Crypto coins a byte tricky

A RISING tide of Australian investors forced to fly blind while buying into the global cryptocurrency craze has led to calls for the federal government to look at regulations to help “realise the benefits of the digital economy”.

Financial planners remain cool on crypto, and most cannot advise on it because digital currencies remain off their approved product lists despite surging public interest.

This lack of professional advice hasn’t stopped an estimated 20 per cent of Australians from diving in, lured by spectacular price gains.

Given the take-up, the federal government is being encouraged to put in place new regulations for crypto.

A recent Senate report, Australia as a Technology and Financial Centre, said serious regulatory reform was needed, with committee chair and Liberal Senator Andrew Bragg saying Australia “needs to be better and stronger in this space”.

Cosmos Capital director James Manning also said “crypto assets are rapidly becoming a growing financial asset class” and the government should be discussing regulations with stakeholders.

“Australian retail investors are investing in markets that have little or no regulation at all,” Mr Manning said.

“This stops neither retail investors from investing in them nor unscrupulous offshore operators from taking advantage of the system.”

In the past year Bitcoin, the sector’s biggest fish, has jumped more than 400 per cent to $71,646, while No.2 crypto Ethereum surged 1600 per cent to $5094. Former joke currency Dogecoin’s rise has been astronomical, from onethird of a cent to 58c.

Financial advisers and crypto specialists agree the sector is volatile, high-risk and should form, at most, 10 per cent of an investment portfolio.

Jody Sha, 28, has held cryptocurrencies since 2017 for “diversification”.

“I like to investigate and monitor interesting asset classes and explore their value proposition, as well as growth and mainstream potential,” she said.

Ms Sha’s top tip was “don’t invest what they can’t afford to lose”.

“A little exposure to the semi-unknown doesn’t hurt, as long as you have your other bases covered,” she said.