Questioning crypto in Self-Managed Super Funds

Last week’s SMSFA conference at the Sydney ICC provided a great opportunity for finance industry professionals to find out more about how cryptocurrencies are starting to fit into Australia’s superannuation landscape.

The partnership between Bitcoin Trader and Xpress Super presents SMSF clients with a range of new options. Pictured: Ben Hagemann, Luke Pierson and Warrick Pleash with Xpress Super CEO Olivia Long. Image: Stephen Reinhardt

For two days, the Bitcoin Trader information booth was beset by crypto-investors and the coin-curious alike. There’s clearly a groundswell of interest in the inclusion of cryptocurrency in SMSFs, evidenced by the sheer number of financial planners who wanted more information about investment options and compliance, in order to better answer their clients’ questions about the new asset class.

It’s important to remember those words: Cryptocurrency is a new asset class, and it’s here to stay. Adverse press about Bitcoin and other cryptocurrencies has done nothing to hamper the latest market rally, in which the bitcoin punched through the US$10,000 resistance level and surged to US$11,500 [at time of publication]. For anyone who bought during the summertime seasonal slump, this is fantastic news, because it means we’re back on the way up, and ever-closer to fulfilling predictions of the bitcoin surpassing its November/December bull run of 2017.

In terms of SMSF investment specifically, interview research done by Bitcoin Trader at the SMSFA conference showed that retail clients are asking their financial advisors some key questions, questions that are quite different to the enquiries seen at the 2017 conference. First and foremost, clients want to know how to buy bitcoin and other cryptocurrencies. The answer to that one is easy: through exchanges, or through brokerages like Bitcoin Trader.

It stands to reason that the latest analysis will only feed the demand for quality education and financial advice about investing in cryptocurrency. Bitcoin Trader’s new partnership with independent SMSF administrator Xpress Super means that the general public has a new and easy avenue to migrate away from conventional retail super funds and step up to a greater level of freedom of choice, and therefore, control over future retirement income.

The question on everyone’s lips: How much of my portfolio should be in cryptocurrency?

As members of any retail superannuation fund, clients have a choice about how to balance their portfolios. They can choose a standard product, or they can customise their portfolio balances to reflect a given profile of diversification: They can choose the risk profile with which they are most comfortable, setting it to a level that will differ between investors, with a view to maximising returns according to their own investment strategies. Nearly all super products include a small balance of higher-risk investment, so it’s quite predictable that certain investors would want to take on an allocation of cryptocurrencies. The rewards can be high, and the market is new and evolving.

But the question on everyone’s lips? “How much of my portfolio should be in crypto?”

Perhaps the most obvious answer to this question is – DO NOT put 100% of your super into crypto assets [like this self-managed investor]. For those interested in a higher risk profile than traditional super investment options, 10-15% might be considered a reasonable allocation of cryptocurrency.

So, it’s clear that cryptocurrency has been accepted as a real asset class by the people whose opinions matter most – The retail market. The mainstream press has either had some trouble grasping the benefits of cryptocurrency, or been captive to a lack of will to support the asset class, based on a deep-rooted relationship between the fourth estate and traditional financial markets. However, despite scaremongering in 2017/18, the bitcoin has continued to weather corrections and turn back on the downtrend, while the second largest cryptocurrency by market capitalisation, Ethereum, holds strong. As such, it stands to reason that as investment demand continues to shift into the crypto space, the media will follow the money.

To be sure, cryptocurrency is a higher-risk asset, but volatility is not a dirty word. In fact, quite the opposite is the case: it is the volatility of cryptocurrency that presents greater opportunity to capitalise on market growth, as well the chance to manage losses in a relatively short space of time with a price-averaging strategy (buying in the price dips and holding on through upward surges). The inherent value of cryptocurrency lies in the very architecture of the algorithm, just as the inherent value of gold lies in its atomic structure. Of course, the Cryptocurrency Highway is littered with bad analogies, so be wary of anyone professing to compare cryptocurrency to something unrelated, especially if they have a vested interest in preventing you from buying in to the blockchain revolution.








Bitcoin Trader is a personalised cryptocurrency brokerage firm catering to individual, corporate, institutional and SMSF clients. The company is incorporated in Australia, with established global partners providing access to high liquidity and multicurrency settlements. Our core focus is on safe, secure and compliant cryptocurrency investment, divestment and portfolio reallocation.

Disclaimer: This content is for informational purposes only. It does not constitute investment or financial advice. Any information, material or commentary is intended to provide general information only. Information contained in this document has been obtained from sources believed to be reliable, but BT Brokerage Services Pty Ltd trading as Bitcoin Trader, makes no representation as to its accuracy or completeness. Before acting on any information contained in this document, each person should consider its appropriateness having regard to their own or their clients’ individual objectives, financial situation and needs. You should obtain independent taxation, financial and legal advice relating to this information and consider it carefully before making any decision or recommendation.


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