- Australians are again diving into the cryptocurrency market as the price of Bitcoin soars to over $40,000.
- Caroline Bowler, CEO of BTC Markets, told Business Insider Australia the exchange had onboarded one-sixth of its yearly customers in just six days in January as demand swells.
- Comparing it to 2017’s rally and subsequent sell-off, Bowler said the market is very different this time around.
- Visit Business Insider Australia’s homepage for more stories.
Caroline Bowler didn’t have a day off over Christmas.
The CEO of BTC Markets, one of Australia’s largest cryptocurrency exchanges, spent the holiday with her team trying to keep up with a sudden flood of customers.
Attracted by the surging price of Bitcoin, there has been an explosion in the number of Australians looking to trade the volatile asset.
“It’s just been unrelenting,” Bowler told Business Insider Australia. “We are now onboarding thousands of Australians a day who are looking to trade cryptocurrency.”
While prices soared in late November, there has been momentum building for the last six months.
“In the second half of last year we onboarded 40% more customers than we did the previous half, and in just the first six days of this year, we brought in 16% of last year’s total.”
Outsiders could be forgiven for feeling a sense of deja vu. Almost three years ago to the day, the price of Bitcoin went on a similar tear, sparking a mania that swept up the public.
It was a story that ultimately led to some tears when prices fell off a cliff in 2018, with buyers late to the party losing big time.
While the price trajectories in December look somewhat similar, the narrative in the crypto communities is that this time it’s different.
Older Australians are diving into Bitcoin
Given Bitcoin was only conceived in 2008, the three years it spent forgotten by the mainstream, marks a veritable lifetime, time which has benefitted the world of cryptocurrency, Bowler says.
“I think what we’re seeing now in this particular time, where the markets are seeing tremendous activity and growth, is actually in response to what’s been evolving over the last few years,” she said.
“Within our sector, there has been increasing sophistication of investors, but they’re responding to an increase in sophistication in terms of the product and the service range, as well as the build out.”
Certainly, the growing interest from high-profile institutional investors hasn’t hurt.
A handful of billionaire Wall Street investors outed themselves as believers last year, while others like digital payments company Square bought up more than 4,700 Bitcoins in October.
PayPal meanwhile announced it would allow its almost 350 million customers to hold and use cryptocurrencies this year.
Big names outside, it’s the changing demographic of the small fish that is just as significant, Bowler said.
“Back in 2017, around 5% of our base was over the age of 60. That grew this year to around 9% as boomers become a much bigger segment of the market,” Bowler said.
“I’ve lived in Asia and Europe but the difference I see here when it comes to crypto, is that Australians are much less passive about it, and are happy to dabble in it themselves.”
She estimates that the exchange now has five times the number of self-managed super funds (SMSFs) trading on it, as older workers and early retirees add it to their portfolios.
Cryptocurrencies have become ‘a genuine investment’
With the public at least cognisant of Bitcoin, and cryptocurrencies, this time around, the dynamics are very different, Bowler said.
“People are looking at it now as something other than as a speculative thing. They’re looking at it as something that’s been around, that’s been tested, that is a genuine investment,” she said.
The interest again extends beyond just Bitcoin. Cryptocurrencies like Ethereum, LiteCoin and XRP are the next most popular on the exchange.
Partly, the demand could be driven by anticipation they’ll piggyback off Bitcoin’s success. Partly, Bowler argues, people are looking at the technology itself.
“There is an increasing amount of incorporation within our traditional financial services so it’s no longer about legitimacy. It’s about gaining a great understanding around the benefits of this technology and what it’s going to bring to both our economies but also to our daily lives.”
Traders naturally might be more interested in where the price might go. On Tuesday, it hovered around $45,000 with JP Morgan speculating it could go as high as $US100,000, while some regulators warn people could “lose all their money”.
But while it’s impossible to say if investors are headed to the moon just yet, Bowler says the ecosystem will keep developing in the meantime.
“The naysayers are on the sidelines saying the bubble is going to burst and that it’s going to end. But it’s stuck around and it keeps on sticking around and it keeps evolving. It’s not going anywhere.”
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