Australians are more likely to secure their retirement by holding cryptocurrency

By Jesse Coghlan, Cointelegraph, compiled by Song Xue, Golden Finance

Australians are increasingly looking to crypto to secure a great retirement,** with self-managed superannuation funds increasing their asset class allocation by 400% in just four years, outpacing stocks and bonds. **

Statistics released by the Australian Taxation Office (ATO) on 26 November showed that nearly 612,000 self-managed super funds (SMSFs) held a total of US$658.6 million (A$992 million) worth of cryptocurrencies in the quarter ending September.

The latest figures are up 400% on the same quarter in 2019 and close just under US$131.5 million (A$198 million).

In Australia, self-managed superannuation funds (also known as private superannuation funds) allow individuals to control how their superannuation funds are invested. Retirement schemes are regulated by the Australian Taxation Office, and SMSFs are still subject to superannuation laws.

Danny Talwar, head of tax at crypto tax provider Koinly, said this has made cryptocurrencies “the largest growing asset class in SMSFs.”

In contrast, listed stocks – the largest allocation category for SMSFs at the end of last quarter – grew 28% over the same period. Allocations to debt securities, such as bonds, have fallen by 5.8% over the past four years.

However, the total SMSF allocation to cryptocurrencies was slightly down 0.8% from the quarter ending June 2023 and down 2.4% from the previous year. **

The amount of cryptocurrency allocated quarterly for all SMSFs since September 2019. Source: ATO

Despite the increase in recent years, the amount of crypto held in self-managed funds is now down 38% from the all-time high of almost US$1.06 billion (A$1.6 billion) during the last crypto bull market for the quarter ending in June 2021.

Talwar also highlighted that**as of the end of last quarter, cryptocurrencies accounted for only 0.1% of the total net assets held by SMSFs in Australia. He also noted that small SMSFs tend to allocate more cryptocurrencies to their portfolios. **

Talwar said he is seeing “increasing” holdings of crypto in super funds, while local crypto exchanges offering crypto superannuation products are “growing”.

“People want to hold cryptocurrency. You can hold crypto in a super account, but there are some stricter rules,” he warned.

"Your SMSF strategy must allow you to hold cryptocurrency. Its sole purpose must be to provide you with retirement benefits. You’ll need to review everything. You need to separate the assets held by the SMSF from those held by the individual. The line between the two cannot be blurred. ”

The specific cryptocurrencies held by SMSFs and the resulting gains or losses are unclear as the ATO does not provide information on portfolio holdings or performance.

Source: Golden Finance