By Kyle Rankin

1. Up to 20% of Aussies and

10% of Kiwis have bought crypto According to New Zealand’s Financial Markets Authority one in 10 Kiwis hold some form of cryptocurrency. For Australians, Roy Morgan research found in June this year, more than one million are investors in cryptocurrency such as Bitcoin, Ethereum and Dogecoin (Elon Musk’s favourite digital currency). But CoinSpot’s recent survey puts the figure at more than one in five Australians who have bought, sold, swapped or traded crypto over the past four years. Ordinary folk have made a little cash from their investments, some have made a lot and some have made a motza.

In 2013, then 22-year-old Queensland university student Daniel Maegaard invested A$4000 in cryptocurrency and through a bit of luck, timing and smart reinvestments, has accrued a fortune in excess of A$15 million, according to a 2021 TIME article.

2. 2021 was a year of highs – before the falls

The ups and downs of cryptocurrency are dramatic. Ethereum launched in July 2015 at just under US$1, reaching its first serious high in March 2016 at US$15. In August 2022 it was valued at US$1564. Meanwhile, Binance Coin, launched in 2017 at a lowly price of US$0.10 was valued in August 2022 at about US$284. If you invested five years ago, it was 10 cents well spent. Global events including inflation and the winding down of pandemic measures in the US and elsewhere saw Bitcoin suffer a 70% drop in July this year, falling to just over US$19,000. Its all-time high was above US$65,000 in November 2021.

3. Founders have made lots and lost lots

Many cryptocurrency founders have become billionaires, but in the whimsical world of crypto, what may seem like easy come, is also easy go. One example is Changpeng Zhao, aka ‘CZ’, the founder of Binance. His privately owned company, registered in the Cayman Islands, sees the reporting of his wealth range from US$11 billion to US$65 billion. Zhao has commented about the speculation by tweeting, “I only count what’s in my wallet, which is not much at all. The rest are all opinions.”

4. There are tax implications

Cryptocurrency investment is purely speculative. There are no company stocks increasing and decreasing share prices linked to company performance. So, is cryptocurrency regarded as cash or some other form of investment? The Australian Taxation Office treats it the same way it does shares and other investments, and it is generally regarded as a capital gains tax asset.

Danny Talwar ACA (ICAEW) from crypto tax platform Koinly says for tax purposes, “It’s important to understand the intentions of holding and trading in order to be able to differentiate between an ‘investor’ and ‘trader’. How people are trading crypto and the utility that it provides to them will differ on a person-by-person basis.”

5. Do investment opportunities still exist?

Yes and no, according to fintech journalist Tom Rodgers who, due to wild fluctuations and global price crashes suggests, “Watch what sophisticated investors are buying.” Crypto optimism has US superannuation firm Fidelity planning to offer Bitcoin as an investment choice, while in Australia, ASX-listed company DigitalX pays its chief executive, Lisa Wade, 5% of her after tax salary in Bitcoin. This move to the mainstream is demonstrated by the countries preparing to be ‘crypto ready’. Hong Kong has 149 crypto ATMs with an overall crypto readiness of 8.6 out of 10, followed by the US with 33,720 ATMs scoring 7.7, and Switzerland with 152 machines and 7.5 preparedness. The time is nigh when consumers will be able to use crypto for everyday purchases.

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