One in 10 Aussies have held crypto exposure

An estimated 1.95 million Australians have had exposure to cryptocurrencies, according to leading research house, Investment Trends.

In its first quantitative study of cryptocurrency adoption in Australia, Investment Trends has found that of the estimated 1.95 million Australians who have had exposure to the asset class, a total of around 390,000 have exited while 1.56 million still hold.

Commenting on the findings, Investment Trends head of research, Irene Guiamatsia said one in 10 Australian adults had at least once made an investment in crypto assets, underscoring the fast-growing popularity of an asset class in existence for less than two decades.

However, she pointed out that notwithstanding this growth in Australia, it trailed adoption in other OECD markets, noting that in the US it had gained near mainstream levels with one in five adults having gained exposure.

The bulk of Australian crypto users buy and sell coins on dedicated cryptocurrency exchanges, while only one in ten take exposure through derivatives and a similar proportion do so through listed instruments such as ETFs.

“The conscious effort to diversify provider exposure appears to strengthen with experience. This has piqued our interest as we have observed the exact opposite trend in retail stocks/ETFs investing,” Guiamatsia said.

On average, Australian crypto users establish a relationship with about half of the providers they know (they are aware of 6.7 crypto provider brands, have accounts with 3) and the more experienced they are, the more providers they are likely to use.

The Investment Trends analysis suggested that the deliberate intention to diversify their provider exposure as they learn more is consistent with common-sense avoiding “all eggs in one basket”, but also reflects the necessity to do so in order to access a wider range of cryptocurrencies.

The desire to diversify across providers would have been exacerbated by FTX collapse, which sent tremors across the sector and beyond.

Survey responses collected in the immediate aftermath of the FTX collapse suggested a clear bifurcation in the public reaction: Interest among non-users dropped, while many current users indicated an intention to switch to more trustworthy partners, seeking audited financials and more detailed disclosures (see chart below).

“Some degree of skittishness in the immediate aftermath of the FTX event was to be expected, particularly as BTC price dropped below the psychological threshold of $20,000. Perhaps more insightful is the fact that many users have been relatively unphased, albeit calling for greater transparency from providers,” Guiamatsia said.