Recent data from New Zealand-based exchange Easy Crypto has revealed that Australian investors are surpassing their global counterparts in cryptocurrency ownership, with one in five adults either currently or previously owning crypto.
Compared to the estimated global crypto adoption rate of just 6.8 per cent, this puts Australia firmly in the “early adopter” category of the crypto adoption spectrum, according to the exchange.
While crypto uptake has been on the rise for both retail and institutional investors, market experts argue that Australia’s preference for traditional investments like residential property and bonds continue to pose a barrier.
Benjamin Celermajer, director at Magnet Capital, argues that many local investors still have a more conservative approach.
“There’s a bias in this country to property, bonds, property yields, and equities … I think that’s very hard to break,” Celermajer told InvestorDaily.
“Australia hasn’t had a recession in decades, and so I think we’re in this position where people have been very comfortable allocating the way that they have historically, because it’s worked for such a long duration, and that creates comfort in the system.”
In contrast, the US has faced residential property declines and increased political volatility, pushing investors to diversify their portfolios more actively in response, according to Celermajer.
“I don’t think that’s necessarily been the case in Australia,” he said.
“Investors here are not overly attentive to the opportunity that cryptocurrencies possess.”
Global X investment strategist Marc Jocum concurred, pointing out that Australian investors continue to tread carefully around the emerging asset class.
This perception, he said, is particularly strong among the country’s retirees, who may hesitate to gain exposure to an asset class that doesn’t pay an income or exhibit the defensive characteristics of assets like gold or bonds.
“But for the younger demographic, and even when we see things like institutions coming into the market, we start to see more institutions looking at bitcoin overseas than in Australia. It could just be a matter of time,” Jocum said in a conversation with InvestorDaily.
“I still think that Australians are waiting, watching to see what could happen. That being said, there still is strong growing adoption, and I expect that to continue over the foreseeable future.”
Jocum added that while there is evidence that supports bitcoin within a portfolio being able to improve risk-adjusted returns, local investors are conscious of its capacity to “whipsaw” to the other side.
“For a lot of conservative investors, they don’t like seeing a large level of volatility within their portfolio, which is why they tend to go to traditional time-tested asset classes.”
