A beginner's guide: How to buy Bitcoin and other cryptocurrencies in Singapore

Unless you have been living under a rock, there’s a high chance that you may have heard of a little cryptocurrency called Bitcoin (commonly abbreviated as BTC).

Especially after a filing with the US Securities and Exchange Commission (SEC) revealed that Tesla bought US$1.5 billion (S$2 billion) worth of Bitcoin, and announced that it expects to begin accepting bitcoins as a form of payment for its products in the near future.

Not to mention that Singapore’s biggest bank, DBS announced that it will set up a Digital Exchange that will allow investors to trade in cryptocurrencies.

You may have also been following the volatile virtual currency’s price movements and have done your extensive due diligence on it.

Now, you are ready to invest in Bitcoin or other cryptocurrencies that you may have researched.

But you might be wondering: where do you start?

As usual, we got you!

Although the whole investing process may seem a bit complicated for those who are new to Bitcoin and other cryptocurrencies, the whole process is actually not too complex if you break it down.

As such, here is our guide to buying Bitcoin and other cryptocurrencies in Singapore!

TL;DR: Beginner’s guide: How to buy Bitcoin in Singapore (and other cryptocurrencies too)

Before you buy Bitcoin and other cryptocurrencies

If you have stumbled upon this article and have next to no knowledge about cryptocurrencies, I would urge you to read our cryptocurrency for beginners’ article.

But here are some basic things you need to know.

First, you need to know that Bitcoin is numero uno when it comes to cryptocurrencies.

Bitcoin was the first cryptocurrency to be created and is the longest surviving one thus far.

Its longevity and popularity add to its security due to the nature of how blockchain works. I may be simplifying things a bit but in general, the more blocks a cryptocurrency has, the more secure its network.

This also adds to its trustworthiness.

As such, Bitcoin is in a category of its own as all other cryptocurrencies that are not Bitcoin are classified as altcoins (short for alternatives to Bitcoin).

Whereas for altcoins, the most popular one is Ethereum: A blockchain platform that allows users to build decentralized applications (dApps) and smart contracts on top of it.

I am just barely scratching the surface as there is so much more to learn.

As such, you need to really do your due diligence and fully understand the risks of investing in cryptocurrencies first before diving into it.

After all, your investment portfolio should be a reflection of your well-researched convictions and the amount of risk that you are willing to take.

The worse thing you can do is to blindly copy someone else’s portfolio and end up losing money without even knowing why.

A good place to start would be to develop an appreciation of the underlying technological innovation behind cryptocurrencies and a good understanding of the long-term risk and reward ratio of this asset class.

Monetary Authority of Singapore (MAS) regulation of cryptocurrencies

An important thing to note is that as cryptocurrencies are a relatively new phenomena, there isn’t as much regulation in Singapore just yet.

But here are a few key points you need to take note of:

• The Monetary Authority of Singapore (MAS) does not recognise cryptocurrencies as legal tender (i.e. cannot be used to make payment in Singapore). Cryptocurrencies are not regulated as well.
• The Payment Services Act (PS Act) is a key piece of legislation for the regulation of cryptocurrency in Singapore.
• Only DBS and the Australian cryptocurrency exchange Independent Reserve have gotten in-principle approval for a license to provide cryptocurrency services in Singapore.
• Businesses and individuals will not have to pay capital gains tax on their cryptocurrency holdings in Singapore.
• Businesses will also not pay GST if they provide a service for the exchanging of digital payment tokens (DPTs) for fiat currency or other DPTs services OR provide loans of DPTs.
• People who mine cryptocurrency as a hobby will not be taxed on their profits from mining. But, commercial cryptocurrency mining will be taxed.
• There are holding and annual spend limits of $5,000 and $30,000 for e‑money stored or transferred in and out of personal e-wallets when converting crypto to fiat money.

As for the PS Act, you should know that the act is mainly targeted at addressing money laundering and terrorism financing. This means that there is currently little to no legislative protection for consumers.

This is made clear with this advisory that MAS requires DPT service providers to show to customers:

• Your DPT service provider is licensed by MAS to provide DPT services. Please note that this does not mean you will be able to recover all the money or DPTs you paid to your DPT service provider if your DPT service provider’s business fails.
• You should not transact in the DPT if you are not familiar with this DPT. Transacting in DPTs may not be suitable for you if you are not familiar with the technology that DPT services are provided.
• You should be aware that the value of DPTs may fluctuate greatly. You should buy DPTs only if you are prepared to accept the risk of losing all of the money you put into such tokens.

Thus, your dealings with cryptocurrency are done at your own risk.

That’s the short version.

Do check out our guide to cryptocurrency regulation in Singapore if you want to learn more.

What do you need to start buying cryptocurrency?

At the very least, there are a few things that you need to start investing in cryptocurrency:

• Personal identification documents for verification (some exchanges like Coinhako use Singpass MyInfo)
• A Xfers Account to withdraw your money into your bank account for some platforms
• Secure connection to the internet (public WiFi is a no-go)
• Phone for two-factor authentication
• Cryptocurrency exchange account
• Valid methods to deposit or withdraw fiat money from the exchanges (bank accounts, debit cards , credit cards, etc.
• Secured personal cryptocurrency wallet to store your crypto (this is optional but recommended)

Speaking of cryptocurrency wallets there are two main types of crypto wallets you need to know.

Hot Wallets

First, we have Hot Wallets: Cryptocurrency wallets operated from devices that connect to the internet.

Although Bitcoin itself is almost impossible to hack, hackers can still steal the private key to your hot wallet and steal the coins stored on your crypto wallet that is connected to the internet.

But, what you give up in security you gain in convenience as you can trade your cryptocurrencies easily.

An example of a hot wallet is the exchange wallet that is given to you when you open your cryptocurrency exchange account. This is basically a custodian account for your cryptocurrency where the exchange holds the private keys to your coins.

Be careful about this as if in the event that the exchange is hacked, you might lose your cryptocurrency.

This is why in the cryptocurrency world, the phrase ‘not your key not your coin’ is wisdom many adhere to.

As without the private keys, you technically do not own the bitcoin.

Cold wallets

Alternatively, you can store your cryptocurrencies in a cold wallet.

Put simply, the cold wallet/offline wallet/hardware wallet is a cryptocurrency wallet that stores your cryptocurrency offline

These cold wallets store your private key on hardware that is offline. Some even come with compatible software that allows you to view your crypto portfolio without exposing your private key.

There are two main types of hardware wallets that come with their advantages and disadvantages.

You have your paper wallet which can be created and printed out from some websites.

During the creation of the paper wallet, you have both public keys and private keys that are printed out.

Some people keep their private keys in a highly secured place and only import the private key into the wallet only at the moment of making a transaction.

This method is more secure, but the downside is that it is very inconvenient to trade your cryptocurrency with this paper wallet.

Another type of cold wallet that is more popular is the cryptocurrency hardware wallet:

This hardware wallet can store your private keys safely offline. Some also come with security features that protect the device from malware and viruses.

There is a saying in the world of cryptocurrencies:

‘Not your keys, not your coin.’

Whenever you log into your prefered cryptocurrency exchange, it may appear that you are the owner of the cryptocurrencies as you can log in to gain access to them.

But, the reality is, you do not actually have total control of your cryptocurrencies.

You will know this when the exchange is hacked and unfortunately, this has happened quite a bit. According to a report from Atlas VPN, about US$3.78 billion was stolen in Blockchain hacks in 2020.

Also, there have been instances where owners of the Cryptocurrency exchange run away with the investors’ funds.

For example, Faruk Fatih Ozer, the founder of Turkish Cryptocurrency Thodex, disappeared with about US$2 billion of its investors’ funds in April this year.

This situation extends to basically any cryptocurrency wallet provider that does not allow you to hold the private keys to the cryptocurrency wallet.

Decentralised Finance (DeFi) projects are also not exempt from this.

In short, you technically do not own your cryptocurrencies if you do not hold the keys to them.

Thus, we would recommend that you store your long term or sizeable cryptocurrency holdings on a cold wallet for safety.

Now let’s move on to the cryptocurrency exchanges!

Cryptocurrency exchanges

Here is an overview of the more reputable cryptocurrency exchanges .

We have three main criteria for picking the exchanges for this comparison.

First, these exchanges should allow you to purchase Bitcoin (BTC) and Ethereum (ETH) in Singapore Dollars.

Second, the exchanges on this list are amongst the largest and most reputable cryptocurrency exchanges in the world.

For example, according to CoinMarketCap, Binance, Huobi Global and Coinbase are three of the biggest cryptocurrency spot exchanges in the world

FYI: CoinMarketCap ranks and scores exchanges based on traffic, liquidity, trading volumes, and confidence in the legitimacy of trading volumes reported).

Also, we have included some of the more safe and reputable exchanges like Coinhako, Crypto.com and Gemini that have a local presence with offices in Singapore.

Binance with their international exchange and Singapore exchange ticks both boxes.

Cryptocurrency Exchange	Trading Fees (Per Trade)	Pro Account Trading Fees	Supported Cryptocurrenices	Deposit Fees (Fiat)	Withdrawal Fees (Fiat)	Can Buy BTC & ETH With SGD?
Binance International (Binance.com)	0.1 per cent (Basic tier)	-	500+ (BTC, ETH, XRP, LTC, BCH, EOS, XMR, TRX, XLM, NEO & more)	SWIFT transfer (Varies based on bank) Credit/Debit Card: 3.5 per cent per transaction or U$10 (higher) P2P:Free (Exchange rate may not be as good)	SWIFT transfer (US$30 + bank fee) P2P: Free (Exchange rate may not be as good)	Not officially (Can buy using P2P exchange)
Huobi Global	0.2 per cent (Flat)	-	372 (BTC, BCH, ETH, XRP, LTC, DOT, DASH, ETC, EOS, QTUM & more)	SWIFT transfer (Varies based on bank)		Yes
Crypto.com	0.4 per cent (Basic tier)	-	100+ (BTC, LTC, ETH, CRO, ENJ, BAT, PAX, USDC, OMG, KNC & more)	Deposit with Xfers is free Credit/Debit Card: 3.50 per cent + $0.10	Withdrawal with Xfers is free	Yes
Binance Singapore (Binance.sg)	0.6 per cent (Flat)	-	8 (BTC, ETH, BNB, LTC, BCH, XRP, NEO, LINK)	Deposit with Xfers is free	Withdrawal with Xfers is free	Yes
Coinhako	1 per cent (Flat)	-	21 (BTC, ETH, XRP, BCH, LTC, ADA, XLM, NEO, XMR, DOT & more)	FAST transfer of SGD: Free SGD Deposits via Xfers Direct Charge: 0.55 per cent USD Deposits in form of USDT/USDT: Free	FAST transfer: S$2 USD Withdrawals in form of USDT/USDT: US$15	Yes
Gemini	1.49 per cent+ (Flat with minimum sum for trades less than US$200)	Active Trader: 0.35per cent (Basic tier)	48 (BTC, ETH, BCH, LTC, ZEC, ZRX, MKR, BAT, AAVE, FIL & more)	FAST transfer is free		Yes
Coinbase Exchange	1.49 per cent+ (Flat with minimum sum for trades less than US$200)	Coinbase Pro: 0.5per cent (Basic tier)	65 (ATOM, BAT, BTC, BCH, XRP, DAI, DASH, EOS, ETH, ETC & more)	SWIFT transfer (US$25 + bank fees) Credit/Debit Card: 3.99 per cent + 7 per cent of transaction fee (GST)	SWIFT transfer (US$25 + bank fees)	Yes

Alternative methods for buying cryptocurrency

Buying cryptocurrencies on exchanges is not the only way to trade cryptocurrencies. Here are two alternative methods.

Cryptocurrency ATMs in Singapore (Bitcoin ATMs in Singapore)

You can head to the cryptocurrency ATMs around Singapore to buy and sell cryptocurrencies directly and instantly with cash.

The buying process is as such: you deposit fiat currency (e.g. SGD) and withdraw cryptocurrency to your secure digital wallet.

Whereas the selling process is reversed.

This transaction method is convenient as you can skip any sign-ups or variation processes.

You only need a safe and secure digital wallet to withdraw the cryptocurrency to.

However, convenience does not come cheap as according to Coin ATM Radar, these ATMs charge between a whopping 4.1 per cent – 6.9 per cent for cryptocurrency transactions and have minimum transaction fees that start from $10.

These fees are generally higher than buying cryptocurrencies on crypto exchanges like Coinbase.

Thus, if possible, you should sign up for a cryptocurrency exchange account to avoid these high fees.

Crypto ATMs location

According to Coin ATM Radar, Singapore currently has 10 different automated teller machines (ATM) and one teller where you trade cryptocurrencies in Singapore.

Here is the full list:

Peer to Peer (P2P) cryptocurrency exchanges

Alternatively, you can consider P2P cryptocurrency exchanges like Binance P2P.

Think of it like Carousell but for cryptocurrencies.

After you create an account on such a platform, you can post advertisements to sell your cryptocurrency and provide details about the price and how to pay.

Like Carousell, you can browse through listings to buy cryptocurrency.

You can then choose who you want to trade with.

Can’t get enough of cryptocurrencies?

Fret not!

We are incredibly excited to be launching a campaign to help more people living in Singapore own a piece of the future with cryptocurrencies! #OwnTheFuture.

You won’t want to miss out on what we have in store:

To be eligible for this cryptocurrency campaign, you will have to simply join the waitlist from now till Tuesday (Aug 31, 2021), 11.59pm.

What are you waiting for?

Join The Waitlist Now!

This article was first published in Seedly. All content is displayed for general information purposes only and does not constitute professional financial advice.