Category: Investing

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Crypto News Investing Markets Surveys

Gemini Report Reveals 80% of Aussie Crypto Investors are HODLers

The first global state of crypto report from cryptocurrency exchange Gemini has found that over 80 percent of Australian crypto investors opt to hold their assets long-term. 

The high percentage of committed HODLers in Australia is similar to figures found in other parts of the world – from 72 percent in the Middle East to 85 percent in the US.

The survey, which was conducted online between November 23, 2021, and February 4, 2022,  asked 30,000 people from 20 countries about their attitudes and behaviour relating to cryptocurrency investments in an effort to uncover trends and characterise the current state of the market.

Percentage of investors who buy and hold, and actively trade, by region. Source: Gemini 2022 Global State of Crypto report

2021 a Huge Year for Adoption in Australia and Globally

Another of the major takeaways from the report was just how big a year it was for crypto adoption – 43 percent of Australians surveyed said they first invested in crypto in 2021. Curiously, this finding contrasts sharply with a survey from Saxo Markets released late last year that found only one in 10 Australians had any idea what crypto is.

Globally, the Gemini survey found the 2021 adoption numbers were even higher – 44 percent of Americans surveyed said 2021 was the year they got into crypto, and over half of all respondents from Brazil (51%), Hong Kong (51%) and India (54%) said 2021 was the first time they’d bought crypto.

Future Looks Bright

Based on the findings from its survey, the Gemini report is bullish about the future of crypto, stating:

In 2021, cryptocurrency reached a tipping point, evolving from what many considered a niche investment into a global, established asset class.

2022 Gemini Global State of Crypto report

The report also points out that the overall crypto market capitalisation topped out at almost US$3 trillion in 2021, making crypto the best performing asset class of the past decade.

Another report released late last year by digital asset management firm Mawson was similarly positive, finding that the crypto market in Australia could grow to over A$68 billion by 2030.

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Blockchain Cardano Crypto News Institutions Investing

Institutional Demand for Cardano (ADA) Soars 50x in 2022

Since the beginning of the year, Cardano (ADA) has seen a massive 50-fold spike in large transaction volume (LTV) and, according to crypto intelligence firm IntoTheBlock, this represents a significant increase in institutional demand for the decentralised blockchain network.

IntoTheBlock stated in a tweet that such high volumes – last seen in 2018 – indicate “increasing institutional demand”.

The volume of on-chain transactions over US$100k has increased remarkably in 2022 alone. This week, a total of 69.09 billion ADA, worth US$81.4 billion, was moved in these large transactions, representing 99 percent of total on-chain volume, according to the firm.

Large transactions on Cardano: IntoTheBlock

ADA Making Waves on Many Fronts

Cardano’s Total Value Locked (TVL) has also seen a significant increase since the beginning of the year when it started off. The chain’s slow academic approach has seen its token off to a low start but as new functionality is added, the chain becomes more secure and decentralised for users.

ADA TVL. Source: DefiLama

Since smart contracts were enabled on the chain in September 2021, many developers have started building in the ecosystem. Within the first five days of the upgrade, 2,334 smart contracts were deployed on the network.

Since 2021, the average amount of active addresses has also been steadily increasing. As of January 2022, the total addresses with a balance have increased from 3.4 million to 5.05 million, pointing to an exponential increase in usage.

Total ADA addresses. Source: IntoTheBlock

Cardano’s Layer 2 – Hydra also recently started looking into implementing a burning mechanism for the token, but this has caused confusion among some members of the community. With all the progress the chain has made, many are wondering how its price has managed to stagnate:

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Bitcoin Crypto News Ethereum Investing Markets Solana

Crypto Sees Biggest Institutional Inflows This Year Driven By BTC, ETH and SOL

A report released by crypto asset management firm CoinShares shows that institutional crypto funds have seen their biggest capital inflows since December 2021, with over US$193 million pouring into the funds during the week ending March 25.

This new wave of interest in crypto investment products follows two weeks of outflows from crypto funds and coincides with a 15 percent increase in Bitcoin’s price over the past week.

European Funds, Bitcoin Lead the Way

Of the total inflows, European-based funds saw US$147 million, or around 76 percent, while a relatively paltry US$45 million went into US-based funds.

Bitcoin-focused funds were by far the most popular investment product, seeing US$97.8 in inflows, bringing total inflows since the start of 2022 to US$162 million.

Solana Funds Had Their Best Week, Most Altcoins Did Well

This was the single best week ever for Solana funds, with over US$87 million pouring in – representing 36 percent of assets under management, which now stand at a total of US$241 million. This makes Solana the fifth-largest investment product and the second-largest altcoin behind Ethereum.

Ethereum-focused funds were the second most popular altcoin, with US$10.2 million in inflows; Cardano-focused funds saw US$1.8 million; Polkadot-focused US$1.2 million, and ATOM-focused funds saw around US$800,000.

Flows by asset. Source: CoinShare

Multi-asset funds bucked the trend and recorded US$5.5 million in outflows, which was a surprise since they’ve been relatively popular recently – this being only the second week this year they’ve seen net outflows.

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Australia Banking Cryptocurrencies Investing

Commonwealth Bank Says It Intends to Heavily Invest in More Crypto-Related Services

A digital assets specialist at the Commonwealth Bank of Australia has confirmed the bank’s intentions to invest more into crypto facilities following the CBA’s highly successful launch of its in-app crypto trading service in November last year.

https://www.commbank.com.au/guidance/newsroom/Fitch-Ratings-affirms-CBA-rating-revises-outlook-201805.html
CommBank is looking to offer more crypto-related services.

Representatives from Visa, JPMorgan, Macquarie Bank and the CBA addressed this week’s Blockchain Australia Blockchain Week conference with reports of heightened consumer desire for cryptocurrency-related services. CBA’s Sophie Gilder in particular had some interesting updates to share on behalf of her bank:

According to Gilder, head of blockchain and digital assets at CommBank, her department is looking to offer additional products for both institutional and retail crypto investors. CBA’s goal is to offer enough crypto-related services to cater to the full spectrum of client needs and it is looking at ways to “double its blockchain size” in the coming months.

Aussie Banks Adapting to Crypto

In November, CBA became Australia’s first bank to support crypto purchases with its CommBank mobile app. Partnering with blockchain analytics firm Chainalysis and crypto exchange Gemini, CBA sought to provide customers with exchange and custody services, allowing users to buy, sell and hold digital assets.

Following the precedent set by CBA, ANZ acknowledged that “there is a weight of money you simply can’t ignore” in stating its belief that crypto was “here to stay” in Australia.

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Gaming Investing NFTs

Favoured Meme Stock ‘GameStop’ Confirms It Will Launch a Premium NFT Platform by July

Video game retailer GameStop, widely known as the company whose stock kickstarted the meme stock investment craze, has announced it intends to launch a premium NFT platform by the end of Q2 2022.

The planned launch date was announced in GameStop’s Q4 2021 earnings call, released on March 17. 

GameStop Eyes Crypto Opportunities

In a further sign of its increased interest in crypto, GameStop also mentioned the significant growth potential it sees in the sector in its 10-K filing, explaining:

As we scale and expand our core offerings we will simultaneously invest in additional growth, including blockchain, digital assets (including non-fungible tokens), Web 3.0 technology, and new destination formats for our stores.

GameStop K-10 Filing

Given its existing status as a well-known video game retailer, GameStop plans to focus its NFT efforts on in-game assets and other game-centric virtual assets, including character skins and in-game real estate.

NFTs Will Launch On Immutable X

Having flagged its intention to enter the NFT space in May 2021, in January 2022 GameStop announced it had chosen to partner with Immutable X its platform. GameSpot has cited Immutable X’s zero gas fees for minting NFTs and its carbon-neutral status as crucial strengths. 

Immutable X is an Ethereum-based layer-2 system built specifically for NFT trading. It uses zero-knowledge rollup technology developed by StarkWare to complete over 9000 NFT transactions per second.

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Australia Cryptocurrency Law Investing Regulation

Australian Insurers Include ‘Crypto-Asset Exclusions’ in their AFSL Policies

Australian insurance providers have begun including specific crypto-asset exclusions in their professional indemnity coverage for financial services licensees, despite a growing demand for informed crypto investment advice.

According to Jared Timms from PNO Insurance, many insurers have felt the need to clarify their stance on crypto-assets and may soon update their policies accordingly. He stated in a recent blog: 

Having spoken to the major insurers of AFS licensees, the feedback has been there is no intention to cover advice from financial planners around cryptocurrency and it is likely specific exclusions may soon start to appear on Financial Planning PI policies. 

Jared Timms, senior account manager, PNO Insurance

Timms warns: “Any financial planner considering recommending investments into cryptocurrency should think about the uninsured risk they are potentially exposing to their business.” 

Insurance and regulatory roadblocks were key topics of discussion at the Professional Planner’s Researcher Forum in Sydney last week, where some financial services firms expressed an openness to adopting digital assets. 

What Does It Mean For Crypto Investors?

Insurance industry caution indicates that financial advisers covered by these policies cannot include crypto-assets in their approved product list and therefore cannot provide any advice on these assets without exposing themselves to significant risk. 

For now, crypto investors looking for advice will generally have to continue to look somewhere other than to qualified financial advisers. Despite this, crypto in Australia continues its slow march toward legitimacy. 

Recent news such as the CommBank offering crypto services to its customers, the announcement of the first Australian Bitcoin and Ethereum ETFs, and the CEO of the ASX predicting that crypto companies will soon start to play a bigger role in Australia’s tech sector all indicate crypto is gaining ground.

Interestingly, this lack of insurance cover for advice on crypto-assets now leaves some organisations, such as CommBank, in the potentially awkward position of offering investment products on which they cannot provide any advice.

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Australia Bitcoin Crypto News Ethereum Investing Real Estate

How Crypto Helped a 23-Year-Old Aussie Climb the Property Ladder

A 2021 survey conducted by international cryptocurrency exchange Kraken found that 40 percent of Australian millennials preferred investing in digital assets over real estate.

Now a 23-year-old university graduate from Brisbane, Queensland has brought both elements together by using cryptocurrency to break into the city’s soaring property market.

Economics graduate and new homeowner Loi Nguyen. Source: news.com.au

Loi Nguyen first started investing in crypto in 2017 during his second year of an economics degree. After graduating from high school he had worked full-time as a bank teller for a gap year on a miserly salary of just A$28,000. But the best economic lesson he learned in that time came from observing his customers in the bank.

“I saw people being diligent with their savings and also saw people being very reckless,” Nguyen said. “You had people consistently putting savings away every week and others putting stuff on the stock market.”

Starts With ‘a Couple of Hundred Bucks’ Worth’ of Crypto

Nguyen augmented his own meagre savings by investing in stocks and cryptocurrencies, buying “a couple of hundred bucks’ worth” of bitcoin and ethereum in 2017. When the crypto market crashed a year later, he thought he’d done his money.

Crypto came back into my life when I learned about inflation at uni, and how bitcoin could be disinflationary. I was earning less than half a per cent on my savings account at the bank and wanted to protect my purchasing power … I knew I had to be smart, otherwise I would never break into the property market.

Loi Nguyen, economics graduate and new homeowner

When Covid-19 hit in 2020, crypto started to pick up again as panic hit more traditional markets. Nguyen spent an estimated A$18,000 over the ensuing months until he owned an entire bitcoin, then continued to invest in BTC and ETH.

The one-bedroom apartment Nguyen bought using crypto. Source: news.com.au

Before purchasing his one-bedroom inner-city apartment this year for A$430,000, Nguyen cashed out A$43,000 in cryptocurrency, less than half his overall portfolio, for the deposit on a home loan.

I’ve always wanted to own my own property and to be able live in it. Cryptocurrency allowed me to do that earlier.

Loi Nguyen, economics graduate and new homeowner

Crypto Millennials Aim to Retire at 50

According to a survey conducted by Pearler last May, a “significant number” of Australian millennials intend to retire at the age of 50 using their investments in exchange-traded funds (ETFs) and cryptocurrencies. Nguyen is one such millennial who seems well on the way.

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Bitcoin Mining Digital Asset Mining ETFs Investing

Investors Can Now Get Exposure to Crypto Mining With Newly Launched ETF

Global investment manager VanEck has launched a Digital Assets Mining (DAM) ETF, an exchange-traded fund customised to expose investors to firms within the DAM ecosystem. The fund will not directly invest in digital assets, rather it seeks to highlight the importance of miners.

VanEck’s DAM ETF is set to put a minimum of 80 percent of total assets into crypto mining securities, with the potential to earn at least 50 percent of their revenue from DAM activity. The ETF will be tracking the MVIS digital assets mining index closely, offering a net expense ratio of 0.5 percent.

Ed Lopez, head of product management for VanEck, has a lot of time for crypto miners:

https://www.linkedin.com/in/helopez/overlay/photo/

Blockchains introduce transparency, efficiency and lower costs compared to traditional centralised databases and processes, but without miners, blockchain transactions cannot be verified and audited, making their role absolutely essential.

Ed Lopez, head of product management, VanEck

The VanEck DAM ETF follows asset manager Valkyrie’s bitcoin miners’ ETF, WGMI, a fund focusing predominantly on crypto miners using renewable energy.

Crypto Mining in the Greater Industry

Since October 2020, Aussies have been able to get increased exposure to crypto through blockchain mining investments. With local crypto trading volume increasing during the pandemic, crypto mining has offered an alternative, lower-risk method of participating in the market without losing any savings.

The crypto mining process is linked to every transaction that takes place, and it is integral to ensure miners are properly compensated for their efforts. If you’d like to understand more about the mining procedure, check out our guide to bitcoin mining.

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Australia Crime Crypto News Investing

Aussie ‘Arbitrage King’ Claims Bullies Led Him to Commit $100+ Million Crypto Fraud

Australian-born former crypto hedge fund manager Stefan He Qin, who last weekend began his seven-and-a-half year sentence in a US federal prison for securities fraud, says he lied about his investors’ returns “to avoid being bullied”.

In a frank YouTube interview (see below) just days before he began his custodial sentence, Qin claimed that defrauding Australian and US investors of US$90 million between 2017 and 2020 was the end result of bullying during his teen years at a Canberra high school, adding that he felt “immense pressure” to succeed because of his Asian heritage.

Not Just Bullies, It’s the Peer Pressure

“There’s probably, like, this huge insecurity in the Asian community to just be as successful as possible at all costs,” the first-year university dropout said. “And … it’s not even about the money – it’s just [about] looking good.” Qin added: 

I felt immense pressure to inflate the returns and to just lie because I needed to match [investors’] expectations. They have this image in their head of this wunderkind who could make them a lot of money, and unless I met that image, I was a failure, right? And maybe I’d go back to being bullied; maybe people would go back to making fun of me and I would never have friends again.

Stefan He Qin

‘This is Where Greed Gets You’

Qin pleaded guilty to one count of securities fraud and was last September sentenced in a New York District Court to seven and a half years in prison. Qin had masterminded a brazen and wide-ranging Ponzi scheme while he owned and controlled two Manhattan-based cryptocurrency investment funds over a three-year period until 2020.

The so-called “Arbitrage King” (buy low, sell high!) used the proceeds to fund personal expenses, including the rented $US24,500-a-month New York City apartment in which the YouTube interview was filmed. “This is where greed gets you,” Qin says offhandedly at one point during the video, gesturing towards floor-to-ceiling views of the Manhattan skyline.

While serving his time, Qin intends to write a book and expresses a long-term ambition to return to Australia and become a politician. Some might say he’s eminently qualified.

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Bitcoin Crypto News Gold Investing

Billionaire Bill Miller Admits 50% of His Net Worth is in Bitcoin

Against a macro backdrop of structurally low interest rates and rising inflation, it seems that every few weeks a billionaire comes out to declare a Bitcoin position.

The latest is Bill Miller, a fund manager with more than 40 years’ experience in financial markets. Unlike his peers, Miller isn’t diversified – over 50 percent of his net worth is in Bitcoin.

Former Value Investor Turned Bitcoin Bull

In traditional financial markets, Miller enjoys legendary status after his record-beating 15 consecutive years of outperforming the S&P 500 index.

In a video interview with Wealth Track published last week, Miller revealed that 50 percent of his personal assets were in Bitcoin and related investments – a far cry from the “1-2 percent” recommended by fellow investment heavyweight Ray Dalio.

Despite previously disclosing a Bitcoin position, Miller had, until now, shunned the “Bitcoin bull” label, preferring instead to call himself “a Bitcoin observer” – one who is watching the trajectory of Bitcoin as a new technology relative to other game-changing technologies like the printing press, steam engine, automobile or electricity. In his view, Bitcoin is following a well-understood path for the adoption of new technologies.

When asked about why he went so big on Bitcoin, he noted:

It goes against many of the tenets of financial discipline. On the other hand, the people that actually are the richest people in the country all are massively concentrated. You know, Buffet in Berkshire, Bezos, Mark Zuckerberg … they’re not widely diversified, they are highly concentrated and I think that’s because they have a high degree of confidence in the value of those investments.

Bill Miller

Speaking to the question of intrinsic value and whether Bitcoin had any, Miller suggested it was best viewed as digital gold:

It comes down to, at the very basic level, to supply and demand. Bitcoin is the only economic entity where the supply is unaffected by demand. So even with gold, which is $1,800 today, if gold goes to $18,000, there’ll be a lot more gold mined because mines that are unprofitable will become profitable.

Bill Miller

Miller said he personally started buying Bitcoin at around US$200 in 2014 after hearing a talk by Wences Casares, and then continued to buy more over time.

After stopping for number of years, he then decided to get back in when Bitcoin dipped to US$30,000, saying “there’s a lot more money going into it in the venture capital world, and there are a lot of people who are sceptics who are now at least trying it out”.

Despite being heavily concentrated, Miller’s recommendation to average investors is to put 1 percent of their net wealth into Bitcoin because “even if it goes to zero, which I think is highly improbable, but of course possible, you can always afford to lose 1 percent”.

I think the average investor should ask himself or herself, what do you have in your portfolio that has that kind of track record – number one, is very, very under-penetrated; can provide a service of insurance against financial catastrophe that no one else can provide, and can go up 10 times or 50 times? The answer is: nothing.

Bill Miller

At 72 years of age, it’s impressive that Miller has been involved in Bitcoin since 2014. Staying ahead of the technology curve is difficult, but what makes his investment ever more impressive is that he seemingly beat countless tech entrepreneurs to the punch, including Peter Thiel.