Despite all the ups and downs and huge swings in value, three quarters of Australians who have invested in cryptocurrency still managed to make a profit off their investment.

In the past 12 months, Australians on average made over $10,000 in profit from their cryptocurrency investments. This amount is equivalent to almost two months of the average Australian salary.

All in all than three quarters of Aussies made a profit from their crypto investments over the last year too, according to research from YouGov, with the average profit adding up to $10,662.

The recent survey also found that one in five Aussie cryptocurrency holders admitted that they made a massive amount of profits worth over $30,000.

The data showed that Australian parents who had children under the age of 18 living at home were the most likely to make money from their cryptocurrency trading, with 86 per cent reporting a profit that added up on average to $12,428.

The crypto market has run hot over the past 12 months year, said Swyftx head of strategic partnerships, Tommy Honan, an Australian cryptocurrency exchange with more than 320,000 customers, which commissioned the recent survey.

“Even though we’ve just come out of a dip in the market we’re still seeing a lot of Aussies reporting profits on their trades over the last 12 months. Aussie millennials and Gen Xers saw especially big returns, with around one in five saying they made more than $20,000 over the last year from cryptocurrency. Aussie mums and dads appear to have been especially successful, as well as men in general and crypto users who report a strong or some understanding of the market,” said Tommy Honan.

The survey revealed that, men achieved an average of $11,357 profit on their cryptocurrency over the past 12 months, while women achieved an average of $9,176.

In terms of geographical location, cryptocurrency users in Brisbane were the most likely to report a profit with 83 percent making money, followed by Sydney and Melbourne at 76 percent and then Perth.

Mr Honan said that he expects to see further improvements in the market this year following a market fall in May and June.

“Experienced investors have been buying the dip in the expectation that Bitcoin could hit the US $100,000 price by the end of the year,” said Tommy Honan.

However, if you’re new to crypto, Mr Honan said it’s best to do your research before buying.

The group that were least likely to report a profit on their crypto holdings over the last year were people who said they had little or no understanding of the market.

“At the moment, this is a relatively small proportion of crypto users in the country, just 16 per cent report?having?little or no understanding. But for this group and anyone who wants?to grow their confidence, it really is essential to do your research. Pro tips are to research the team behind any digital assets you are thinking of buying, and also look at indicators like the size of a coin’s market and its liquidity,” said Tommy Honan.

The survey also found that only one in four Australia hold or have held cryptocurrency in the past.

How SMSF’S Can Buy And Sell Cryptocurrencies

Australians who are wanting to invest in cryptocurrencies for your SMSF will need a secure digital wallet. A digital wallet similar to a bank account in the crypto world. You will also need an account with a crypto exchange, the crypto equivalent of an online broking account.

There are dozens of digital wallet providers, but only a few are genuinely suitable for SMSF investors. Cold wallets such as Ledger and Trezor are most compliant with super regulations. They are also more secure because they allow you to store cryptocurrency offline with a private key.

While some crypto exchanges offer a default wallet, these are less secure than cold wallets. Like all SMSF investments, your SMSF cryptocurrency must be kept separate from your personal cryptocurrency assets.

It is crucial for SMSFs to choose an Australian-based crypto exchange that accepts and recognises SMSF investments. There are about six exchanges that accept and recognise SMSFs, with ZebPay and EasyCrypto among the cheapest and easiest to use. Brisbane-based Ainslie Wealth has a store front for those who are more comfortable transacting in person. Expect to pay trading fees ranging from 0.4–1% of each transaction, as well as account fees.

Preferably, you should set up a single digital wallet for all your fund’s cryptocurrency transactions to make record-keeping as simple and transparent as possible.

You will be able to use the Australian dollars in your SMSF’s bank account to buy cryptocurrencies. Whenever you decide to sell, cryptocurrencies can easily be converted to Australian dollars. It’s crucial to remember though that the proceeds of SMSF cryptocurrency investments are just like any other superannuation investment. They can’t be accessed until fund members reach their preservation age. A member’s preservation age is between the ages of 55 and 60, depending on their date of birth.

The proceeds received from cryptocurrency sales should be transferred to your SMSF’s bank account so you can declare any profit or loss you’ve made on any cryptocurrency transactions as part of your fund’s annual reporting obligations to the Australian Tax Office (ATO).

The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 07 36086800. 

The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)

Post Author: Craig Dangar

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