Cryptocurrency is risky business, according to regulators, but this isn’t stopping one in four Aussies investing in the digital money.
That’s around five million Aussies with a financial interest in cryptocurrency, according to research from comparison website Finder.
It found 13 per cent of Australians now trade Bitcoin, while 6 per cent hold Ethereum assets, which is the second largest cryptocurrency.
Bitcoin has been swinging to record breaking highs, cracking the $50,000 mark last month, as hungry investors snap it up.
But the UK financial watchdog recently warned that consumers should be prepared to lose all their money if investing in cryptocurrency.
There is also speculation that President Joe Biden’s administration could crack down amid fears its being used by criminals.
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When it comes to Aussie investors, increasing value, inflation hedging — a strategy to protect against the decreased purchasing power of money — and FOMO, are some of the reasons its become a popular place to put their hard earned cash.
Andrew Munro, Finder’s cryptocurrency editor, said the digital currency was becoming much more mainstream.
“Cryptocurrency achieved a remarkable rise in 2020,” he said. “With more Australians looking for inflation hedges, yield-bearing assets and alternative investment opportunities, cryptocurrency may be an increasingly natural choice for many.”
Almost one in five Aussie investors are wanting to diversify their portfolio by snapping up the digital currency, the research also found.
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Mr Munro said that cryptocurrencies other than Bitcoin are also becoming more mainstream.
“Several years ago Bitcoin was the only cryptocurrency the average Australian knew about,” he said.
“Now others like Ethereum are gaining popularity thanks to trends like DeFi (decentralised finance) and the hunt for yield in a low interest rate environment.”
The research showed that men are more than twice as likely as women to own cryptocurrency.
Crypocurriences popular among Aussie enthusiasts including Ripple, Litecoin and Bitcoin cash.
The first real-world Bitcoin transaction was a pizza purchase on 22 May 2010, from Papa John’s, for 10,000. The pizzas were valued at $US25 ($A33) at the time, but today those pizzas would be worth nearly $US140 million ($A184 million).