Australian crypto investors got advice from YouTube videos: regulator

Crypto ownership in Australia ensures consumer protection: regulator

Nearly half of Australian retail investors owned cryptocurrency at the end of 2021 and more got their information from YouTube videos than financial advisers, the securities watchdog said on Thursday, calling the data of “strong arguments in favor of regulation”.

The Australian Securities and Investments Commission’s (ASIC) survey of 1,053 retail investors, conducted last November, found that 44% said they owned a cryptocurrency, making it the second most popular investment after Australian stocks.

A quarter of investors surveyed who held a cryptocurrency said it was their only investment.

The data will add to pressure on Australia’s new Labor government to focus on consumer protection as it takes charge of a years-long study, launched under the previous Conservative government, into whether and how to regulate digital assets.

It also legitimizes widely publicized statistics on Australia’s high cryptocurrency ownership rates that were dismissed last year as “implausible” by a senior central bank official.

The survey also showed that 41% of respondents took to social media for investment information, with 20% citing Alphabet Inc’s Youtube and 11% citing Meta Platforms’ Facebook.

According to the survey, only 13% got their information from a financial adviser or broker.

“We are concerned about the number of respondents who reported investing in volatile and unregulated crypto-asset products,” ASIC Chairman Joe Longo said in a statement.

“There are limited protections for investments in crypto-assets given that they have become increasingly mainstream and heavily advertised and promoted. ‘regulation of crypto-assets to better protect investors.

Since the survey, interest rate hikes have prompted investors to retreat from speculative assets, driving down cryptocurrency prices and driving some crypto-related businesses out of business.

The survey was conducted the same month bitcoin and ether, the two most popular cryptocurrencies, hit record highs. Both have fallen by around two-thirds since then, while the Australian stock market is down around 6%.

Raymond T. Helms