(Bloomberg) — Coinbase Global, the largest U.S. cryptocurrency exchange, is targeting potential demand in Australia’s growing self-managed pension sector.
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The exchange is developing services targeting this segment, said John O'Lauren, Asia Pacific managing director. These portfolios account for about a quarter of Australia's $2.5 trillion pension system, with A$1 billion ($664 million) allocated to cryptocurrencies, according to the latest data from the Australian Taxation Office.
Cryptoassets held within these self-directed retirement funds could be on track to hit a record following this year's inflows and a 55% rise in the price of Bitcoin. However, Australian institutional investors have largely shunned the digital asset sector given its history of scandals and sometimes intense volatility.
“Self-managed super funds may just set a single allocation and then forget about it,” Mr O'Lauren said in an interview. “We work to provide these customers with a one-time service, a service that gets them doing business with us and keeps them coming back.”
Cryptocurrencies have been boosted this year by the debut of the US Spot Bitcoin exchange-traded fund, with the digital asset reaching an all-time high in March. Australia is expected to roll out more crypto ETFs by the end of 2024, with products from VanEck Associates Corporation and BetaShares Holdings among others.
Read more: Bitcoin ETF craze heads to Australia after $53 billion shipment in US
“We don't think this is cannibalizing ETF participants, but rather it's an upward trend and someone coming in through a self-managed portal,” said O'Lauren, who previously worked at Ant Group and Goldman Sachs. “We believe that there is sufficient interest in the project,” he said.Group Co., Ltd.
There are still obstacles to overcome, including deep-seated concerns about the dangers inherent in the speculative world of cryptocurrencies.
Advisor's Note
Michael Houlihan, who runs a personal wealth management business, warned against taking large stakes. He said people interested in digital assets are typically in their 40s and have lower account balances than older age groups.
“You don't want to invest a significant portion of your portfolio in something this high-risk,” he said.
Still, global rivals such as Kraken, as well as local companies such as BTC Markets Pty and Independent Reserve Pty, are looking to take advantage of the self-management opportunity.
Independent Reserve CEO Adrian Przerozny said Independent Reserve is focused on building relationships with financial advisors who serve self-managed funds and developing tax reporting tools to help persuade clients. It is said that it was developed.
Bitcoin, the largest token, is the most popular cryptocurrency held by self-managed super funds, accounting for around 60% of digital asset holdings, according to data from BTC Markets CEO Caroline Bowler. There is. “Self-managed super funds are growing their client base” and “they tend to be more cautious with their allocations,” she says.
ASX Ltd., which handles around four-fifths of Australian equities trading, is expected to approve the first spot Bitcoin ETF for its main board in the coming months.
“With the launch of an Australian Bitcoin ETF scheduled for later this year, we expect this sector to continue to grow,” said Kraken managing director Jonathan Miller.
–With assistance from Amy Bainbridge.
(Updates Bitcoin performance in third paragraph.)
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