Centralized crypto exchanges were identified as a potential hurdle to the growth of crypto investments in the future. Recent legal actions taken by the United States Securities and Exchange Commission against major exchanges Coinbase and Binance exemplify the challenges faced by centralized exchanges.
Australia’s crypto exchanges have also encountered obstacles, with Binance Australia suspending Australian dollar-denominated services and Westpac, Australia’s second-largest bank, prohibiting transactions with the exchange.
Additionally, Commonwealth Bank, the country’s largest bank, expressed concerns about the high risk of scams associated with crypto exchanges and may decline certain payments to them.
Despite considering themselves as “risk averse,” a surprising 31% of young Australian investors, specifically those in the 18-24 age group, hold or have traded cryptocurrencies in the past year, according to a study conducted by the Australian Securities Exchange (ASX).
The study, which included cryptocurrency as an asset class for the first time, revealed that 46% of these young investors preferred “stable returns,” highlighting the contradiction between their risk aversion and their significant investment in crypto.
Researchers attribute the interest of young people in cryptocurrencies to their desire to differentiate themselves from previous generations, coupled with the fact that many of the 1.2 million new investors who have entered the market since 2020 are tech-savvy and active on social media.
The ASX study, conducted by financial research firm Investment Trends, found that young investors in the “next generation” category had a median cryptocurrency holding of $2,700, representing 6% of their total portfolio, twice the 3% allocation observed among other age groups.
Interestingly, although young investors had the highest crypto allocation relative to their portfolios, it was the “wealth accumulators” between the ages of 25 and 49 who owned the largest share of cryptocurrency, accounting for 69% of the total investment in digital assets. Investors aged 50 and above held only 19% of the overall crypto ownership.
While the report acknowledges the volatility of cryptocurrencies, it recognizes their popularity among investors.
It revealed that 29% of potential investors who currently do not invest in any capacity are considering some form of crypto investment within the next year. However, the report maintains a cautious approach, stating that the full acceptance of cryptocurrencies in mainstream investing is still a topic of debate.
The ASX’s report, based on an extensive online survey of 5,519 Australian adults conducted in November 2022, provides valuable insights into the growing interest in cryptocurrencies among young Australians.
While young investors exhibit both risk aversion and significant crypto investments, the report highlights the evolving landscape of investing and the potential challenges faced by the crypto industry as it seeks mainstream acceptance.
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