Bitcoin boom: cryptocurrencies now chased by older investors too

Older Australians are rushing to buy cryptocurrencies like Bitcoin in their quest for big financial returns – but they are being urged to tread carefully.

Older Australians are rushing into buying Bitcoin and other cryptocurrencies to grab a slice of stunning financial returns, but are being urged to tread carefully.

Cryptocurrencies are not just attractive to tech-savvy Millennials and younger generations. New data from Australia’s largest cryptocurrency exchange, Coinspot, shows almost one in three of its customers are now aged over 40.

Crypto craziness continued last week with fresh record highs and US platform Coinbase making its stock exchange debut valued at $110 billion amid wild share price swings.

In Australia, Coinspot now has one million customers and its co-founder and CEO, Russell Wilson, says it has noticed a 350 per cent jump in users aged over 40 in the past year, with some aged in their 70s.

He says while older Australians were not early adopters of cryptocurrencies, they were now seeing more regulation and building a greater understanding.

“It’s breaking down barriers,” Wilson says.

Bitcoin.

SMASHING RECORDS

A single Bitcoin was selling for more than $84,000 last week, up from $10,000 a year ago and $500 five years ago, and Wilson says newcomers can get started with “just $100 and see how it works”.

“You can allocate a small portion of your portfolio into Bitcoin and other digital currencies,” he says.

“There’s a group of extreme risk-takers willing to put all their self-managed superannuation into cryptocurrency, but we are seeing a more measured approach where people are allocating a single-digit percentage of their portfolio.

“Millennials have a stronger belief that it can be a currency, but over-40s see it as a short to medium term investment.”

SHARING SUCCESS

Tania Nohra, 40, buys and sells Bitcoin and several other cryptocurrencies and says Tesla and SpaceX founder Elon Musk’s recent support of the sector has helped made people more aware and confident.

“I have helped a lot of people at work get involved, especially over the last eight months,” she says.

“A lot are in shares so it’s something different to diversify their funds.

“My intuition is it will never drop back to where it was in 2018 ($4400). I think it’s got potential to go a lot higher.”

Tania Nohra, who has bought and sold several cryptocurrencies. Picture: Tim Hunter

Bitcoin is the biggest but not the only name in cryptocurrency, and there are more than 250 currencies able to be bought on Australian exchanges.

Digital currency trading platform Coinstash’s co-founder, Mena Theodorou, recommends diversifying your cryptocurrency holdings beyond just Bitcoin.

“It’s crucial that you have a basic understanding of the market, its movements and terminology, as well as the crypto-assets you’re interested in buying or selling, its demand, and it’s longevity,” he says.

Investors should only use regulated trading platforms that offer local support. “In Australia, look for platforms that comply with ASIC guidelines and are registered with AUSTRAC,” Theodorou says.

“Don’t expect to get rich overnight. Just like the stock market, the crypto market should never be seen as a get-rich-quick-scheme.

“It’s important to adopt a long-term investment mindset by buying and holding. Investors who quickly buy then sell off crypto-assets can often get burned or simply miss out when the asset booms.”

KNOW THE BASICS

• Bitcoin and other cryptocurrencies are not physical assets. They are created electronically, and transactions are recorded and stored in the cloud.

• Australia has several regulated cryptocurrency exchanges that allow investors to quickly buy and sell. Understand their fees and charges.

• To start, create an account and a secure bitcoin wallet, pay your money plus a service fee, and begin trading.

• Investment gains made from selling Bitcoin attract capital gains tax, and the ATO watches the market closely.

• Hacking is a risk because there is no way to retrieve lost or stolen cryptocurrency assets, and never forget your passwords.

• Expect volatility and cyclical booms and busts. Some of cryptocurrency’s biggest supporters think another big fall is coming, but believe there could be more huge rises before that.