Crypto a ‘gateway’ asset for Aussie investors, and most want financial advice

According to the latest CoreData report, more than one in 10 (12 per cent) Australian adults now hold cryptocurrency in some capacity, making it the third most popular investment among Australians, beat only by cash (19 per cent) and Australian stocks and shares (21 per cent).

Interest in the asset is proving particularly strong among first-time investors, with a quarter (24 per cent) of current cryptocurrency holders stating it was their first ever investment, acting as something of a “gateway asset” for those new to market trading.

The growing interest in the asset class could also prove beneficial for advisers, with a third (32 per cent) of cryptocurrency holders working with an adviser on either an ongoing or occasional basis.

Furthermore, among cryptocurrency investors who have worked with an adviser, nine in 10 (88 per cent) expressed interest in accessing cryptocurrency-related advice if it were available.

Namely, more than half of those holding cryptocurrency are seeking advice on tax strategy and regulatory compliance (59 per cent), portfolio allocation and diversification (55 per cent), and yield generation and passive income strategies (50 per cent).

Existing advice clients are also showing proactive interest in cryptocurrency. Two-thirds (67 per cent) of clients who already hold cryptocurrency have raised the discussion with their adviser first.

However, in order to meet this growing demand, approved product lists (APL) will need to evolve, as just 11 per cent of advisers report having access to cryptocurrency or cryptocurrency exchange-traded funds on their APL, while three-quarters (74 per cent) of advisers don’t have it on their APL and don’t provide any advice related to the asset class.

Despite the strong demand for the asset class, advisers seem somewhat mixed in their support on a personal level, with six in 10 (58 per cent) saying they have never invested in cryptocurrency and don’t plan to, while just one in five (21 per cent) are currently invested in the digital asset.

The reluctance may be due in part to lingering concerns about the digital asset, with investors most concerned about security and fraud (59 per cent) and volatility and perceived market risks (52 per cent).

Meanwhile, almost half (48 per cent) were worried about the regulatory uncertainty surrounding cryptocurrency as local and international laws struggle to catch up with evolving markets.