A recently published survey showed that almost 1 in 10 Australians are currently investing in cryptocurrency. Despite crypto becoming a more common investment most people still view it as a very risky investment and its riskiness is one of the reasons why they are willing to invest.
Despite plenty of stories being told about early adopters making fortunes by trading cryptocurrency, most Australians buying into the digital currency say that it is just for a bit of fun.
Covid-related boredom might have also played a part, with 60 percent of Australians that trade cryptocurrency having started within the past 12 months.
Overall, trading crypto appears to be far more popular with young people than the older generations. On top of this males are three times more likely than females to already be invested in crypto.
According to the study, 19 percent of Gen Y are getting involved, compared to six percent of Gen X and just four percent of Baby Boomers have so far decided to invest in cryptocurrency.
Out of all the people surveyed, 60 percent said that they believe crypto is a “very risky” investment and 51 percent said there is a lack of transparency and regulatory accountability.
Others are taking the potential rewards more seriously, with 46 percent believing their investments hold long term growth opportunities and 32 percent have invested for short term returns.
Privacy of transactions 21 percent and trusting crypto over other financial assets 16 percent were also popular reasons for deciding to invest.
Furthermore, those of us who still don’t really understand what cryptocurrency is are far from alone even among people who have put their money in it.
Around 38 percent of cryptocurrency investors admitted to having little or no understanding of how cryptocurrency actually works.
“It is concerning that many investors do not fully understand what they are investing in and don’t have the appropriate risk profile to allow them to invest in such volatile markets. Cryptocurrency is very speculative, and people need to conduct their own research and seek advice before investing,” says Whitely Bradford, a financial literacy specialist at Griffith University.
The Majority of Australians Still Lack Clear Knowledge About Cryptocurrencies
Despite Bitcoin and Ethereum continuing to rise in popularity, as well as the possibility for the Australian Government to introduce its own digital currency, the majority of Australians surprisingly know very little about cryptocurrencies.
A recently published survey showed that only one in 10 Australians believe that they understand what cryptocurrency is. When looking at the figures for Australians aged over 65 the percentage of this group was even lower than 1 in 10.
As well as age playing a huge role in the knowledge of cryptocurrency, gender also plays a massive role. 21 percent of Australian men believe that they know what cryptocurrencies are and how they work, in comparison, only seven per cent of women said that they understand cryptocurrencies.
There are over 10,000 different cryptocurrencies in the world today. In this survey, Bitcoin was predictably the most well-known of all the cryptocurrencies with 38 per cent of Australians surveyed recognising the name which is synonymous with digital currencies.
The other most commonly recognised cryptocurrencies included Ethereum at 12 percent and Dogecoin at 8 percent.
Despite the growing popularity of non-fungible tokens which are commonly known as NFTs, the survey found that 75 percent of Australians have still never heard of them.
NFTs are one of the most popular commodities to come out of the blockchain industry in 2021.
They include digital art, GIFs and even tweets, which have been thrust into the spotlight in what many are calling a digital art boom.
In early 2021 a JPG file sold for more than $88 million.
NFT can be best described as a digital token encrypted with the artist's signature on the blockchain a digital ledger that is the backbone of cryptocurrencies like Bitcoin and Ethereum allowing sellers and buyers to verify authenticity and ownership.
NFTs ensure a buyer has the true original directly from the artist.