5 Advantages and Disadvantages of a Crypto Focused Superannuation

In this article, we’ll take a look at the Australian Pros and Cons of having Bitcoin and Cryptocurrency in your Superannuation.

We’ve spoken to the experts in Crypto Super at New Brighton Capital to help us produce this content for you.

Recently, we also took a closer look at the suitable cryptos for your super portfolio and why they might be good candidates considering Price Stability, Longevity, Robustness and Moat/Competition.

Disadvantages

1. Risk – performance. New Brighton Capital does not provide financial advice. Our bread and butter client has a good idea of where they want to invest their super and we provide the tools and know how so you can invest your super how you see fit, whether that be in Bitcoin Ethereum or BPH and Tesla. The ATO does not require you to have a certain level of performance with your SMSF but you need to realise that the buck does stop with you regarding the performance of your fund. So as long as you are comfortable making the investment decisions and being in the driver’s seat, then an SMSF might be a good option for you. 
2. Responsibility – Self managed super funds do carry a lot of responsibility regarding compliance and reporting obligations. NBC becomes what is called the administrator for your fund. So while you are ultimately responsible for the running of your fund, you outsource the administrative work to us. So we look after the compliance and reporting etc so you can focus on managing your portfolio. 
3. Cost – The cost to run an SMSF is static, meaning it costs the same regardless of how much you have in you super. This is different to retail funds where you will pay on average of 1-1.5% of the value of your super in fees each year. Eventually it gets to the stage where you are crazy not to have an SMSF, but after you do the sums, even if you find an SMSF more expensive for now, many clients are happy to pay an extra few hundred dollars a year to be exposed to assets that they you would not otherwise be able to be exposed to in their superannuation, like Bitcoin. There is no legal minimum balance you need to have an SMSF, it just needs to make sense to you in your situation. 
4. Time – active or inactive as you wish. NBC has integrated with Australia major exchanges to cut the time you spend to prepare your annual reporting to minutes, not hours. It takes our average client under 30 minutes a year to provide the information we need to complete the reporting requirements for your SMSF.
5. Security – Specifically relating to cryptocurrency, SMSFs can keep their coins on exchanges or transfer coins to their own hardware wallet where you control the private keys. New Brighton Capital will never ask for your seed phrase or private keys so make sure you never give these to anyone, ever. We will, however, require the public addresses of where your SMSF off exchange crypto holdings are so we can verify their existence and complete the reporting for your fund. Clients of New Brighton Capital also have access to a secure encrypted online portal which you can think of as your online filing cabinet for your SMSF. This is where we communicate with you and you upload your information for the reporting etc.

Advantages

1. Choice – Vastly more options with an SMSF compared to a retail superannuation fund. Clients can purchase any cryptocurrency listed on any of our approved providers. Clients are not just limited to cryptocurrencies, you can also invest in shares (local and abroad), real estate, art or anything permitted under the superannuation laws. While New Brighton Capital cannot tell you where to invest we can definitely let you know whether you are permitted to invest in a certain asset or what you options might be.
2. Control – With New Brighton Capital, You are the only one in control of your SMSF bank account, your trading accounts and your assets.  Noone controls your money or your assets but you.
3. Cost – As explained in the disadvantages, the cost to run an SMSF is generally fixed regardless of how much you have in your super. So there comes a point where you are crazy not to have an SMSF because it is simply cheaper.
4. Front run institutional money – Rarely does the retail investor have an advantage over institutions like the banks or Wall St. For over a decade retail investors have had the advantage over institutional investors in the crypto space because due to on ramps and legislation. This window is closing fast as institutions now have the on ramps and legislative clarity to participate in cryptocurrency space.
5. Flexible – You do not have to transfer all your superannuation money into an SMSF if you set one up. You can kick it off with a partial transfer and transfer more funds into the SMSF down the track. So, yes you can have a retail superannuation fund and an SMSF at the same time. You are also not tied to your SMSF, so you can wind it down and move back to a retail fund if you wish in the future.

Need help? Speak with Cryptocurrency Superannuation Expert at NGS Crypto, call 1300 001 647, or Contact them via email