According to a new study, the young Australian investors are more interested in cryptocurrencies. Notably, despite seeing themselves as the group reluctant to take risks than their counterparts, about a third of young Australian investors currently hold or have traded cryptocurrencies over the last year.
In a new study of the Australian investors, the Australian Securities Exchange (ASX), said that 46% of “next generation investors,” prefer to have stable returns. The study classifies the young investors aged 18 to 24 years as the next generation investors. Notably, while these 46% of investors have voted for reliable returns, 31% of them invested substantially in crypto. The report stated:
The apparent financial conservatism of younger investors is at odds with their level of investment in cryptocurrency.
The research for the ASX’s report was conducted in November 2022, with its findings based on an in-depth online survey of 5,519 Australian adults. Researchers said the reason that younger people invested in crypto to a desire to do things differently from their parents. Additionally, the reason also combined with the observation that “many of the 1.2 million new investors who’ve taken up investing since 2020 are tech-savvy and connected to social media.”
According to ASX’s study, the median holding of cryptocurrency for “next generation” investors stands at $2,700, representing a 6% weight in their total portfolio, double that of the 3% crypto allocation for all other investor age groups.
However, while young investors owned the most crypto relative to their portfolios, it was the “wealth accumulators” mostly the investors aged 25 to 49 who owned the most cryptocurrency. The investors account for 69% of the total investment in digital assets.
Simultaneously, investors aged 50+ accounted for just 19% of overall crypto ownership. Notably, this report marked the first time that cryptocurrency had been included as an asset class in the ASX’s Australian Investor Study. Overall, the report maintained a cautious approach thorough out the report. It also said it’s still up for debate whether cryptocurrencies can become “fully accepted in mainstream investing.”
However, the report admitted that despite the infamous volatility, cryptocurrency remains a popular choice among investors, revealing that 29% of all “intending investors,” people who don’t currently invest in any capacity are considering some type of crypto investment within the next 12 months. Additionally, in the report, centralized crypto exchanges were singled out as a potential “handbrake” for the growth of crypto investment in the future.
The recent series of enforcement actions by the United States Securities and Exchange Commission’s (SEC) against crypto giants Coinbase and Binance in the US stands as a clear example of challenges facing centralized exchanges. Speaking of the Australian government which has been primarily cautious following the collapse of FTX exchange in November which affected 30,000 citizens. The government vowed to placing a strict set of regulations for the industry.
Following that, Australia’s crypto exchanges have also faced challenges in recent months. In May, Binance Australia announced it is suspending all Australian dollar-denominated services in June after its local payments provider was ordered to halt support for the exchange. The following month, Commonwealth Bank which is the Australia’s largest bank said it may decline certain payments to crypto exchanges, citing a “high risk” of scams.