To buy his first Bitcoin, Luke Torsello sent money to four different places before it ended up as a token in the virtual environment Second Life, which allowed him to buy crypto from a "shady" exchange in Russia.
More than 10 years later, the process of buying Bitcoin is much more straightforward, he tells SBS News, although to many Australians, it seems as mystifying as ever.
The Sydney resident, who moderates the Facebook page Crypto Australia, believes the election of United States President Donald Trump could soon make buying cryptocurrencies even easier — and safer.
This is the dawning of a brand new era where clear, concise regulation will be brought in — which is all the community's ever asked for or wanted.
Trump was once hostile to the crypto industry but has since come to embrace it.
He appointed a new crypto-friendly official to head the US Securities and Exchange Commission (SEC), an agency that had previously led a crackdown on the sector.
Trump has also personally invested in crypto — he part-owns the exchange platform World Liberty Financial — and both he and First Lady Melania Trump released 'meme coins' ahead of his inauguration. (Meme coins are a type of cryptocurrency based on internet memes).
Last week, Trump confirmed the US would establish a Strategic Bitcoin Reserve as well as a Digital Asset Stockpile to retain certain cryptocurrencies already held by the government.
"I promised to make America the Bitcoin superpower of the world and crypto capital of the planet, and we're taking historic action to deliver on that promise," Trump said at the Digital Assets Summit held at the White House on 7 March.
US President Donald Trump (centre) speaks at the Digital Assets Summit held at the White House on 7 March 2025. Source: AAP / Chris Kleponis/EPA
He went on to say the reserve would be akin to a "virtual Fort Knox for digital gold to be housed within the US Treasury" and then criticised previous governments for selling Bitcoin that would now be worth billions.
But experts say the strategy behind the reserve is unclear.
Dr Aaron Lane, a legal expert on cryptocurrency and blockchain at RMIT says: "Other than signalling a pro-crypto disposition, it is not clear what the strategy behind a strategic crypto reserve would be."
Steven Pettigrove, leader of the blockchain team at law firm Piper Alderman, agrees and says it's unlikely Australia will follow by setting up its own reserve in the short term.
"Many governments are increasingly interacting with digital assets. Some view it as a strategic asset or inflation hedge, while others like Germany have sold down their reserves," he says.
SBS News contacted both the government and the Opposition to ask whether they plan to create a reserve in Australia. Luke Howarth, Opposition's spokesperson for financial services declined to comment, and Labor's minister did not respond.
While Trump's announcement disappointed some who hoped the US would buy additional Bitcoin to add to the government's existing stockpile — sending prices even higher — his pro-crypto stance could still accelerate regulation in Australia, where politicians have been looking at licensing and other related issues for years.
The rise of Bitcoin and other cryptocurrencies
Often derided as a scam with no intrinsic value, Bitcoin has become one of the best-performing financial assets of the past decade.
Following Trump's 2024 election, prices for Bitcoin rose to more than US$100,000 ($159,000) for the first time. It sent the value of 10,000 Bitcoin — the amount US programmer Laszlo Hanyecz used to buy two pizzas in 2010 — up to US$1 billion.
Prices have since fallen back below US$80,000 — along with some expectations — after Trump's disappointing reserve announcement and amid investor concerns around inflation in the US and the , trade and other issues.
Gold coins embossed with the symbol for popular cryptocurrencies Dogecoin, Bitcoin and Ethereum. Source: AAP / CFOTO/Sipa USA
But many still believe crypto's future looks brighter under Trump — and this is something that is important to an increasing number of people.
Lane says there's now a lot of money locked up in crypto ecosystems, and the debate around cryptocurrency has moved beyond discussions of its legitimacy.
Around 3.9 million Australians are estimated to own crypto, according to data analytics firm YouGov's online survey of 2,229 adults in July 2024 commissioned by Australian cryptocurrency broker Swyftx.
This represents around 20 per cent of the adult population.
"We're at the stage now where the ship has sailed," Lane says.
This is a popular thing; people are doing it.
Pettigrove agrees and says there's a growing sense — especially in the aftermath of Trump's election and regulations introduced by the European Parliament — that cryptocurrency has a place in the economy.
"It's now a question of trying to work out how that fits and how we can harness the benefits while mitigating some of the risks," he says.
Last year, the Australian Federal Police reported Australians had lost at least $180 million of crypto in investment scams in just 12 months, with victims more likely to be under the age of 50.
Bitcoin has also been criticised for enabling untraceable payments on the dark web, facilitating money laundering and allowing extortion through ransomware attacks.
Buying crypto means taking responsibility for your money
In its simplest form, Torsello says crypto is digital "money" that you control and don't need to store in a bank.
But if there's no bank, this means you are responsible for taking care of your own funds.
With self-custody comes great responsibility, and there's a million scammers out there trying to relieve you of your funds.
Even those who understand the risks can still get burned.
In recent years, major exchanges that buy and sell crypto — such as FTX — have closed, and people who kept their crypto on these platforms have lost their money.
Torsello recommends moving funds into a separate online wallet, but understanding how they work is important. He says many people have lost money after misplacing or giving criminals access to their 'seed phrase' — a series of words generated as a password.
The Australian Securities and Investments Commission (ASIC's) Moneysmart website points out that crypto assets were first created as a digital alternative to money, but it says crypto is not considered "legal tender" in Australia.
Crypto is not widely accepted as payment, although some businesses do accept it. There are also some ATMs that let you withdraw it as physical money.
Certain products like 'stablecoins' have been designed to be less volatile through being linked to the US dollar, for example, but other products like Bitcoin perform more like investments because they have no real value and prices fluctuate wildly.
Crypto is not widely accepted as payment in Australia but there are ATMs, such as this one operated by Coinhero in Hong Kong, where people can withdraw funds. Source: Getty / Leung Man Hei/Bloomberg
Instant millionaires and the lure of meme coins
Torsello, who says he has been a long-time investor in tech stocks such as Apple and Tesla, acknowledges the gambling aspect of investing in cryptocurrencies, describing his initial purchase of Bitcoin as "taking a punt".
But he says many people, lured by stories of instant millionaires, end up losing their life savings on crypto because they "want to get rich yesterday".
"When you invest, you shouldn't be putting more than 1 per cent of your net worth into any speculative investment," he says.
"You don't go all in — and especially [not on a meme coin called] JizzLord."
Meme coins are particularly volatile as they were essentially created as a joke and their value often relies on hype.
Trump's own meme coin $Trump quickly rose in value ahead of his inauguration before dropping dramatically. Investors who bought and sold at the wrong time are believed to have lost around US$2 billion ($3.1 billion).
Torsello says the community refers to the worst cryptocurrencies as "shit coins" and they are partly what give crypto a bad name, allowing authorities to argue against legitimising it because so many people get ripped off.
But crypto's volatility is also what makes it so enticing to some investors because they can also make a lot of money quickly, he says.
Crypto investor Luke Torsello says the community calls the worst cryptocurrencies "shit coins," which tarnish crypto's reputation and allow authorities to argue against its legitimisation. Source: Supplied
Last month, Argentine President Javier Milei was accused of fraud after posting a link to a site selling newly launched cryptocurrency $Libra, saying "the world wants to invest in Argentina" before deleting it. The crypto skyrocketed in value before its biggest investors withdrew their money and it crashed, causing people to lose an estimated US$250 million ($397 million).
Crypto is 'fuelling' the digital economy
Despite its volatility, there's hope of finding a better use for crypto, with increasing talk about real-world asset (RWA) tokenisation. This involves linking digital tokens to actual assets such as real estate, artwork or shares.
Torsello says RWA could be part of the "use case" that finally enables the technology behind cryptocurrencies to be used more widely.
He says digital tokens would also enable people to make investments using smaller amounts of money, such as paying $100 towards a token for an investment property rather than buying the entire home.
According to Torsello, one of the reasons people have embraced crypto is that it cuts out the middleman, as every transaction is recorded on what's called a 'blockchain' instead of being recorded and verified by organisations such as banks.
The blockchain uses cryptography to record transactions online securely without involvement from a central authority.
Lane says blockchain technology could one day be used to send information securely within health systems or to verify credentials such as university degrees.
People may one day even be able to store the title deeds to their houses on the blockchain.
"One thing that has been an issue in the privacy and data space is how do you collect and track and authenticate data," Lane explains.
With [crypto's] underlying blockchain technology, you can store, trace and track information securely, and you don't necessarily need that centralised, big third party.
The technology allows people to develop new products and services that haven't been possible before, which Lane says is "really fuelling the digital economy".
He points to video games now being built on top of crypto payment platforms.
Another feature of crypto systems is the ability to move funds across international borders quickly and cheaply.
Pettigrove says there's great potential for the system to reduce costs and increase efficiency in the economy.
"It's basically software, and the thing about software is it's infinitely adaptable — there's a lot you can do with it to automate processes and ideally gain cost efficiencies," he says.
Cryptocurrencies are often used in online games like Second Life. Source: Getty / Paul Chinn/The San Francisco Chronicle
Laws needed to regulate cryptocurrency
One of the reasons buying crypto is so risky is the lack of regulations protecting consumers, which cover other financial products.
"We don't have bespoke, targeted regulations in place that protect users in the same way that we would for financial products generally," Pettigrove says, adding there are no definitive court rulings in Australia on whether Bitcoin is a "financial product".
Only digital assets that meet the definition of a financial product are regulated by ASIC, so Pettigrove says most crypto exchanges aren't licensed. This makes it harder for consumers to know whether to trust them.
It's very difficult for consumers to distinguish between what is legitimate [and what is] a scam."
"ASIC will say licensing is not a badge of approval ... but it is a marker to help the consumer navigate this complex ecosystem."
The "regulatory grey zone" has made it difficult to protect consumers, and in recent years, agencies such as the SEC and ASIC have started pursuing legal action against some crypto companies, although critics say these actions often target companies trying to do the right thing.
The future of cryptocurrency in Australia
In Australia, ASIC wrapped up a three-month-long consultation process on 28 February aimed at providing guidance to the cryptocurrency industry on how existing laws impact them. It intends to publish updated advice in the middle of this year.
But Pettigrove says ASIC is not able to provide a complete solution.
"[ASIC won't] deal with a wide variety of cryptocurrencies and tokens that are in the market and it doesn't deal with a lot of compliance issues that arise from the unique attributes of cryptocurrencies and digital tokens," he says.
Both the Liberal and Labor parties in Australia have looked at new laws to regulate cryptocurrencies, but progress has been slow.
Financial Services Minister Stephen Jones announced in December that the government would release draft legislation for a "digital asset platform" and "payment stablecoin" reforms this year.
Financial Services Minister Stephen Jones said the government will release draft legislation covering cryptocurrency this year. Source: AAP / Mick Tsikas
The Liberal Party previously promised to develop a licensing framework ahead of the 2022 election but failed to get re-elected. It's something that Howarth says is still a priority.
"If we are fortunate enough to form government, the Coalition will work quickly to put in place fit-for-purpose regulation which keeps Australia up with the rest of the world and provides much needed regulatory certainty," he says.
Pettigrove cautions Australia risks falling behind other countries if it doesn't get its regulation right.
Two Australian-founded digital currency exchanges have already gained regulatory licences in Singapore and the United Kingdom, a 2021 Senate report into the sector noted.
"If we ignore cryptocurrency, Australia risks losing out on those opportunities," Pettigrove says.
"In this global economy, we need to continue to position ourselves well for that future."
But the bigger and more established crypto becomes, the larger the risk to the broader financial system. The New York Federal Reserve in 2024 noted the volatility of crypto could "destabilise" mainstream systems and create "systemic risk".
Whether policymakers are able to resolve these issues and make crypto safe enough for widespread adoption remains to be seen.
— Additional reporting by AFP
