Exchange Coinbase has big plans to develop services targeting Australia’s $600 billion self-managed retirement sector, Bloomberg reports.
The largest U.S. cryptocurrency exchange is to develop a customized service to tap into unmet demand for crypto products, Coinbase’s Asia-Pacific managing director John O’Loghlen confirmed.
„Self-managed super funds can simply make one allocation, set it and forget it. We’re working on an offering that would allow us to really serve these customers well on a one-time basis – so they can trade with us and stay with us.”
Self-managed pension portfolios account for a quarter of Australia ‘s $2.5 trillion pension system, according to the latest data from the Australian Taxation Office . They include 1 billion Australian dollars ($664 million) allocated to crypto assets, down from a peak of 1.5 billion Australian dollars in 2021.
The decline can be attributed to some institutional money managers in Australia holding back from the cryptocurrency sector, given its past scandals and high volatility . However, recent developments, such as talks to launch cryptocurrency exchange-traded funds (ETFs) in Australia and the rise in the price of Bitcoin, have significantly increased the number of cryptocurrencies held in a self-managed pension fund.
Australia’s DIY pension industry lost millions on cryptocurrency bets
Michael Houlihan, head of a private wealth management firm, has publicly warned investors to avoid large stakes in risky assets.
„You wouldn’t want a significant portion of your portfolio tied up in something so high risk,” he noted. Investors interested in cryptocurrencies are typically those in their 40s and with low account balances, Houlihan added.
This has happened in previous cases, for example, in 2023, thousands of Australians who used DIY pension funds to bet on cryptocurrencies suffered hundreds of millions of dollars in losses.
Such risky bets jeopardized their savings in a program originally set up to provide adequate retirement income. According to a Reuters analysis last year, these bets fall outside the purview of the prudential regulator, which oversees professionally managed funds.
In other parts of the world, the free DIY pension industry is subject to some regulation. In the UK , self-managed pension funds are not allowed to invest directly in Bitcoin or other cryptocurrencies.
