SMSF Trustees Eye Long-Term Gains with Four-Year Cryptocurrency Investment Strategy
- CoinJar’s Dominic Gluchowski, says investors looking to add crypto to their self managed super funds (SMSFs) should be looking at hodling for a minimum of four years.
- He said the point in the market cycle is an important consideration, with investors best to stick to blue chips during bear markets before diversifying into alts/memecoins during bull runs.
- Crypto exchange Swyftx finds that in the last calendar year memecoins have been some of the most traded assets by SMSFs as investors shift from Bitcoin to riskier assets.
Investors looking to add crypto into their self-managed superannuation funds (SMSFs) should be thinking long-term with an eye to market cycles, according to Dominic Gluchowski, Chief Marketing Officer (CMO) with Australian crypto exchange CoinJar.
Speaking on the latest episode of the SMSF Adviser webcast, Gluchowski said investors considering adding crypto to their SMSF should have a minimum timeframe of four years in mind. The CoinJar CMO added that during bear markets, blue chip options like Bitcoin and Ethereum are the way to go, with altcoins and memecoins best left alone until the market heats up.
Related: Coinbase Eyes Australia’s $600 Billion Superannuation Market Amid Rising Crypto Demand
A 2021-22 annual report on SMSFs in Australia by the Australian Tax Office shows that SMSFs make up 25% of all super assets, worth over AU$876 billion. The top three assets held by SMSFs include listed shares, cash and term deposits and unlisted trusts.
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Patience And Research Key When Adding Crypto To SMSFs
Gluchowski says despite the volatility of the crypto market, investors should think about crypto assets similarly to traditional investments, with patience and market knowledge being key:
When it comes to duration it is a minimum of four years, and then when it comes to choice of cryptocurrencies, it’s a bit like with the stock markets – in the bear markets, it’s usually best to invest in the blue-chip stocks and when the market improves you can diversify into smaller caps.
Dominic Gluchowski, Chief Marketing Officer at CoinJar
Tom Bennett, the Head of Operations at Brisbane-based crypto exchange Swyftx, reiterated the importance of understanding crypto market cycles and dynamics before adding crypto to your SMSF, adding that in his experience blue chips remain the best option:
From my own experience, I stick to the blue chips, but in Australia we are seeing a lot of users with SMSFs divert into some of the ‘tail of alts’ now.
Tom Bennett, Head of Operation at Swyftx
Altcoins And Memecoins Becoming Popular Additions To SMSFs
Bennett says that as crypto has become more popular with investors, there’s been a trend towards adding altcoins and memecoins to SMSFs:
For example, in this calendar year, the top-traded assets by SMSF are now some of the memecoins, so while traditionally it has been the blue-chip cryptocurrency assets that have been traded we’re seeing our SMSFs diversifying into those meme assets.
Tom Bennett, Head of Operation at Swyftx
Related: Memecoins Spearhead Crypto Market Revival, with BOME and BONK Leading the Charge
Bennett says that while it’s possible to see quick, large returns with these more risky digital assets understanding how the market behaves remains critically important:
A lot of these memecoins are very cyclical, and they have almost their own kind of mini-cycles within the broader market cycle, so it’s important to really understand the asset that you’re investing in. Just because it may be pumping right now may not be a reason it’s going to continue and maintain a position on the market cap table.
Tom Bennett, Head of Operation at Swyftx
