Coinbase Eyes Australian Pension Market With Bitcoin Service Tailored For Self-Managed Funds
In a strategic move to tap into the burgeoning Australian pension market, $Coinbase Global, Inc.(COIN)$
What Happened: Coinbase, the largest cryptocurrency exchange in the U.S., is focusing on the self-managed pensions sector in Australia, a market that constitutes about a quarter of the country's $2.5 trillion pension system. The sector currently has approximately A$1 billion ($664 million) invested in cryptocurrencies, Bloomberg reported on Wednesday.
John O'Loghlen, Coinbase's Managing Director for Asia-Pacific, revealed that the exchange is tailoring a service to cater to these clients, who often make a single allocation and leave it untouched. This move comes as Bitcoin's (CRYPTO: BTC) price has surged by around 45% this year following the launch of ETFs.
"Self-managed super funds might just make a single allocation and set it and forget it," said O'Loghlen. "We are working on an offering to service those clients really well on a one-off basis — to have them trade with us and stay with us."
O'Loghlen, a former employee of Ant Group and Goldman Sachs Group Inc., believes that the recent ETF launches in the U.S. have boosted the crypto market, leading to an all-time high for Bitcoin in March. He predicts that Australia will introduce more crypto ETFs by the end of 2024.
Why It Matters: The move by Coinbase to target the Australian pension sector comes at a time when institutional investors are increasingly considering cryptocurrencies as a viable investment option. Earlier in March, the world's largest pension fund, the Government Pension Investment Fund of Japan, expressed interest in diversifying its portfolio with Bitcoin.
Australia's cryptocurrency market has been experiencing significant developments. The Australian Securities Exchange is reportedly set to approve the country's first spot-Bitcoin ETF before the end of 2024. This move is expected to further fuel the growth of the cryptocurrency market in Australia.
Despite the growing interest in cryptocurrencies, there are still concerns about the risks associated with the sector. Financial advisers, such as Michael Houlihan, have cautioned against allocating a significant portion of a portfolio to high-risk assets like cryptocurrencies. "You wouldn't want a significant part of a portfolio in something that's such high risk," he said.
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