses it to transfer Bitcoins from the corresponding address. Our guide to wallets has more details.
Is it safe to keep crypto on an exchange?
Many exchanges allow you to keep your purchased cryptocurrencies in an account on their platform. The idea is to make it convenient for active users to buy and sell cryptocurrencies. Most exchanges encourage users to keep their coins in private wallets. It's well-known exchanges are the targets of aggressive and sophisticated attacks due to the large amounts of cryptocurrencies under their control.
If you’re planning on holding cryptocurrencies for the long term, you should make the necessary arrangements to keep your coins safe.
If you’re planning on holding cryptocurrencies for the long term, you should make the necessary arrangements to keep your coins safe.
Can I invest in Crypto via KiwiSaver?
Yes, a select few schemes offer the opportunity to do so. One scheme, Koura KiwiSaver, allows members to invest in their Carbon Neutral Crypto Currency Fund. This is a fund that invests exclusively in Bitcoin. It has a long-term buy-and-hold strategy for investing. Please be aware that cryptocurrencies are highly volatile, and while KiwiSaver is a long-term investment, allocating money to crypto is not without risks. You can learn more about the fund here.
