As many as 22 per cent of Australians believe investing in cryptocurrencies could be the answer to saving for a mortgage deposit, with just as many admitting their interest in crypto peaked as the value of traditional savings declined, new research has revealed.
But, not only are Aussies looking at crypto as a way into the property market, some are even considering abandoning the cultural norm to explore other options to grow their wealth.
Research based on a survey by Kraken has revealed a decline in traditional investment options among young Aussies, with 39 per cent of Millennials revealing they have considered crypto as a good alternative to buying an investment property. This number is slightly lower among older Aussies, with 31 per cent of Gen Z and 24 per cent of Gen X showing the same enthusiasm.
According to Kraken’s managing director, Jonathon Miller, while Aussies do lag behind the US in terms of adoption, interest in crypto is increasing.
“Australians still maintain some conservative attitudes towards investment. Property has been a cultural norm and high on the wishlist for most investors, but as affordability continues to be an issue, we’re seeing more young people look for other options to grow wealth,” said Mr Miller.
“It’s these younger Australians who are changing the dynamic, and with more education, we expect the broader market to come around to the idea of investing in cryptocurrency.”
Kraken’s findings also revealed that reasons for shying away from crypto are varied, with 47 per cent of Baby Boomers steering clear because of the asset’s perceived volatility. As for those 18-35, 39 per cent said they don’t have the funds to invest, while 29 per cent said they didn’t know how.
As such, Mr Miller pointed to a need to educate Aussies and help them discover cryptocurrency.
“We’re confident that as more investors look to diversify their portfolios and seek investment opportunities outside of the traditional offerings, we’ll see cryptocurrency come into its own in APAC,” said Mr Miller.
Crypto’s rise in popularity has also garnered the attention of the Australian Taxation Office (ATO), which last month announced that it would be sending a letter to 300,000 taxpayers with cryptocurrency assets informing them of their tax obligations, with an additional 100,000 Aussies set to receive a notice to review their previously lodged returns.
The ATO said at the time that there is a misconception that cryptocurrency gains are tax-free or only taxable when the holdings are cashed back into Australian dollars.
“We are alarmed that some taxpayers think that the anonymity of cryptocurrencies provides a licence to ignore their tax obligations,” Assistant commissioner Tim Loh said.
“While it appears that cryptocurrency operates in an anonymous digital world, we closely track where it interacts with the real world through data from banks, financial institutions and cryptocurrency online exchanges to follow the money back to the taxpayer.”
Last year, the ATO directly contacted around 100,000 taxpayers who had traded in cryptocurrency and prompted 140,000 taxpayers at lodgement.
I am a younger Australian current starting in financial planning industry after finishing my degree and if someone can please tell me how you value any crypto other than saying ‘Elon’ or it ‘just goes up’ then I’ll listen. Education? Anyone educated knows its gambling. Where are the cashflows? No ratios? Financial Analysis? Future expectations or prospectus? Not even regulated. Like I tell mates you better off chucking it on red at the casino.
Do you see McDonalds accepting payment? No.
“It’s these younger Australians who are changing the dynamic, and with more education, we expect the broader market to come around to the idea of investing in cryptocurrency.” – [b]Don’t insult please[/b]
Bravo Young One. On a separate topic, would be interested to hear about your experiences finding a PY placement?
A lot of time of chasing up and going through linkedin. Email and following up a lot. Depends how bad you want it I think. No point playing the victim card just get on with it and I found something so I am happy with that. I know a lot are still having trouble but most are willing to take anything.
Andreas Antonopoulos is a world-renowned expert in Bitcoin and cryptocurrency. With a background in distributed systems engineering, he is well positioned to provide relevant and appropriate information about this new asset class. He is on all of the social media channels, and my suggestion is to watch some of his ‘Bitcoin basics’ videos on YouTube. He is able to break all of the concepts down so that anyone can understand; the sign of true knowledge on a subject. He is not and has not ever spruiked cryptocurrency as an investment (i.e. he is not just a typical ‘crypto shill’ trying to make a quick buck). His views are purely based on the technical nature of this asset.
Have a read of ‘The Bitcoin Standard’ by economics professor Saifedean Ammous (note – much of the book is about the history of the monetary system and why currencies collapse) and ‘Down The Rabbit Hole’ by Tim Lea.
There are some great podcast episodes where Andreas Antonopoulos is a guest as well (Joe Rogan’s podcast for one, as well as countless others).
If you are degree qualified, you clearly have some level of intellect. Once you really start to understand how this all works, it is unlikely you will put forth the same views as you have above.
I have found that many commenters here would just rather cryptocurrency ‘goes away’ so they don’t have to deal with it. Sadly for them, this is not going to happen. You can either learn about it, or pretend it doesn’t exist. Either way it will carry on without you.
How long before the online gambling companies start spruiking themselves as an “alternative asset class” and the “way for young people to grow their wealth”?
The cat is out of the bag. Cryptocurrency is not going to go anywhere. If you do any serious research on the subject, you will see the world-changing nature of this new asset class.
Of course some – probably many – people invest for the wrong reasons (if you want to convert back to fiat currency in the short-term, it’s an investment best left untouched). However if investing for the long-term in established cryptocurrencies such as Bitcoin and Ethereum, it’s hard to see a future where either of these two don’t exist.
I bought some Bitcoin around 5 years ago, and Ethereum about 3 years ago (as well as smaller amounts of other cryptocurrencies where I saw a potential use case in the future – have a look at Decentralised Finance or ‘DeFi’ for what will likely be a very high growth industry over the next 5 – 10 years). The only ones I would put money into is where I believe there will be usage in future. So far so good.
Buying Bitcoin or Ethereum – even today – is like investing in Amazon or Google in the early 2000s. It’ll take a while but it is likely they will grow significantly in value over the longer-term (I’m not talking about converting them back to fiat, I’m saying value in and of themselves.) Not only that, it’s more akin to being able to buy units in TCP/IP – the protocol which transmits data over the internet. Of course you cannot do this, but Bitcoin is looking like it will be a base layer for monetary transactions going into the future. Programmable money. Look into that in more detail if you will….
El Salvador just became the first country to accept Bitcoin as legal tender, and it is likely other countries will follow in due course. Adoption will happen, it’s just a matter of time. You have to be in it for the long-term, and anyone with a modicum of intelligence tends to realise how big cryptocurrency really is once they do some serious research into the subject.
Of course this nascent industry will be rife with scams and asset values will be volatile in fiat pricing (by the way, did anyone notice the US inflated their money supply by over 25% in 2020, with more to come? How is that likely to play out? Cantillon effect anyone?) The key is to take the time to understand what this is all about and position yourself accordingly. The future is looking bright for many cryptocurrencies – especially Bitcoin and Ethereum – and ignoring them now is done at your peril.
I suspect buying Bitcoin or Etherium today is more like buying Pets.com in the early 2000s.
I’m sorry, I don’t understand, and yes, I’m aware of the tech wreck.
Could you explain how pets.com compares with a decentralised, immutable, self-sovereign, permissionless, censorship-resistant means of worldwide value transfer? I can’t see the connection, other than ‘technology’.
Sounds like an online casino?
Sounds like you need to do a bit more research.
Of course Mr Miller says, “We’re confident that as more investors look to diversify their portfolios and seek investment opportunities outside of the traditional offerings, we’ll see cryptocurrency come into its own in APAC,” said Mr Miller.”
Just take a look at his linkedin profile as he is basically spruiking his product here “Managing Director of Kraken Australia. As one of the largest and oldest Bitcoin exchanges in the world,”
Seriously, the over compliance and high cost of financial advice are pushing people into these types of investments and other unregulated advice. I cant see how investing into such a volatile investment to save for a house deposit is what people should be doing.
You’re right, it’s a terrible investment if you want to cash out back into fiat in the short-term. This is very much a long-term play. Intergenerational even.
So you admit that it shouldn’t be used to save for a house deposit, where one swipe of volatility wipes out their investment.
Correct. People have to think further than their nose. We live in a world of instant gratification, and anything more than a 10-second video clip is too much for some people to take.
Lower your time preference and zoom out. Once you see the big picture, it’s hard to look back.