SMSFs looking to cryptocurrency for diversification

Cryptocurrency is becoming more attractive to self-managed superannuation funds (SMSF) as it is now being seen as an alternative to gold as a store of value, according to Cointree. 

The cryptocurrency exchange’s chief executive, Shane Stevenson, said SMSFs were attracted to the capital gains of cryptocurrency and that it was a new asset class. 

Stevenson noted as cash, term deposits and bonds had less appeal due to historically low interest rates, SMSFs were finding cryptocurrency more appealing. 

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“How they invest however, depends on whether they are in the accumulation or retirement phase, and fund’s risk profile and where fund members are at in their superannuation journey,” he said. 

He said those in the accumulation phase were prepared to take more risk and those in retirement phase took a “far more” cautious approach with cryptocurrencies typically a smaller percentage of their portfolios. 

“We’re seeing is that the investment dovetails with the goals of the fund and aligns with their investment strategy,” he said. 

“There are still hurdles limiting SMSFs from investing in cryptocurrency. It’s a relatively new asset class and many financial advisers lack experience with this type of investing. But this is changing. Cryptocurrency is proving to be an attractive option for many SMSFs that have done their research and are comfortable with the risk.” 

Stevenson said his firm had seen 53% more SMSF applications in the last three months than it did during 2020. 

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