Research reveals baby boomers, retirees invest in cryptocurrency

Terry and Justine Sanders are not typical cryptocurrency investors.

The couple could be part of a small but growing number of senior Australians turning to crypto in a high-risk attempt to boost their retirement savings.


The pair, from Sandgate, bayside Brisbane, said they bought $48,000 worth of Bitcoin in 2019.

They said they made almost half a million dollars after cashing out four years later, which Ms Sanders said had changed their lives.


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Terry and Justine Sanders turned a $48,000 investment in Bitcoin into a half-million-dollar windfall. (ABC News: Michael Lloyd)


"We don't tell most people our age that we are doing crypto," the 79-year-old said.

"The few that we told thought we had absolute rocks in our heads."

After their success, they felt like that was going to change.


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Terry and Justine Sanders say they made a life-changing investment in Bitcoin. (ABC News: Michael Lloyd)


Research by cryptocurrency exchange Independent Reserve estimates as many as 6.5 million Australians have invested in the volatile digital currencies.

The online trading platform said ownership rates among baby boomers had quadrupled over the past six years.

Its latest annual survey of 2,000 people found the number of Australians aged over 65 who had owned crypto increased to 8.2 per cent, albeit from a low base of 2 per cent in 2019.

The number of respondents with self-managed super funds who said they would like to invest in Bitcoin doubled during the same period.


Boom or bust

The price of Bitcoin — the oldest and most popular cryptocurrency — has increased from $5,000 in 2019 to about $170,000, with a series of booms and busts along the way.

But despite its promise as a decentralised store of wealth that bypasses the big banks, it is rarely accepted as a payment method in the real world.

Some people have become rich but for every success story, there has been a cautionary tale.

In the crypto world there is even a term for it: getting wrecked.

The Australian Securities and Investments Commission has classed cryptocurrency as a "very high-risk" investment.

ASIC commissioner Alan Kirkland said cryptocurrency was prone to crashes, making it a poorly suited investment for retirees who needed stability.

"You might get lucky but you might also lose a lot of money very fast," he said.


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Alan Kirkland says there are risks with cryptocurrency. (ABC News: Scott Preston)


While most seniors were investing a modest amount, industry insiders said some pensioners were withdrawing from their super to bet on crypto.

Association of Superannuation Funds of Australia chief executive Mary Delahunty said fund managers conducted an "enormous" amount of due diligence and retail investors should do the same before they bought cryptocurrency.

"There have certainly been people who have been able to ride the cryptocurrency wave quite high and if they are happy with that risk then it can form part of a diversified portfolio," Ms Delahunty said.


Cashed-up customers

Self-styled crypto coach Sydel Sierra runs an online consulting business that advises would-be investors, including Mr and Ms Sanders.

"It has a very low barrier to entry," she said.

"Anyone with a laptop or a computer and an internet connection can get involved."

Businesses like Ms Sierra's that provide advice on cryptocurrency investments are not required to hold a financial services licence.

That is because cryptocurrency is not classified as a financial product under Australian law.


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Sydel Sierra runs a consultancy business to advise new crytpo investors. (ABC News: Mackenzie Colahan)


The 36-year-old said she surveyed her 700 clients and found a third were older than 60 and most retirees had heard about cryptocurrency from their adult children.

She said half her clients had at least $60,000 invested in crypto and 10 per cent had a portfolio of more than $300,000, and that figure was increasing.

"Baby boomers and retirees are obviously looking at the types of gains [millennials] are getting and there's a bit of FOMO," Ms Sierra said.

"They want in."


Crypto wild west

Cryptocurrencies are largely unregulated, which makes them fertile ground for fraud and scams.

With no dedicated laws, ASIC has been left to regulate by enforcement of breaches of existing laws such as the Corporations Act.

In the last financial year, the Australian Financial Complaints Authority received more than 200 complaints about cryptocurrency, but said it expected that number to rise in coming years with an increase in uptake.


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Bitcoin and Ethereum are cryptocurrencies. (Reuters: Dado Ruvic)


Australians reported losing $170 million to crypto scams in 2023, according to the Australian Federal Police, which said the money lost was rarely recovered.

Mr Kirkland said there was little recourse for people who fell victim to a dodgy operator.

"If something goes wrong you don't have the same consumer protections," he said.

"[You don't have] the right to make a complaint and the right to go to an independent body that you would have if you were dealing with a more traditional financial firm."

This article is not financial advice. If you are concerned about your own financial situation you should seek independent, personal financial advice that takes account of your own individual circumstances.

Written by Mackenzie Colahan, ABC News.
 

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I worked too hard for my money to take such a risk.
Like any investment, if you want to take the risk that is your prerogative.

What annoys me is the people who put their cash in so called high return investments and then start screaming and expecting the government to take action to get their money back when the whole thing goes pear shaped.
 
The ones who got in early with a small amount and cashed out when it was a decent amount were lucky. Most keep wanting more then lose it all. There is no safety net with this and I would not be prepared to lose hwrd earned money like that. Slowly surely in managed funds for me.
 
And as soon as you withdraw anything from it, the ATO knows. And tax you accordingly. Yep, they have their grubby paws on everything you do with your hard earned money.
 
  • Wow
Reactions: Sherril54
All I know is, that if my bride & self jumped into the crypto world, not only the shirts off our backs ,but our "Duds", undies, socks & boots as well, we would lose.

If you didn't get involved with a 'Tiny" investment when it all started back when bitcoin was .0003c/, or was it .00003c/bitcoin, it's, maybe a 'Tad" late to start now.

I must admit, I really reckon that bitcoin will certainly grow in value. All very much too late for us.

Isn't hindsight a wonderful thing.

We are in the same boat as "darrellh", but, where we take an extremely active interest being involved in the most extremely volotile sector of what's available to be invested therein with our fund.

This is trying to capitalise on any gains as the markets are just to hard to predict.

I even made a written suggestion to our fund, that a new look in investments should be looked at for choices. And i.e., a "Precious Metal" portfolio, incl., gold, silver, uranium for starters, &, would you believe, "Crypto" as well.

I wont go into the reply we rec'd back. It was all about the "Same Old Thing", with how our monies are invested.

As Warren Buffet preaches, "Be greedy when everyone panicks, & be wary when everyone's greedy".

We are riding out the current situation & staying put where we are.

Just going off a tad, if I may, as the experts say, "If anyone has a housing mortgage, if you can handle your current payments before the latest drop of the interest rates, keep your same payments up so that the excess goes strait off your capital".

Unfortunately, a lot of the ones that are really struggling, that thought can't be acted on.
 
I worked too hard for my money to take such a risk.
Like any investment, if you want to take the risk that is your prerogative.

What annoys me is the people who put their cash in so called high return investments and then start screaming and expecting the government to take action to get their money back when the whole thing goes pear shaped.
Correct. NO Asset backing at all. COMPLETELY dependent on continuing purchases. As a Retired Financial Planner, do not touch.
 
Who with half a brain would "invest" in a dodgy unregulated scheme ripe for the picking by scammers?

When one person make money, somebody elsewhere loses an equivalent amount.

Be better off putting $1000 on the favourite at Randwick in Race 5!
I just blew $1000. The favourite, Wuddzz, came second in the PF Civil Handicap. Bugger!!
 
  • Haha
Reactions: Sherril54
Correct. NO Asset backing at all. COMPLETELY dependent on continuing purchases. As a Retired Financial Planner, do not touch.
Totally agree with you gordon1940...no asset backing at all. Why do I always think Ponzi scheme when I hear cryptocurrency.?? I see where POTUS is exploiting this as well. Quite disgusting in my view.
 
  • Wow
Reactions: Sherril54
My son in law bought a bitcoin years ago now, must have been in the early days….He’s happy to let it run though…. He has bought some things and a couple of years ago when they went travelling, he paid for all the accommodation they stayed in on the Scotland part of their holiday, with bitcoin….I can’t remember how much his original bitcoin cost, but the value is constantly fluctuating and he’s okay with that…..He has time on his side though and he’s really clued up with it all, but he’s definitely reaped some benefits….
 
  • Wow
Reactions: Sherril54
My son in law bought a bitcoin years ago now, ? have been in the early days….He’s happy to let it run though…. He has bought some things and a couple of years ago when they went travelling, he paid for all the accommodation they stayed in on the Scotland part of their holiday, with bitcoin….I can’t remember how much his original bitcoin cost, but the value is constantly fluctuating and he’s okay with that…..He has time on his side though and he’s really clued up with it all, but he’s definitely reaped some benefits….
Like any ponzie scheme, when it runs out of buyers it will collapse

If he "let's it run" too long he will collapse with it.

Does he not understand how a ponzie scheme works .
 
Like any ponzie scheme, when it runs out of buyers it will collapse

If he "let's it run" too long he will collapse with it.

Does he not understand how a ponzie scheme works .
I don’t know what cryptocurrency platform he’s with, but he is a very clued up individual and knows all the risks ….he doesn’t trade but keeps an eye on any movement, although he does spend from it from places that accept bitcoin. It’s not a principle source of income for them nor is it a nest egg for the future. He’s had his initial investment of years ago returned. He knows what he’s doing . Cryptocurrency is not a Ponzie scheme in that investors don’t receive payments coming from newer investors….I did a little bit of research about that just to be sure…….However there probably are some dodgy deals being done by scammers if you fall into that trap……It’s a revolutionary form of money that challenges the way the world thinks of banks and financial institutions …..It is a very volatile market and one that the good old ATO are recently trying to target for taxes based on a perceived amount of profit……perceived because no one can know how much profit or indeed loss, an individual is likely to have in any given time frame…..
 

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