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ASIC chair Joe Longo concerned about popularity of crypto assets

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Danielle Le MessurierThe West Australian
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An ASIC survey has revealed 44 per cent of Australian retail investors held crypto in November last year.
Camera IconAn ASIC survey has revealed 44 per cent of Australian retail investors held crypto in November last year. Credit: whyframestudio/Getty Images/iStockphoto

The corporate watchdog is troubled by new research revealing almost half of all Australian retail investors owned crytocurrency late last year, making it the second most common asset held by investors after shares.

A new survey of over 1000 local retail investors by the Australian Securities and Investments Commission revealed 44 per cent held crypto in November 2021, while a quarter who held the volatile asset indicated it was the only investment they held.

The research also showed that, after bank trading platforms (used by 31 per cent of surveyed investors), the three most commonly used platforms all specialised in cryptocurrency.

ASIC chair Joe Longo said the regulator was concerned about the number of people who reported investing in “unregulated, volatile crypto-asset products”.

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“This research does highlight during this particular point in time, the appeal of crypto-assets to the market. According to the survey, only 20 per cent of cryptocurrency owners considered their investment approach to be ‘risk-taking’, raising concerns that investors did not understand the risks of this asset class,” he said.

Australian Securities and Investments Commission chairman Joe Longo.
Camera IconAustralian Securities and Investments Commission chairman Joe Longo. Credit: Ian Munro/The West Australian

“ASIC is also concerned that there are limited protections for crypto-asset investments given they have become increasingly mainstream and are heavily advertised and promoted. There is a strong case for regulation of crypto-assets to better protect investors.”

Despite changes to economic conditions since the research was conducted, ASIC said retail market activity had remained elevated this year compared to pre-pandemic levels.

Mr Longo said the growth in retail markets since COVID-19 had fuelled changes to the mix of product types being traded.

“The research also confirms the prominence of digital and social channels as sources of information for investors, and the diversity in trading platforms they use”, he said.

Since March 2020, 34 per cent of surveyed investors reported sourcing information from Google searches while 41 per cent relied on social media and networking platforms including YouTube (20 per cent), Facebook (11 per cent), podcasts (10 per cent) and financial influencers (10 per cent).

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