In the latter half of 2021, it was discovered that a substantial percentage of Australian investors were in possession of cryptocurrency. Surprisingly, rather than consulting with professional financial advisors, many retail investors learned about investing via YouTube videos. On Thursday, watchdog deemed the scenario a compelling argument for oversight.
When asked what other investments they had, one in four cryptocurrency holders said “none.” This indicates that the only source of their finances is cryptocurrency. This, of course, calls for strict regulation by governing bodies. To get to the bottom of this, the Australian Securities and Investments Commission (ASIC) surveyed 1,053 individual investors in the country in November. After the survey, they found that 44% of people own cryptocurrency, making it the second most popular investment after Australian shares.
The study’s primary objective is to investigate the limited safeguards afforded to holders of crypto-assets in light of the widespread adoption and widespread promotion of these investments. The main emphasis is on the compelling need to regulate crypto assets to protect investors.
Following the survey, investors fled speculative assets as interest rates rose, causing a precipitous decline in cryptocurrency values and the closure of certain enterprises directly tied to blockchain technology.
Analysis of the Survey by ASIC and Its Interference
Bitcoin and Ether, the most popular cryptocurrencies, reached all-time highs in the same month as the survey was conducted. Since then, the two have fallen by around two-thirds, with the Australian stock market falling roughly 6%.
The survey found that 41% of respondents used social media to access investment-related content, with 20% using YouTube (owned by Alphabet Inc.) and 11% using Facebook (owned by Meta Platforms) as their primary sources. However, the poll found that just 13% of respondents learned about these topics through a financial advisor or broker.
ASIC Chair Joe Longo released a statement expressing worry about the number of respondents investing in risky crypto-asset products. He said:
“We are concerned about the number of people surveyed who reported investing in unregulated, volatile crypto-asset products,”
Information like this will put further pressure on Australia’s incoming Labor government to prioritize consumer safety as it takes over a multi-year study begun by the previous conservative government to determine whether or not and how to regulate digital assets.
It also gives credence to the widely reported figures showing substantial costs associated with cryptocurrency ownership in Australia, which was previously deemed “implausible” by a senior central bank official in Australia.