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ATO Data Shows 400% Increase of Crypto in SMSF
- Crypto holdings in Australian SMSFs have increased by 400% since 2019.
- However, crypto ownership in SMSFs is still down from its all-time high in 2021.
- Digital currencies comprise just 0.1% of the total net assets held in Australian retirement funds.
- SMSFs are becoming a legitimate option for long-term self-custody of digital assets.
The most recent quarterly update from the Australian Tax Office shows that Aussies are more willing to add digital currencies to their retirement portfolios. The data shows that AUD $992 million worth of crypto is distributed among Australians with a self-managed super fund (SMSF). This figure represents a 400% increase in ownership since the same time in 2019, where less than AUD $200 million of retirement funds were dedicated to virtual assets.
Danny Talwar, head of Tax at Koinly told CoinTelegraph that these figures represented the largest growth “class in SMSFs.”
Holdings Still Down From All-Time High
Despite the long-term statistics looking positive for crypto adoption in Australia, the 2023 Q3 holdings are significantly lower than during its all-time high two years. In the 2nd quarter of 2021, Australian SMSFs held over AUD $1.6 billion dollars worth of cryptocurrency, representing a 38% increase compared to current data. Additionally, September’s figures were also down from the previous quarter (June 2023), albeit less than 1%.
It’s worth noting that while Australians are clearly demonstrating an appetite for cryptocurrencies as part of their retirement plans, the figures pale in comparison compared to other assets. Digital currencies comprise just 0.1% of the total assets held by Australians in their SMSFs as of September 2023.
SMSFs in Australia
The requirements for opening and maintaining a self-managed super fund in Australia are fairly stringent. There is a rather steep barrier to entry – most experts recommend having an opening balance of around AUD $200k, for example. Complicated tax and accounting rules also apply to SMSFs, although there are several advantages for certain financial situations.
Your SMSF strategy must allow you to hold crypto. It must be for the sole purpose of providing you with a retirement benefit. You need to get everything audited. You need to segregate SMSF holdings from personal holdings. You can’t have a blurred line between the two.
Danny Talwar SMSFs as a vessel for HODLing crypto have clearly grown in popularity since 2019 and are becoming a viable option for long-term believers in digital assets. It provides crypto owners with self-custody over their coins (although SMSF holdings aren’t particularly liquid), ensuring they can avoid the potential risks of holding funds on an exchange.
Guide to cryptocurrency
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
