The ASX’s Australian Investor Study 2023 report has revealed that 15% of investors in the country hold crypto.
Next-generation investors (individuals between ages 18 to 24), wealth accumulators (ages 25 to 49), new investors, and intending investors are the most interested in cryptocurrency investments.
Crypto still popular in Australia
Despite the increased regulatory scrutiny in the Australian crypto space partly brought about by Sam Bankman-Fried’s FTX scandal and an uptick in crypto-linked scam schemes in the region, new research findings show that digital asset investing remains quite popular among Aussie investors.
According to an online study of 5,519 Australian adults conducted by Investment Trends, a company focused on delivering actionable insights for the finance sector, on behalf of the Australian Securities Exchange (ASX), cryptocurrency is the third most popular financial instrument invested in by Aussies in the last 12 months, behind Australian shares and exchange-traded funds (ETFs).
In terms of investment decision-making, 42% of respondents stated that “potential return on investment” is their most crucial consideration when investing in a financial vehicle, 35% of respondents chose “potential risk of investment,” while 33% noted that the key factor they look at when investing is their “personal circumstances” at that moment.
Regarding risk appetite, the study found that 67% of Aussie investors prefer stable investments with guaranteed returns. In the same vein, 33% of respondents said they would accept moderate or higher variability investments that offer higher returns, while investors in the accumulation stage and pre-retirees signaled their openness toward higher risk for better returns.
“When asked how they’d respond to a market fall of 20%, only a small percentage of investors showed a tendency to ‘panic sell’ in the event of a strong market downturn. Among all investors, 40% said they would be concerned but would wait before taking action. Over 30% had accepted this as a risk, and 10% said they’d invest more to benefit from lower share or unit prices.”
The study also found that next-generation investors (those within the 18-24 age bracket) were most likely to dump their holdings and move to more secure investments or cash during a severe market dip.
The crypto numbers
Despite the prolonged crypto winter, which has triggered a more than 60% drop in the price of bitcoin (BTC), and other digital assets, 15% of the surveyed population said they currently hold crypto.
Of the 15% currently invested in cryptocurrencies, 9% said they purchased or sold the assets in the last 12 months. Despite their risk-averse nature, the study found that next-generation investors have a high affinity for crypto, with 31% of Aussie crypto investors falling under this category.
The study also found that more male investors hold crypto than females. About 20% of all male investors currently hold crypto compared to 11% of their female counterparts. Similarly, male investors also pumped more money into cryptocurrency-based investments (a median of $8,300) than females ($1,700).
Though many crypto investors across various age groups said they had traded crypto within the last 12 months, cryptocurrencies still represent only a tiny portion of investors’ overall portfolios.
Specifically, the median value of crypto investors’ cryptocurrency holdings is $5,500 (3% of portfolios). Investors under the wealth accumulators age segment (25 to 49) had the largest crypto portfolio allocations (7%), followed by next-generation investors (6%), with the former also accounting for the highest median ($7,200).
“19% of crypto investors invested less than $500, 29% between $500 and $5,000, and 10% had invested $100,000 or more. This distribution suggests that investors still have a certain level of caution regarding crypto.”
Despite the regulatory challenges and high-profile bankruptcies that have rocked the digital assets space in recent months, ASX’s latest research findings strongly indicate that the nascent crypto space is slowly but steadily emerging.
