Crypto apps tend to show everything in US dollars, which is great if you live in America. But if you do not, and you are Australian, then this can make investing feel more confusing than it needs to be.
For instance, you might see your balance change and not be sure whether it’s down to the crypto price moving or the exchange rate shifting. Well, let us simplify it for you.
This guide will walk you through how to track crypto prices in AUD, so you always know what your investments are actually worth in Australian dollars. Hopefully, it will help you better keep track of how things are going.
Why is it Important for Australian Investors to Track Cryptocurrencies in AUD?
As mentioned, most cryptocurrencies are priced globally in US dollars. This means that when you search for the Bitcoin price AUD or the Ethereum price AUD, what you’re usually seeing is the US dollar value converted into Australian dollars.
The reason why this matters is that your portfolio is influenced by two separate entities:
- Crypto prices
- AUD/USD exchange rate
As a result, even if Bitcoin stays at the same USD price, your balance in Australian dollars can still move if the exchange rate changes. That’s why tracking crypto prices in AUD is necessary to give you a clearer picture of your real financial position.
Additionally, it also makes life easier when it comes to crypto tax reporting. Not least because, since you live, earn, and pay tax in Australian dollars, it makes sense to measure your investments the same way.
How Does Cryptocurrency Pricing Work?
For all the intricacies involved behind the scenes, cryptocurrency pricing comes down to something pretty simple. What people are willing to pay at any given moment.
There’s no central company setting the price of Bitcoin or Ethereum. Instead, prices move in response to supply and demand across global exchanges. When more people are buying than selling, the price usually rises. Conversely, when more people are selling, it tends to fall.
Prices are also influenced by a range of other factors, including:
- News
- Investor sentiment
- Regulation updates
- Overall market confidence
You should be aware that by default, almost every major digital asset is priced in USD first. Whether that be old or new crypto coins. Individual exchanges will convert it into other currencies, such as AUD.
As a guide, if Bitcoin is $50,000 USD and the exchange rate is 0.70, the Bitcoin price in AUD will be listed at around $71,400.
What is the Best Way to Track Crypto Prices in AUD?
If you want to track your crypto in Australian dollars, the good news is that it doesn’t need to be complicated. In fact, the best way to do this is to use a platform that already shows values in this currency. Not only will this save you from constantly converting USD prices in your head, but it will also give you a clearer picture of what your portfolio is actually worth.
For most Australians, using a local exchange is the simplest option available. That is because Australian-based platforms typically display buy and sell prices in AUD, which, in turn, makes tracking performance much easier.
For instance, you can quickly check the prices of assets like Bitcoin, Ethereum, and the current XRP price in AUD with Independent Reserve without needing a separate currency calculator.
Additionally, if you use multiple wallets or exchanges, consider a portfolio-tracking app that supports AUD. They can help combine everything into one dashboard.
At the end of the day, the key is consistency. So, settle upon one reliable method. Keep your records updated. And always focus on your investments in Australian dollars rather than switching between currencies.
How Can I Calculate Crypto Profit and Loss in AUD?
As an Aussie investor, you’ll naturally want to calculate your crypto profit and loss in AUD. Thankfully, this is pretty easy to do.
A good way to start is to note the amount you paid for the crypto in Australian dollars. This is your cost base and should include any trading fees.
Whenever you sell, make sure you record the total amount you receive in AUD after fees. Then subtract your original cost base from the sale amount. Whatever remains is your profit (or loss).
For example, if you bought $2,000 worth of Bitcoin and later sold it for $2,600, your profit is $600 in AUD. Recording every transaction in Australian dollars is a good way to keep the process clear.
How Do I Track Crypto in AUD for Tax Reporting in Australia?
In Australia, cryptocurrency is treated as property for tax purposes. That means capital gains tax can apply when you sell or trade your assets.
The ATO requires transactions to be reported in Australian dollars. So, if you only track USD values, you’ll need to convert every transaction using historical exchange rates later.
That can become very time-consuming, which is why tracking crypto prices in AUD from the very beginning will help to make the process much easier.
When crypto tax reporting in Australia, make sure you record the following:
- Purchase dates
- Sale dates
- AUD values at the time of each transaction
- Fees paid
What Common Mistakes Should Australians Avoid When Tracking Crypto?
When people first start investing in cryptocurrency, they understandably focus, at least initially, on price charts. But in doing so, they can sometimes forget about other important details.
One common mistake many new Aussie investors make is tracking everything in USD because they assume the numbers will translate neatly into AUD. Another is ignoring exchange rates, which can give you a skewed picture of your real profit.
Many investors forget to include trading fees in their calculations, which can give them a false reading of their actual returns. Poor record-keeping can also be another big issue. That is why you need to use a good system to report transactions. Otherwise, it can cause major stress later around tax time.
