Author: DeepChain DCNews
A new study has found that despite considering themselves more “risk averse” than their older counterparts, almost one third of young Australian investors have held or traded cryptocurrencies in the past year.
In an Australian Investor Study by the Australian Securities Exchange (ASX), 46% of “next-gen investors” (the report’s term for investors aged 18 to 24) said they preferred “stable returns”, but 31% of them had invested heavily in crypto.
“The evident financial conservatism of young investors is inconsistent with their level of investment in cryptocurrency,” the report said.
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Researchers attributed young people’s investment in crypto to a desire to do things differently from their parents, while also noting that “many of the 1.2 million new investors who have entered the market since 2020 are tech-savvy and connected to social media”.
According to ASX research conducted by financial research firm Investment Trends, the median cryptocurrency holdings of “next-gen” investors was USD 2,700, or 6% of their total portfolio, double the 3% cryptocurrency allocation of all other investor age groups.
However, while young investors had the most cryptocurrency relative to their portfolios, “wealth accumulators” – investors aged 25 to 49 – held the most cryptocurrency overall, comprising 69% of total digital asset investments. Investors aged 50+ accounted for just 19% of overall cryptocurrency ownership.
The report marks the first time that cryptocurrency has been included in the ASX’s Australian Investor Study. As such, the report approaches the issue with some caution, stating that whether cryptocurrency can be “fully embraced by mainstream investing” remains to be seen.
Nevertheless, the study acknowledges that despite its volatility, cryptocurrency remains a popular choice for investors and shows that 29% of “intending investors” – those who currently have no capacity to invest – are considering some form of crypto investment within the next 12 months.
It is worth noting that centralized crypto exchanges were identified as a potential “brake” on future crypto investment growth.
The recent legal actions taken by the US Securities and Exchange Commission against US exchange giants Coinbase and Binance are a clear example of the challenges facing centralized exchanges.
In recent months, Australian cryptocurrency exchanges have also faced challenges. In May, Binance Australia announced that it would suspend all AUD-denominated services in June after its local payment provider was ordered to stop supporting the exchange. On the same day, Australia’s second-largest bank, Westpac, banned customers from trading with the exchange.
Over the next month, Australia’s largest bank, Commonwealth Bank, said it may refuse to pay certain amounts to cryptocurrency exchanges due to “high-risk” fraud.
As Australia’s largest bank, @CommBank has just taken a big step back. They are blocking crypto transactions “for our safety.” pic.twitter.com/4tsddbNPg8
— Charles Edwards (@caprioleio) June 15, 2023
The ASX report was conducted in November 2022 and the results are based on an in-depth online survey of 5,519 Australian adults.