Thousands of Australians are discovering the benefits of investing in cryptocurrencies via a self-managed super fund (SMSF). An SMSF is a type of superannuation investment fund that you manage yourself, rather than entrusting it to a financial broker. While an SMSF offers significant savings benefits to yourself as the fund manager, you also take on the responsibility of all associated laws and taxes.
Because the Australian Tax Office (ATO) treats cryptocurrencies as Capital Gains Tax (CGT) assets, individuals are allowed to include them in their SMSF. Australians who choose to run their own cryptocurrency SMSF will need to keep records, appoint an auditor, value their assets, lodge annual returns, report on events, and lodge Superannuation transfer balance reports.
Don’t worry if this all sounds a bit complex – companies like Bamboo now offer an SMSF cryptocurrency Australia product to simplify the process. It takes all the hassle out of managing the cryptocurrency side of your SMSF so you can concentrate on more pressing matters.
Why Get a Cryptocurrency SMSF in Australia?
An SMSF is the only way that Australians can harness the incredible potential of cryptocurrencies and include them in their retirement portfolio. While many people remain skeptical about the long-term potential of cryptocurrencies, the statistics don’t lie.
Cryptocurrencies have been the most profitable asset class over the past decade, and the market continues to grow annually. Bitcoin’s mean annual return is nearly 100%, which means $100 invested in Bitcoin 10 years ago would be worth more than a million dollars today.
Over the past year, several financial institutions have begun offering cryptocurrency products, further solidifying the long-term reliability of the market. Governments around the world have also been working hard to regulate the industry in a way that protects consumers without stifling technological innovation and freedom.
Together, this creates a safe and beneficial environment for retail investors to take advantage of the incredible benefits that cryptocurrency offers to a diversified retirement portfolio.
How to Setup a Cryptocurrency SMSF in Australia
If you’ve decided to super-charge your retirement portfolio with the addition of a cryptocurrency SMSF, follow these steps to set one up.
Note: you will need to already have an SMSF setup in your name, with bank account, ABN and operating address.
- First, choose a reliable and well-known company that has experience with cryptocurrency SMSFs. There are a few Australian cryptocurrency firms that offer an SMSF service, including Coinspot, eSuperfund, Bamboo, and Swyftx.
- Register with the platform of your choice and complete the account verification procedures.
- One registered, sign up to the Self-Managed Super Fund (SMSF) Product and enter all your SMSF details.
- You can now choose the mix of cryptocurrencies that you would like to include in your Australian cryptocurrency SMSF.
Although some cryptocurrencies like Bitcoin have been proven to deliver consistently high returns for over a decade now, they remain a risky and speculative asset class. It’s best practice to seek advice from a financial advisor before making important decisions regarding your retirement. The ATO offers a wealth of advice for citizens looking to invest in SMSFs.