How to Buy Cryptocurrencies in Austria - 2024 Beginner's Guide

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Cryptocurrencies have been around since Bitcoin’s release in 2009. However, it was not until 2017 that the sector caught the eyes of the masses, including Austrians. Since then, many businesses have been set up and modelled around cryptocurrencies.

Interestingly, many such businesses established their operations in Austria because of a positive and open attitude by the country’s Financial Market Authority. At the same time, many people developed an interest to buy cryptocurrency in Austria. If you are one of those interested in buying cryptocurrency in Austria, this guide should serve as a crucial resource.

Where to Buy Cryptocurrency in Austria in 2024?

As mentioned earlier, Austria is the most open jurisdiction regarding cryptocurrencies. For this reason, many crypto-focused businesses have set up shops in the country. However, many new buyers face the problem of selecting the best place to buy cryptocurrency, primarily because of inadequate knowledge of the platforms.

Usually, people want to buy crypto for two reasons: to hold and sell later, or to trade the price fluctuations. For the former, a cryptocurrency exchange is an ideal place to make a purchase. This is because the platform delivers actual tokens when the transaction is complete. Then, you can send the coins into a private wallet for holding. You can also use the coins to pay for transactions whenever acceptable.

For those interested in wagering on the price volatility, cryptocurrency brokers are the appropriate place to open an account. Cryptocurrency brokers create derivative products that track the price changes of the underlying assets.

Customers who use exchange platforms hold actual cryptocurrency tokens, which could be used to pay for products and services. Also, you could sell the assets in the future at a profit if the price increases. On the other hand, crypto derivatives enable traders to exploit the profit potential of volatility in the cryptocurrency market.

Our researchers analysed the Austrian cryptocurrency ecosystem, aiming to find the best exchange and broker platforms in the country. As a result, we have created a shortlist of the best broker and exchange platforms to buy cryptocurrency in Austria.

Step by Step Guide - How to Buy Cryptocurrency in Austria

Buying cryptocurrency is not easy when you are a newbie. However, we hope you will find the following procedure helpful.

Step 1: Find an Appropriate Platform to Buy Cryptocurrency

However, we would like to clarify from the onset that none of the platforms is ‘right’ or ‘wrong’ when it comes to buying cryptocurrency. This is because your personal needs determine what platform to choose.

Let’s say you want to experience the thrill of wagering on the price changes in the cryptocurrency market. In this case, it means you will have to trade cryptocurrency derivatives such as futures, options and CFDs. For derivatives, the appropriate platform is a broker.

But what if all you wish for is holding Bitcoin coins, perhaps to show off to friends, or to sell when the price increases? In this case, the appropriate platform is an exchange. The exchange platform offers clients access to buyers and sellers of their favourite tokens.

Moreover, ensure that the selected platform holds the relevant licenses. This is because the only way to ascertain that a given trading platform is legitimate is when it can demonstrate that it is regulated.

Step 2: Registration / Create a New Account

Having selected the ideal platform, the next step involves opening an account. At this point, we should mention that different trading platforms require different information when signing up new clients.

For example, some platforms require a username and email address, while others demand your full name and a mobile phone. Others go as far as asking for the region of residence.

After submitting the basic details, the platforms will take you through a process called know-your-customer or KYC. The KYC process requires ascertaining the validity of the information you provide. Specifically, the platform asks for documents that support the details you gave at the registration window. This includes a utility bill to prove the address, and a photo ID to prove the identity.

All licensed trading platforms are required by law to take new clients through the KYC process. Primarily, the process aims to prevent money launderers from exploiting the trading platforms.

Step 3: Deposit Funds

After activating the account, the next step is funding. This is especially critical if you opened an account with a broker platform. Because broker platforms merely link you to the cryptocurrency market, they need you to make a deposit that they will use to open positions in the market for you.

Each trading platform supports a variety of payment options, ranging from bank transfers to bank cards such as debit and credit cards. You are free to select a payment option that satisfies most of your needs. For instance, select credit cards if you wish to make an instant purchase of cryptocurrency.

Step 4: Start Trading or Buying Cryptocurrency

The funds will take some time to arrive in the account. Please, note that the arrival time depends on the payment method used. For example, transactions based on bank transfers take longer to deliver funds because of multiple security checks that banks undertake.

Once the funds arrive, you can open a position in the market if using a broker platform. This means accessing the trading platform and opening the desired cryptocurrency pair. Next, choose the order size and select whether to go long or short.

Likewise, go straight to the trading section of the exchange platform and select the coin you wish to buy. Also, choose the currency type that you will use to pay for the transaction. Once you are confident that everything is in order, complete the transaction by pressing the ‘BUY’ button.

However, there is one more crucial piece of information you need to know. Some trading platforms offer both cryptocurrency trading and buying services, whereby you can buy actual tokens as well as trade the price fluctuations. eToro is one example of a broker offering spot purchasing services, and Binance is an exchange that offers crypto derivatives trading services.

Step 5: Optional Steps

Once the crypto purchasing or trading process is complete, there are additional things you might want to do. They include:

If you bought cryptocurrency and you intend to sit on the coins for a long time, it is reasonable to transfer them into a private wallet for safe-keeping. Cold storage is ideal for the best security.
Derivatives traders might want to open additional orders to protect the market position. For example, you could open a derivatives trade to hedge the main position.

What is the Best Payment Method for Buying Cryptocurrency in Austria?

The payment method you select should be the one that ticks the most boxes. For example, does it deliver funds into the trading account faster? Is the transaction affordable and secure?

This means you are entirely responsible for selecting the best payment option. Thankfully, many trading options in Austria support numerous payment methods. For example, you can buy Bitcoin with PayPal, bank transfer, and credit cards.

Buy Cryptocurrency with Cash: A flexible and affordable option made possible by the more than 158 crypto ATMs in Austria.
Buy Cryptocurrency with Credit Card: Enables instant crypto purchases, although the fees are a bit higher.
Buy Cryptocurrency with Bank Transfer: Takes longer to deliver funds into the trading account but offers the most solid security.
Buy Cryptocurrency with PayPal: Supports transactions with multiple fiat currencies, and offers the best convenience. Available mostly on peer-to-peer platforms.
Buy Cryptocurrency with Bitcoin: Enables crypto purchases with the lowest transaction fees in the market.

Why Buy Cryptocurrency?

Cryptocurrency is a digital currency designed to offer an alternative payment method in global finance. Also, virtual assets come with many merits, such as support for anonymous transactions, enabling fast transaction speeds, and high-end security. However, digital currencies are not very popular worldwide, precisely because of too much volatility in the cryptocurrency market.

But a section of the global population finds cryptocurrencies interesting, especially since they obviate the need for banks. Also, people can transact straight from their hand-held devices. Hence, digital money comes with the convenience of the legacy financial system.

Being the fintech hotspot of Europe, it was inevitable that cryptocurrencies would become a big hit in Austria. According to Startup Heatmap Europe’s data, Vienna is one of the most desired and most trusted startup destinations in Europe. Interestingly, Vienna was able to achieve the status because of support from over 1,500 research institutes and more than 25,000 expats drawn from 90 countries.

For example, the cryptocurrency market’s ROI for 2021 year-to-date far outweighs the ATX’s – Austria’s biggest equities index. At the time of writing, ATX’s year-to-date Return On Investment was 19.38%, compared to 67% for the cryptocurrency market.

In addition to digital currencies’ excellent performance, there is a lot of positive support for the ecosystem in Austria. For example, authorities in the country have designed projects to promote Vienna as the ideal location for crypto-focused businesses.

The Financial Market Authority (FMA), Austria’s premier financial regulator, is involved in reviewing business models for crypto-focused entities. Also, the institution has gone to great lengths to avoid placing unnecessary obstacles on crypto startups.

Overall, Austria is a crypto-friendly jurisdiction. As such, there is a chance that cryptocurrency adoption will outpace many places in Europe. Ultimately, this makes for a strong proposition to invest in digital currencies today.

Is it Legal to Buy Cryptocurrency in Austria?

Austrian law does not prohibit cryptocurrencies, you can learn more about taxation and cryptocurrency in our Austria tax guide. However, all crypto startups must register with the FMA as long as they engage in cryptocurrencies for commercial purposes. Still, the businesses must adhere to the EU-wide 5th Anti-Money Laundering Directive that obligates crypto entities to help fight fraud.

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Where Can I Use Cryptocurrency in Austria?

There are 158 cryptocurrency ATMs in Austria, according to Coin ATM Radar. Most of the ATMs are found in Vienna but a substantial number can be found in Burg, Linz and Salzburg. This tells you that cryptocurrencies are popular in the country. Nonetheless, we could not establish any major brand that accepts cryptocurrencies.

Frequently Asked Questions

1. Do I pay tax on cryptocurrency in Austria?

The Austrian law does not categorise virtual assets as taxable unless used for the purposes of generating interest income. Also, the law imposes taxes on the proceeds of private cryptocurrency sales, as long as the virtual assets were acquired and sold within one calendar year.

2. Do I have to keep detailed records for every crypto purchase done in Austria?

Although documenting the crypto-related transactions is not necessary, we recommend that you do it to ensure a smooth estimation of your income for tax purposes. The absence of a detailed record will force tax authorities to make rough estimates, which might disadvantage your financial position.

3. Austria’s FMA warns that cryptocurrencies are risky assets. Should I be worried?

The FMA’s primary function is to regulate the country’s financial space and to ensure the well-being of all the stakeholders. According to the institution’s evaluation, the virtual assets are high risk, especially concerning market volatility. As such, you should be aware that your capital is at risk when buying into crypto. However, you can minimise the risks by conducting exhaustive due diligence, and hedging your position in the market.

4. Should I buy or trade cryptocurrency in Austria?

It depends on your investment strategy. Some prefer to buy crypto because they intend to hold on to the assets for the long-term, and wish to sell at a significant premium. On the other hand, some prefer the thrill of wagering on price changes in the cryptocurrency market.

5. What is the best place to store cryptocurrency coins after purchasing?

You can store crypto coins with the exchange or transfer them to a private wallet. However, the choice of the best option depends on how long you intend to hold onto the coins. For a long-term holding period, a private wallet is the appropriate storage place, while it is reasonable to let the coins stay with the exchange if you intend to participate in schemes such as staking.