Retirees invest in cryptocurrency

Australia Broadcast Center

23-05-2025

Andy Park: They're the generation that grew up with vinyl, but now they're dabbling in crypto. Instead of putting their money in shares or property, a recent survey found Australian retirees, on the promise of fast money, are the fastest growing demographic of cryptocurrency investors. But experts warn crypto is the Wild West and investing comes with big risks. Mackenzie Colahan reports.
Terry Sanders: It's $15.71 now, up 6% for the week.
Mackenzie Colahan: Terry and Justine Sanders are not typical cryptocurrency investors.
Terry Sanders: We have high hopes for that.
Mackenzie Colahan: The Brisbane-based retirees say they bought $48,000 worth of Bitcoin in 2019 and made almost half a million dollars after cashing out four years later.
Justine Sanders: Most people of our age, we don't tell that we're doing crypto because the few we told, they thought we had absolute rocks in our heads.
Terry Sanders: To start with, we were absolutely hopeless. Now we are semi-competent, but when we see our grandchildren, we know we're still hopeless.
Mackenzie Colahan: The pair are part of a growing number of seniors turning to crypto.
Terry Sanders: We were really running out of money, I guess you'd have to say. Not that there was very much anyway from super, so it's going to make a huge difference to our life. Certainly better than the superannuation or the 2% the bank gave us.
Mackenzie Colahan: A survey of 2,000 Australians by online cryptocurrency trading platform, Independent Reserve, found the number of participants aged over 65 who had owned crypto has grown from 2% to more than 8% since 2019. In that time, the price of Bitcoin soared from $5,000 per coin to around $170,000. But experts warn it's a volatile market. Alan Kirkland is a commissioner of corporate regulator, the Australian Securities and Investments Commission.
Alan Kirkland: It is clear from the data that the value of crypto investments can change quite rapidly. So it can go up fairly quickly, but it can also crash down very fast. You might get lucky, but you might also lose a lot of money very fast.
Mackenzie Colahan: And he points out cryptocurrency is a very high risk investment, arguing it's a bad option for retirees who need stability.
Alan Kirkland: You might find yourself in a situation where you suffer a significant loss and you don't have the opportunity to recover those investments and give yourself that security of retirement income that you need.
Mackenzie Colahan: Seidel Sierra runs an online consulting business that advises would-be investors, including Terry and Justine. Her business doesn't hold a financial services licence because cryptocurrency is not classed as a financial product under Australian law.
Seidel Sierra: We're seeing a little bit of FOMO. They want in, they see the gains. And if they've come from traditional markets, often the percent returns in crypto are quite extraordinary. We see actually a lot of the retirees with superannuation. They don't really have a mortgage. So they're more likely to put in, say, high five figures, even six figures into the market. So previously we'd see the average investment of say $30,000 into the market. Now we're seeing anywhere between 100 and half a million dollars as an average investment into this market for someone who may be of that retirement age.
Mackenzie Colahan: Cryptocurrencies are largely unregulated, making them fertile ground for fraud and scams. With no dedicated laws, ASIC has been left to regulate by enforcement of breaches of existing laws like the Corporations Act. And the Australian Federal Police says investors lost a total of $170 million to crypto scams in 2023. ASIC's Alan Kirkland says there's little you can do once you fall victim to a dodgy operator.
Alan Kirkland: Be very sceptical about the claims you may see from firms that are trying to encourage you to invest. Many crypto products aren't like other forms of financial investment. So the firms that offer them aren't licensed. If something goes wrong, you don't have the same consumer protections, the right to make a complaint and the right to go to an independent body as you would have if you're dealing with a more traditional financial firm.
Mackenzie Colahan: Mary Delahunty is Chief Executive Officer of the Association of Superannuation Funds of Australia. She says a number of superannuation funds are working with crypto. However, it's not classified as an investment.
Mary Delahunty: Banks are still uncertain about how the use of cryptocurrency might mix in with your other assets and getting your digital assets out of that environment and back into cash to use, for example, is still fairly uncertain. So it's a highly risky investment proposition. There's certainly been some people who have been able to ride the cryptocurrency wave quite high. If they are happy with that risk, and if they go in with their eyes wide open, then it can form a part of a diversified portfolio. It should never be, I don't think, all of the eggs and all of the baskets that you have.
Mackenzie Colahan: A reality that's not lost on Terry and Justine.
Terry Sanders: A lot of people, as you say, have come to grief because they haven't taken proper precautions. We've heard of people who have been trying to do it themselves, and they've got themselves in a terrible mess. Over 65, you can't afford to lose your money. You can't earn it again like a young person can.
Andy Park: Brisbane retiree Terry Sanders ending that report by Mackenzie Colahan.