Terry and Justine Sanders stand out from the typical cryptocurrency investors. The couple represents a small yet growing segment of senior Australians who are venturing into crypto in a risky bid to enhance their retirement funds. Hailing from Sandgate in bayside Brisbane, they revealed that they invested $48,000 in Bitcoin back in 2019. After cashing out four years later, they reported earnings nearing half a million dollars, a success that Ms. Sanders claims has transformed their lives.
“We don’t disclose our crypto activities to most people our age,” the 79-year-old shared. “Those who do know think we’ve lost our minds.” However, following their success, they anticipated a shift in perceptions.
Growing Interest Among Seniors
Research conducted by cryptocurrency exchange Independent Reserve suggests that approximately 6.5 million Australians have engaged with these volatile digital currencies. The exchange noted that the ownership rate among baby boomers has surged fourfold over the past six years. Their recent annual survey, which included 2,000 participants, indicated that the share of Australians aged 65 and older who own cryptocurrency rose to 8.2 percent, a notable increase from just 2 percent in 2019. Furthermore, the proportion of respondents with self-managed super funds expressing interest in investing in Bitcoin has also doubled during this timeframe.
Bitcoin’s Price Volatility
The value of Bitcoin, recognized as the first and most widely used cryptocurrency, has skyrocketed from $5,000 in 2019 to around $170,000, experiencing numerous fluctuations throughout this period. The market’s volatility has been particularly pronounced, especially in light of recent political events, such as Donald Trump’s re-election campaign, which has driven Bitcoin’s price to new heights.
Despite its potential as a decentralized alternative to traditional banking systems, Bitcoin is seldom accepted for transactions in everyday life. While some individuals have amassed considerable wealth, the crypto landscape is also littered with cautionary tales, a phenomenon colloquially referred to as “getting wrecked.” The Australian Securities and Investments Commission (ASIC) has categorized cryptocurrency as a “very high-risk” investment, with Commissioner Alan Kirkland cautioning that the market’s unpredictability renders it unsuitable for retirees who typically seek stability. “You might strike it lucky, but there’s also a significant risk of rapid financial loss,” he warned.
Withdrawal of Superannuation Funds
While many seniors are investing relatively small amounts, industry insiders have noted that some retirees are withdrawing funds from their superannuation to invest in cryptocurrencies. Mary Delahunty, CEO of the Association of Superannuation Funds of Australia, emphasized that fund managers conduct extensive due diligence, and retail investors should likewise research thoroughly before diving into crypto investments. “There have certainly been individuals who have successfully navigated the cryptocurrency surge, and if they are comfortable with the associated risks, it may be a viable part of a diversified investment portfolio,” she stated.
Accessibility of Cryptocurrency Investing
Sydel Sierra, a self-proclaimed crypto coach, operates an online consulting service aimed at guiding prospective investors, including the Sanders. “The entry barriers are quite low,” she explained. “Anyone equipped with a computer and internet access can participate.” However, businesses like Sierra’s that offer investment advice in cryptocurrency are not mandated to obtain a financial services license, as cryptocurrencies do not fall under the classification of financial products according to Australian law.
At 36 years old, Sierra reported that approximately one-third of her 700 clients are over 60, with most retirees having learned about cryptocurrencies through their adult children. She indicated that half of her clients have invested at least $60,000 in digital assets, and around 10 percent have portfolios exceeding $300,000—a trend that continues to rise. “Baby boomers and retirees are clearly taking note of the gains that millennials are achieving, leading to a sense of FOMO (fear of missing out),” she noted. “They want to get involved.”
Risks and Scams in the Crypto Market
The largely unregulated nature of cryptocurrencies creates a breeding ground for fraud and scams. Without specific legislation, ASIC has had to rely on existing laws, such as the Corporations Act, to address violations. During the last financial year, the Australian Financial Complaints Authority recorded over 200 complaints related to cryptocurrency, a figure expected to rise as more Australians engage with digital currencies.
According to the Australian Federal Police, Australians lost $170 million to crypto scams in 2023, with little chance of recovery for most victims. Kirkland highlighted the lack of consumer protections for those deceived by unscrupulous operators, stating, “If something goes awry, you won’t have the same rights as you would with a conventional financial institution.”
This article does not constitute financial advice. Individuals should seek independent financial guidance tailored to their specific circumstances if they have concerns about their financial situation.
