How to Buy Bitcoin

Four Easy Steps

In four easy steps, you can be securely trading Bitcoin.

Create an Account

It doesn’t cost anything, and it only takes a moment.

Verify your Identity

We are legally required to verify your identity before you can trade. We will ask for some personal information, and then send you a security code in the mail. Once you’ve entered the code mailed to you, your account will be immediately ready to trade.

Deposit Funds

To buy Bitcoin, you need to first deposit funds into your account. For Australian customers we accept Electronic Funds Transfer. International customers may make a SWIFT transfer into our bank account. To sell Bitcoin, you may deposit Bitcoin into your Independent Reserve account.

Buy and Sell Bitcoin

Once your account is funded, you may then follow the prompts to buy and sell Bitcoin. When you’re finished, you may keep your money at Independent Reserve for safekeeping, or withdraw it to your own Bitcoin wallet or bank account.

Create an Account

It doesn’t cost anything, and it only takes a moment.

Verify your Identity

We are legally required to verify your identity before you can trade. We will ask for some personal information, and then send you a security code in the mail. Once you’ve entered the code mailed to you, your account will be immediately ready to trade.

Deposit Funds

To buy Bitcoin, you need to first deposit funds into your account. For Australian customers we accept Electronic Funds Transfer. International customers may make a SWIFT transfer into our bank account. To sell Bitcoin, you may deposit Bitcoin into your Independent Reserve account.

Buy and Sell Bitcoin

Once your account is funded, you may then follow the prompts to buy and sell Bitcoin. When you’re finished, you may keep your money at Independent Reserve for safekeeping, or withdraw it to your own Bitcoin wallet or bank account.

Step by step guide to trading

In this tutorial we will explain how to buy Bitcoin on Independent Reserve’s platform using your AUD fiat balance. We will assume you have deposited AUD currency into your account (via EFT, see Help), and you are ready to buy.

At a high level, there are two main ways to buy Bitcoin, they are:

  • Market order
  • Limit order

You should use a market order if you want to buy now and are happy for the price to potentially slide. You should use a limit order if you want to pay a specific price and are happy to wait for the market to reach that price. We will discuss each type.

Market order

When placing a market order you are simply telling the system to buy your volume of Bitcoin at the best price the order book has to offer. Note that to fill your order, the system may have to match your buy order against multiple order book sell orders, which could mean the price gets more and more expensive. This is purely reliant on the size of your order, and the depth of the order book (the volume of sell offers that exist at your price).

To place a Bitcoin market buy order:

  1. Ensure at the top left hand side of the screen you have selected XBT and AUD as your cryptocurrency and fiat currency.
  2. Go to the trade screen. The default trade type is BUY (MARKET), which is what we want.

  3. In the Volume field enter the amount of Bitcoin you wish to buy. You will see all the fields underneath (Estimated Value, Estimated Total Cost, etc) update automatically to give you an idea of what the cost of this purchase will be. Note: due to the volatile nature of the order book, there might be some small changes to price (up or down) that happen by the time you confirm your order. This is why we can only estimate the final cost. If your final price ends up being more than what you have in your AUD balance, the system will buy as much as it can until you run out of funds.

  4. Click the preview buy order button to see a final confirmation of your order, as well as some warning text. This warning describes what was discussed above: depending on the size of your order and the depth of the market, your final price may be more than you were expecting. Click the place buy order button to confirm your order.

Limit order

When placing a limit buy order, you are telling the system how much Bitcoin you wish to buy, and also the maximum price you are willing to pay (per Bitcoin – see Bitcoin price). This is a way to ensure that the price doesn’t slip like it can with a market order. However it does mean that the system will hold on to your order and only execute it when other sell orders appear on the order book at the price (or below) that you’re willing to pay. This means it is possible for the market to move up, and your order will never be filled.

To place a limit buy order:

  1. Ensure at the top left hand side of the screen you have selected XBT and AUD as your cryptocurrency and fiat currency.
  2. Go to the trade screen. The default trade type is BUY (MARKET). Change this to BUY (LIMIT).

  3. In the Volume field, enter the amount of Bitcoin you wish to buy. In the Bid Price field, enter the maximum you wish to spend per Bitcoin. Note: the bid price is not the maximum in total you wish to spend. It is the maximum you wish to spend PER Bitcoin. You will notice that the values underneath will automatically update as you enter your bid price. If your bid price is higher than the current market price, at least a part of your order will act as a market order, and the system will immediately place some trades buying you Bitcoin at or below your bid price. Usually you will place a limit buy order for less than the market rate as you hope for the price to drop. The Estimated Total Cost for a limit buy order will never be exceeded, but it’s possible if the market drops that you will spend less than the estimate.

  4. Click the preview buy order button to see a final confirmation, and click the place buy order button when you’re ready to place the order.
  5. At this point, assuming your bid price is less than the current best sell offer, your order will be entered onto the order book. You can see this in the Order Book pane, your order will be coloured blue. Note that the Volume may be different to the volume that you requested in the order. If the volume is lower than what you entered, this means your order has been partially filled. The market has since risen above your bid price, and the rest of your order is waiting to be filled when (if) the market drops again. If the volume is higher than your requested volume, this simply means that another Independent Reserve customer has placed a buy order with the same bid price as you. The system will combine these two (or more) orders for the sake of simplicity. Whoever placed the order first will have their order filled first.

  6. You will be emailed when (if) the market reaches your bid price and your order is filled or partially filled.

Stop price

You may notice an Advanced Options check box in the BUY (LIMIT) or SELL (LIMIT) screen. This enables you to set a stop price, sometimes called a stop loss order. What this essentially means is if the market starts running away (moving quickly up or down), you can direct the system to place an order for you when the market hits a certain level such that you don’t miss out.

For example, let’s say the market price for Bitcoin is at $10 000. You have a limit order on the order book to buy 2 Bitcoin at $9 900. You are hoping the market falls to this price so you can buy in. However, there is always the risk that the market will move upwards, and your $9 900 order will never be filled. To limit this exposure without you needing to constantly watch the Bitcoin price, you can create a stop loss order that essentially says “if the Bitcoin price gets to $10 500, then I want to immediately create a limit order that buys 2 Bitcoin at the price of $10 600 or lower”. Without this stop loss order, the price could potentially continue to rise up until $12 000 (for example), and by the time you notice this and want to buy, you’ll be paying much more. The stop loss order allows you to pre-empt this by setting your limit (for example $10 500). The system will then monitor the order book, and when the price hits your limit, it will activate your order to buy. In this example the bid price was $10 600. This creates a $100 price buffer (the order triggers at $10 500, but will actually buy up Bitcoin at any price below $10 600). If you have a buffer that’s too small, you run the risk that the market is moving so quickly that your order still doesn’t get placed. It’s feasible that there are already enough orders on the order book between $10 500 and $10 600 that your order never gets filled as others are filled first.

For the most part, we do not recommend the use of a stop price unless you have experience with this type of order. It is always advisable to test out the functionality with a small trade to ensure the system works as you expect it to.

If you have any further questions on trading, please open a ticket via our support system.