The crypto bubble attracted 44% newbie investors

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The crypto bubble attracted 44% newbie investors

New investors (those who started since March 2020) and those who have been investing for five years or less were twice as likely to own crypto assets as investors with more than five years of experience.

“Limited protections”

The findings, based on groundwork by the corporate regulator in the middle of last year and a survey of 1,053 pandemic investors by consultancy SEC Newgate in November, drew anger from the ASIC President Joe Longo.

“We are concerned about the number of respondents who said they invest in volatile and unregulated crypto-asset products,” Longo said.

“ASIC is also concerned that there are limited protections for investments in crypto-assets given that they have become increasingly mainstream and are heavily advertised and promoted.”

However, he noted that the research reflected a “particular moment in time” when the price of bitcoin hit an all-time high of US$68,000 in November, taking the broader crypto market to a market cap of over $2 trillion. US dollars ($2.8 trillion).

The market then fell dramatically to $927 billion in June this year as crypto assets were hit by the broader sell-off of risky and near-tech investments amid rapidly rising interest rates. ‘interest. Several crypto-specific incidents, in particular the near collapse of algorithmic stablecoin TerraUSDweighed on sentiment again.

It is understood that the regulator has detected a decline in overall crypto asset ownership and trading volumes, given the changing economic conditions and the high-profile and widespread loss cases.

“The dust has settled”

Hurt investors in the US have sought redress for losses via class action lawsuits, while local crypto influencer Fred Schebesta, founder of comparison site Finder, admitted he lost about $20,000 in terra incident after deny it in may.

However, although down from last year, broader retail activity is still higher than pre-pandemic levels. Crypto assets and projects are likely to benefit from the still buoyant sentiment.

The managing director of Cosmos Asset Management, Dan Annan, whose company listed Australia’s first cryptocurrency exchange-traded fund in Maysaid that enthusiasm for investing in crypto is on the rise again.

Although hesitant to call the market bottom, Mr. Annan, a former BlackRock and BetaShares executive, said Bitcoin and Ethereum’s recent performance indicates the so-called crypto winter may be melting away. .

“The dust has cleared a bit for crypto and a lot of risk has been factored in,” Annan said. The Australian Financial Review.

Cosmos CEO Dan Annan said demand for its bitcoin and ethereum ETFs is growing. James Brickwood

“As risk premiums become available, we will see even more recovery,” he added, signifying the return of conditions deemed conducive to a bull market.

Mr Annan acknowledged that many crypto investors lost money after last year’s highs and that the correction had “put a pause for a lot of people”, weakening demand over the past few months.

He claimed it was a benefit of launching his bitcoin ETF in May, the same trading day news of the terra incident became known in Australia. Listing when prices are low gives unitholders the opportunity to “make money rather than lose money”, he said.

The fund has attracted total investor inflows of less than $1 million since then, while Cosmos’ Ethereum ETF (listed two weeks later) invested just $290,000.

But in recent weeks the flows have been accelerating in “drips and drips”, he said. He predicted that those entering the market now may have a more sophisticated understanding of the complex technology underlying the assets than some investors who huddled together during the pandemic rally.

“What we’ve seen in crypto is people doing a lot of speculative trading and chasing returns without really understanding the fundamentals,” Annan said. “When people chase returns without worrying about valuation and portfolios, they will be hurt.”

The Albanian government has hinted that it wants to improve consumer protection for customers local cryptocurrency exchanges, but is expected to release a plan or draft regulation.

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