Cryptocurrency outshines gold and silver for Australian investors

CEO of BTC Markets · 22 March 2021
Independent research commissioned by Australian cryptocurrency and digital assets exchange BTC Markets has revealed that more Australians now invest in cryptocurrencies, like Bitcoin, than precious metals like gold and silver.

The survey of more than 2,000 Australian investors over the month of February 2021 found that while 12.1% hold investments in precious metals, 12.6% have investments in Bitcoin or other cryptocurrencies.

Direct shares are the most popular investment (63.6%), followed by managed funds/ETFs (28.8%), investment property (25.8%), cash (25.6%) and collectibles (18.8%). Fixed income (9.9%) and annuities (7.7%) are the least held investments.

The research also revealed that over 63% of cryptocurrency investors are male, and one in four (25%) are high-income earners (i.e. over $100,000 a year). The largest cohort of crypto investors fall within the age group of 25-34 years (36.3%), followed by 35-44 years (30.1%).

Commenting on the findings, BTC Markets CEO Caroline Bowler said she is not surprised that more Australians now invest in cryptocurrency than fixed income, annuities, or commodities.

“Digital assets and cryptocurrencies are becoming increasingly popular among Australian investors of all ages.”

“In the last 12 months, we have seen a shift from 25-45-year-old males to a much broader age group, particularly early retirees who are interested in diversifying their investment portfolio and are catching up with this fastest-growing asset class.”

The survey found that one in three (33%) crypto investors made their first investment in Bitcoin or other cryptocurrencies after the stock market crash led by the COVID-19 pandemic in March 2020.

“At BTC Markets, we saw a 40% increase in client onboarding from the first to second half of 2020,” Ms Bowler said.

“The investor profile shifted alongside it. Popularity and interest among the 60-plus has doubled over the last couple of years, they now make up just under 10% of our client base of 300,000 investors.

“Australian investors also followed international trends. We noted a five-fold increase in SMSF clients in 2020 and growing interest from corporate accounts,” she added.

Australians hold on to their Bitcoin

Australia’s cryptocurrency investors overwhelmingly hold Bitcoin (83.2%), followed by Ethereum (42.6%), Ripple (28.5%), Litecoin (18%), and Bitcoin cash (12.1%). Close to one in five (19.9%) hold investments in ‘other’ cryptocurrencies not listed in the survey.

When it comes to how long they intend to hold their investment, Bitcoin investors are split almost evenly.

A quarter of Bitcoin investors normally hold the digital asset for three to six months, while 25.8% usually hold their investment for one to three years. Just under a quarter (23%) hold Bitcoin for more than three years and 17.6% hold it for six to 12 months. Only 8.6% of investors confirmed holding Bitcoin for less than a week.

“High-net-worth investors and family offices are making large-scale investments of over 1,000 Bitcoin and holding it in their individual wallets. As a result, 77% of available Bitcoin is not active on exchanges further driving the price as supply dries up against increasing demand,” Ms Bowler said.

Supporting this narrative, more than half (51%) of the individual investors surveyed also confirmed that despite the recent price rally, they are not looking to sell their investments in Bitcoin. Among the other half who are looking to sell and take profits, one in five said they would use that money to reinvest in Bitcoin or buy other cryptocurrencies.

Bitcoin naysayers on the sidelines

Despite Bitcoin’s recent performance, nearly 80% of Australians are still not planning on investing in cryptocurrencies. While one in three don’t consider it as a legitimate asset class, one in five said they lack knowledge and understanding, 30% also think it’s either too volatile or too expensive to buy, as they have missed the boat.

However, the some are open to changing their mind, citing the need for more regulation in the crypto industry as the number one catalyst, followed by a large financial institution investing in Bitcoin or advice from a professional such as a financial planner.

Among the remaining 20% of Australians who are looking to join the Bitcoin bandwagon, a majority are waiting for an entry point or correction in price.

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Tips for new investors in cryptocurrency

If you are considering investing in Bitcoin and other cryptocurrencies, here are a few tips:

  • This is a new asset class so it is definitely worth reading up on cryptocurrencies and learning as much as you can before you start
  • Dip your toe in gradually and start off with small trades while you get comfortable with the platform
  • Research the different cryptocurrencies and their uses e.g. Bitcoin is a store of value, Ethereum is considered a utility token, Ripple is used primarily for swift, low-cost cross-border payments
  • Crypto trading involves instant settlement vs. T+2 days in traditional markets that investors are used to. Organise your finances accordingly
  • Take your crypto offline into your personal wallets, but always remember your password!

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This content was reviewed by Content Producer Marissa Hayden as part of our fact-checking process.

Caroline Bowler is CEO of BTC Markets, the largest Australian digital asset exchange. Over her career, Caroline has worked with a variety of financial institutions including investment banks, hedge funds, financial technology companies, and financial advisors. This has extended to blockchain and dig

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