Almost half of Australia’s retail investors owned cryptocurrency at the end of 2021

Almost half of Australia’s retail investors owned cryptocurrency at the end of 2021 and more got their information from YouTube videos than from financial advisers, the securities watchdog said on Thursday, calling the data a “strong case for regulation”. An Australian Securities and Investments Commission (ASIC) survey of 1,053 retail investors conducted last November found 44% said they held cryptocurrency, making it the second most popular investment after Australian shares.

A quarter of investors surveyed who held cryptocurrency said it was their only investment. The data will add to pressure on Australia’s new Labor government to emphasize consumer protection as it continues a years-long study, launched under the previous Conservative government, into whether and how to regulate digital assets. It also legitimizes widely circulated statistics about Australia’s high level of cryptocurrency ownership, dismissed as “unbelievable” by the central bank’s top official last year.

The survey also showed that 41% of respondents looked for investment information on a social network, with 20% citing Alphabet Inc’s Youtube and 11% citing Meta Platforms’ Facebook. According to the survey, only 13% obtained information from a financial advisor or broker. “We are concerned about the number of people surveyed who said they were investing in unregulated, volatile crypto-asset products,” ASIC chairman Joe Longo said in a statement.

“There are limited protections for investing in cryptoassets as they become increasingly mainstream and are heavily advertised and promoted. There are strong reasons to regulate cryptoassets to better protect investors.”Since the survey, rising interest rates have prompted investors to abandon speculative assets, causing cryptocurrency prices to plummet and sending some crypto-related businesses into bankruptcy. The survey was conducted in the same month Bitcoin and Ether, the two most popular cryptocurrencies, hit record highs. Both have since fallen by about two-thirds, while the Australian share market has fallen by about 6%.

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