Young Aussies Embrace Cryptocurrency Despite Risk Aversion: ASX Survey

Young Australian Investors Prefer Stable Returns Despite Crypto Investment

Almost one third of young Australian investors have either owned or traded cryptocurrencies in the past year, even though they view themselves as more cautious than their older counterparts, according to a recent study.

In a survey conducted by the Australian Securities Exchange (ASX), 46% of “next generation investors” (defined as those aged 18 to 24) stated that they prefer “stable returns”; however, 31% of them still invested heavily in crypto.

“The financial prudence exhibited by younger investors appears to be in contradiction with their investment in cryptocurrency,” the report stated.

Researchers stated that the motivation behind younger people investing in crypto was a wish to separate themselves from their parents, as well as the fact that a large number of the 1.2 million new investors since 2020 are tech-literate and connected to social media.

Crypto Investment by Age Group

According to a study conducted by Investment Trends on behalf of ASX, the median cryptocurrency holding for “next generation” investors stands at $2,700, making up 6% of their total portfolio – twice the 3% crypto allocation for all other investor age groups.

Despite the fact that younger investors had the highest proportion of cryptocurrency in their portfolios, it was the “wealth accumulators” – those aged 25 to 49 – who held the majority of digital assets, making up 69% of the total investment. Investors aged 50 and above only accounted for 19% of cryptocurrency ownership.

This report was the first to include cryptocurrency as an asset class in the ASX’s Australian Investor Study. Consequently, the report approached the topic cautiously, noting that it is still being discussed as to whether cryptocurrencies can be fully embraced in traditional investing.

Despite its volatility, the study showed that cryptocurrency remains an attractive option for investors, with 29% of intending investors — those who do not currently invest in any form — intending to invest in some type of crypto within the next year.

Challenges Faced by Crypto Exchanges in Australia

Think tank warns that Australia’s crypto laws may be overtaken by those of emerging markets.

Centralized crypto exchanges were pointed out as a potential obstacle to the growth of crypto investment in the future.

The recent legal action taken by the United States Securities and Exchange Commission against Coinbase and Binance in the United States is a clear demonstration of the difficulties centralized exchanges are facing.

In May, Binance Australia declared that it would be discontinuing all Australian Dollar-related services in June due to its local payments provider being instructed to discontinue assistance for the exchange. Additionally, on the same day, Australia’s second biggest bank, Westpac, prohibited their customers from engaging in transactions with the exchange. These events have created difficulties for Australia’s crypto exchanges in recent months.

In the next month, Commonwealth Bank of Australia – the country’s biggest bank – declared that it might reject certain payments to cryptocurrency exchanges due to the “high risk” of fraud.

The ASX’s report was generated from an online survey of 5,519 Australian adults that was conducted in November 2022, with the findings being based on an in-depth analysis.

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