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Crypto chosen over defensive assets

Investment in cryptocurrencies among investors has surpassed defensive assets such as precious metals, fixed income and annuities, according to new research.

Digital asset exchange BTC Markets latest survey of over 2000 investors revealed 12.6% of respondents have investments in cryptocurrency followed by precious metals (12.1%), fixed income (9.9%) and annuities (7.7%).

BTC Markets chief executive Caroline Bowler said the interest in investors aged over 60 years old has doubled and accounts for around 10% of its client base.

"Australian investors also followed international trends. We noted a five-fold increase in SMSF clients in 2020 and growing interest from corporate accounts," Bowler said.

Over 83% of investors hold Bitcoin, followed by Ethereum (42.6%), Litecoin (18%) and one in five hold other cryptocurrencies that were not listed.

Of Bitcoin investors, a quarter hold it for three to six months while 25.8% hold the asset for one to three years and 23% hold it for more than three years.

However, more than half of individual investors are not looking to sell their Bitcoin investments following the recent price rally.

"High-net-worth investors and family offices are making large-scale investments of over 1000 Bitcoin and holding it in their individual wallets," Bowler said.

This has led to 77% of available Bitcoin being inactive on exchanges and drives the price further as demand increases.

Despite this, 80% of Australians do not plan on investing in Bitcoin with one in three not believing it is a legitimate asset class, 30% believe it is too volatile or expensive, and 20% lack the knowledge and understanding.

"Cryptocurrencies like Bitcoin are now mainstream in the US, UK, Hong Kong and Singapore as a result of a more innovative and progressive regulatory framework in those countries," she said.

"The rest of the world has made great strides in recognising Bitcoin's importance as an investment and Australia is not far behind. It's only a matter of time."

Read more: BitcoinCryptoBTC MarketsCaroline Bowler
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