Coinbase Global Inc., a major U.S. bitcoin exchange, plans to offer services to Australia’s self-managed pension funds, a significant part of the nation’s pension system. John O’Loghlen, Asia-Pacific Managing Director, announced this new service.
Self-managed portfolios represent over a fifth of Australia’s $2.5 trillion pension system, including A$1 billion ($664 million) in cryptocurrency, according to the Australian Taxation Office. Despite crypto’s volatility, more Australians are exploring it for retirement plans. Coinbase aims to simplify buying and managing crypto for these investors.
The launch of U.S. spot-bitcoin exchange-traded funds (ETFs) earlier this year spurred a rise in crypto value, reaching a peak in March. Van Eck Associates Corp. and BetaShares Holdings Pty plan to introduce more crypto ETFs in Australia by late 2024.
However, investing in cryptocurrency is risky. Michael Houlihan, a private wealth manager, cautions against heavy investment in digital assets, noting that interested individuals are usually in their 40s with smaller account balances. He emphasized the high risk of such investments.
Local firms like BTC Markets Pty and Independent Reserve Pty, alongside international players like Kraken, are also targeting the self-managed pension fund market. Caroline Bowler, CEO of BTC Markets, stated that Bitcoin is the most popular crypto among these funds, making up 60% of digital asset holdings. Adrian Przelozny, CEO of Independent Reserve, noted the cautious nature of these investors.
ASX Ltd., which handles most of Australia’s equities trading, is expected to approve the first spot-Bitcoin ETFs for the main board soon. Jonathan Miller, Kraken’s managing director, anticipates significant growth in this area with the upcoming launch of Australian Bitcoin ETFs.
