Cointree CEO Shane Stevenson said there’s no doubt that bitcoin is now being seen as an alternative to gold as a store of value, reflected recently by the rising price of bitcoin — currently hovering around the $75,000 mark.
He noted additionally the fact that cash, term deposits and bonds have less appeal because of the historically low interest rates, causing cryptocurrencies to become more attractive to SMSFs.
“How they invest, however, depends on whether they are in the accumulation or retirement phase, the fund’s risk profile and where fund members are at in their superannuation journey,” Mr Stevenson said.
“For those in the accumulation phase, we are finding investors and SMSFs are more prepared to take a bigger risk, as their focus is on growing their funds under management, while for those in the retirement phase, it’s a far more cautious approach, with cryptocurrencies typically a smaller percentage of their portfolios.
“Either way, when investing in the accumulation or retirement phase, the key theme we’re seeing is that the investment dovetails with the goals of the fund and aligns with their investment strategy.”
Under ATO guidelines, SMSFs can invest in crypto but should consider it good practice to ensure it is under the fund’s trust deed, is in accordance with the fund’s investment strategy and complies with the Superannuation Industry (Supervision) Act (SISA) and the Superannuation Industry (Supervision) Regulations (SISR).
Previously, it was flagged that with super funds now identifying on their tax return whether they are investing in these assets, it could be an indication that the ATO is aware that it is a challenging asset to hold in a super fund and that it is concerned that some funds may be getting it wrong.
Speaking on the requirements and challenges to choosing crypto as an SMSF option, Mr Stevenson said there are still hurdles limiting SMSFs from investing in cryptocurrency.
“It’s a relatively new asset class and many financial advisers lack experience with this type of investing,” he said.
“But this is changing. Cryptocurrency is proving to be an attractive option for many SMSFs that have done their research and are comfortable with the risk.
“We are also finding a growing number of advisers are coming to Cointree’s account managers wanting to learn more about this asset and how it can be part of an SMSF portfolio. Consequently, we’ve seen 53 per cent more SMSF applications in the last three months than we did in the whole of last year, a trend we expect to continue as SMSFs look to diversify their portfolios.”
SMSFs are a significant pool of investment capital for the crypto market, according to Cointree. Total assets are about $750 billion, and they comprise about 26 per cent of the total superannuation pool of funds.
Investment Property, Term deposits & shares are derivative fiat investments, therefore subject to the same debasement caused by money printing Vs a new digital monetary network with 120 million participants to date & is growing exponentially (see Metcalf’s law) which has a fixed supply & can not be tampered with. It’s the first time in history that money has been separated from the State (a really big deal). Example Comparison – If you were living in Argentina knowing that the Paso was going to devalue against USD by a factor of 100, no matter what investments you made there (denominated in pasos), they would fail -stocks, bonds, property, cash (all of it) Vs ensuring your revenue & holdings were denominated in a harder currency such as the USD at the time. BTC is the hardest money on the planet, a more efficient means to store or transfer value. All asset classes, especially fiat currencies are devaluing against BTC and have done so since 2009. Mike, “what is backing Fiat currency” is a much better a question. As is, “what is your Plan B when no one wants to buy or use fiat” as is already the case in in many Countries. BTC as an asset class, is above 1 T dollars & I strongly suggest you take a deeper look at it than you have. Goldman Sacs, JP Morgan, Paypal, Square, Visa Michael Saylor, Elon Musk, Mark Cuban, don’t sound like they’d be involved with a tulip bubble. To answer your questions What is backing BTC ? Blockchain technology driving the hardest & newest monetary network the world has ever seen, that can not be tampered with. Used by over a 120M people on a decentralised network (the newest form of human organisation the world has ever seen). Where is the value ? see above & do yer research. Tangible not in the cloud? Are you still using hard files in a filing cabinet ?? Any current good company that doesn’t engage in this technology won’t be a good Company in the near future- Coinbase listing next week at an estimated valuation of $140B. Again I urge you to check thoroughly your own Plan B Sir!
Questions, property is bricks and mortar. Term Deposits have bank security. Shares in good companies have a viable business backing them. What is backing Crypto? Where is the value or statements? Tangible not in the cloud. What is the plan B when no one wants to buy this?