It's not that long ago that cryptocurrencies such as Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) were niche investments favoured by the tech-savvy or those with a high tolerance for risk.
But cryptocurrencies, or crypto for short, have rapidly become mainstream, with fluctuations particularly in Bitcoin reported on in the mainstream business press alongside the price of gold and major shares.
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Crypto comes into the mainstream
Institutions have increasingly been willing to invest in cryptocurrencies, while retail investors are also investing heavily. New research from CoreData shows that 12% of adult Australians now have crypto investments, making it the third most popular investment, behind Australian shares and cash.
It also means that more Australians are now invested in crypto than in the real estate market (excluding the principal place of residence), with just 6% of investors putting money into bricks and mortar – a big swing from last year when real estate came in third.
The CoreData white paper, released recently, states that cryptocurrencies are increasingly becoming mainstream.
Once viewed as a speculative niche, CoreData's research finds crypto assets like Bitcoin and Ethereum are increasingly being integrated into the portfolios of everyday Australians. While cryptocurrencies remain a relatively young asset class, they are now over a decade on into their maturity, and market participants increasingly recognise them as a lasting fixture of the financial landscape. This shift is evident in the rise of institutional investment seen globally in recent years, as leading asset managers, pension funds, and banks expand their exposure — not only through direct holdings, but also via custody solutions, tokenised assets, and blockchain-enabled financial services.
Digital Wealth Group founder Sydel Sierra said she wasn't surprised by the findings of the CoreData research.
Ms Sierra added:
It's just too hard to argue with the returns. Bitcoin's compound annual growth rate over the past year is 75%; to put that in perspective, S&P 500's return in that same period was 15%.
ETFs lead to easy investing
One of the key drivers of cryptocurrency growth, the report states, is the ability for investors to purchase crypto exchange-traded funds (ETFs), rather than having to buy the assets directly via a crypto exchange.
Following ETF approvals in the U.S. and Europe, similar products such as the Global X 21Shares Bitcoin and Ethereum ETFs gained momentum in Australia, attracting interest from self-managed super fund (SMSF) trustees and financial advisers seeking new avenues for diversification.
Bitcoin ETFs available on the ASX include the aforementioned Global X 21Shares Bitcoin ETF (ASX: EBTC), the VanEck Bitcoin ETF (ASX: VBTC), and the Monochrome Bitcoin ETF (ASX: IBTC).
Like other ETFs, the provider charges a management fee, with the Global X ETF charging a fee of 0.45% for example.
That ETF holds Bitcoin on the Coinbase exchange and, as of the end of September this year, had $256.5 million invested.
The CoreData white paper says Bitcoin is the most favoured cryptocurrency, held by 78% of Australian crypto investors, which is not surprising given it has developed over time into a "trusted store of value''.
Other popular crypto investments include Ethereum, Ripple (CRYPTO: XRP), and Solana (CRYPTO: SOL).
As the report says:
For many, trust in Bitcoin stems not only from its historical performance and longevity, but also from the belief that it is more decentralised than other cryptocurrencies. Bitcoin's fixed supply of 21 million coins has also earned it comparisons to gold, a trait known as 'digital scarcity'. These distinctions have led many to argue that Bitcoin belongs in a class of its own.
