Coinbase Targets Crypto Demand in Australia’s $600B Pension Market

• Coinbase plans to launch a service for Australia’s self-managed pension sector.
• Digital asset investments in SMSFs have surged over 500% since 2019, reaching approximately A$1 billion ($664 million) in 2024.
• Coinbase’s new service aims to provide easy, one-off trades for SMSF clients.

Coinbase, the leading U.S. cryptocurrency exchange, plans to launch a new service aimed at Australia’s growing Self-Managed Superannuation Funds (SMSFs), according to a recent interview with Asia-Pacific Managing Director John O’Loghlen.

Data from the Australian Taxation Office (ATO) indicates that SMSFs, which represent approximately a quarter of Australia’s $2.5 trillion pension market, have allocated roughly A$1 billion (US$664 million) to digital assets

This figure represents a significant increase of over 500% from the A$131.5 million (US$197 million) recorded in December 2019, highlighting the growing presence of cryptocurrencies within Australia’s pension sector.

Driven by recent capital inflows and Bitcoin’s price surge in 2024, cryptocurrency investments in SMSFs are expected to climb further. However, traditional institutional investors in Australia have largely remained on the sidelines, wary of the cryptocurrency market’s volatility and history of scandals.

A March 2023 Reuters report detailing how thousands of Australians lost millions in their self-managed pensions due to crypto investments serves as a cautionary tale.

Commenting on this development, John O’Loghlen was quoted saying,

“Self-managed super funds might just make a single allocation and set it and forget it. “We are working on an offering to service those clients really well on a one-off basis — to have them trade with us and stay with us.”

The recent launch of U.S. spot-Bitcoin Exchange-Traded Funds (ETFs), which propelled Bitcoin to a new all-time high in March, has provided a boost to the cryptocurrency sector.

John O’Loghlen, with prior experience at Ant Group and Goldman Sachs, believes these developments will complement existing ETF offerings rather than compete with them.

“We don’t see this as cannibalizing the ETF players, but more a rising tide and a big enough interest for someone to come in through their own self-managed portal,”

Australia may follow suit, with the potential introduction of crypto ETFs by the end of 2024. Companies like VanEck Associates Corp. and BetaShares Holdings Pty Ltd. are reportedly preparing their offerings for the Australian market.