How does one buy cryptocurrency in New Zealand? Is investing in cryptocurrency legal?

Summary

• Cryptocurrency is a digital currency, which allows to send and receive payments to anyone and does not rely on any central authority to verify transactions.
• Bitcoin, Ethereum, XRO are some of the most popular cryptocurrencies.
• Cryptocurrencies can be bought through a broker/crypto exchange if an individual wants to buy it in the open market.
• Investing in cryptocurrencies is legal in some countries, some are in the process of regulating it, and some have banned it.

A cryptocurrency is a digital money that may be used to purchase goods and services, but it is secured by an online ledger and powerful encryption. It is a peer-to-peer system, which can allow any person to send and receive payments through a distributed network.

They are supposedly resilient to government intervention or manipulation because they are unregulated and not authorised by any central body.

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People utilise cryptocurrencies for a variety of reasons, including speedy payments, avoiding transaction fees charged by traditional institutions, and also because it offers some privacy. Others invest in cryptocurrencies hoping that their value will increase with time.

How does cryptocurrency work?

Cryptocurrency is a digital, decentralised and encrypted medium of exchange with no central body to manage its value. Instead, they operate across a network of computers.

A ledger is maintained by a network of individuals and their computers. Any exchange must be verified by everyone in the network. Following that, the ledger is adjusted to reflect the transaction. This technology is called as blockchain.

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Crypto exchanges are used to buy and sell cryptocurrencies, which are then kept in wallets.

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When a person wishes to transfer cryptocurrency units to some other user, they do so by using the latter's digital wallet. The transaction isn't deemed complete until it's confirmed and added to blockchain, which is done through a process known as mining. New cryptocurrency tokens are generally produced in this manner.

What are the popular cryptocurrencies?

There are over 10K cryptocurrencies trading publicly. Bitcoin remains the most popular and the most valuable cryptocurrency followed by Ethereum, XRP, Tether and many others.

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Bitcoin and Ethereum have a past history of holding and rising in value over time, despite recent market volatility, but lesser-known cryptos are seen as considerably more volatile and uncertain.

Some of the other popular cryptocurrencies are XMR, Monero, Dogecoin, and IOTA, etc.

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How can you buy cryptocurrency in NZ?

In New Zealand, the most frequent methods of purchasing cryptocurrencies are through exchanges or brokers, sometimes known as retailers/merchants.

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A broker will often specialise in buying and selling cryptocurrencies for fiat currency, such as the New Zealand dollar or the United States dollar. They usually enable an individual to buy cryptocurrencies with a local bank transfer or a debit or credit card. Most people consider this to be the most convenient method of purchasing Bitcoin.

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However, an exchange will provide a more active and vibrant trading experience with charts, order books, and a wide choice of trading pairs. An exchange trading platform could be a good fit if an individual wants to actively bet on the cryptocurrency market.

Here are some of the steps that can be followed to buy a cryptocurrency in New Zealand.

1. Choose a cryptocurrency you want to invest in

There are several cryptocurrencies that can be chosen for investment. An investor must choose a cryptocurrency that provides him/her with the desired features and benefits.

Bitcoin and Ethereum can prove to be a good choice to start from the perspective of portfolio diversification.

2. Pick an online wallet

Online wallets are required to store digital assets, like cryptos, more securely and are in the form of a computer program.

Wallets have different features like swapping option, holding coins, etc., and can be chosen as per his/her need.

3. Conduct thorough research while choosing a crypto exchange and look for benefits like low fees, customer support services, etc.
4. The best approach to buy cryptocurrency and services is to exchange actual money. For first-time buyers, an individual must verify his/her identity and once the verification is approved, payment can be deposited through credit cards, or transfers.

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Which are the popular exchanges to buy crypto in NZ?

Crypto.com, SwyftX, Independent Reserve, Coinmama are some of the popular crypto exchanges in New Zealand to buy cryptocurrencies.

Is investing in crypto legal?

Bitcoin and other cryptocurrencies have given out above-normal returns in the previous year, making them more attractive to investors. However, the digital currency stays restricted in many countries as they are considered risky and volatile.

Most governments have yet to make a firm decision on the legality of cryptocurrencies, opting instead for a wait-and-watch attitude. By implementing some regulatory supervision, several nations have indirectly agreed to the lawful usage of Bitcoin.

The UK, Singapore, Switzerland, Germany, Australia, and Canada are some of the countries that have regulated cryptocurrency. While some states in the US have regulated cryptocurrency, other are considering regulation. China, Bangladesh, Qatar, and Ecuador are some of the countries that have banned cryptocurrency.