Crypto investors on watch as Div 296 legislation moves closer
Vakul Talwar, general manager for Australia at Crypto.com, told SMSF Adviser that the government will need to make clear how the proposed super tax will work for assets like cryptocurrency.
However, Talwar said that despite the uncertainty, there is an increasing number of SMSFs and institutional investors incorporating crypto into their portfolios as part of a broader investment strategy.
You’re out of free articles for this month
“These options offer flexible, secure ways to participate in the digital asset space, aligned to individual risk profiles and financial goals,” he said.
“There’s an important shift underway – one even crypto sceptics can no longer ignore. More institutions are waking up to the reality that crypto isn’t going away. New routes to ownership are emerging, offering more regulated ways to access bitcoin.”
Lucia Uen, general manager for digital asset custody at CloudTech Group, said that while the proposed tax on unrealised gains for high superannuation balances has raised valid concerns, over time, investors are likely to adapt by factoring this change into the broader strategy of their SMSF portfolio.
“In addition to aligning with their investment goals and risk tolerance, investors will need to consider the tax implications when selecting asset classes,” she said.
“Regardless of whether a portfolio is geared towards growth, income, or capital preservation, including crypto assets may offer diversification benefits and exposure to emerging opportunities, helping investors enhance long-term outcomes in a dynamic financial environment.”
Talwar said the rise in the appetite for cryptocurrencies has been in large part due to institutional investors who have played a pivotal role in legitimising the cryptocurrency sector by integrating digital assets into traditional investment frameworks.
“Ultimately, the next wave of institutional crypto adoption in Australia won’t be driven by hype. It will be driven by regulation, by consumer demand, and by the global convergence of traditional and digital finance,” she said.
“It isn’t about turning super funds into crypto funds. It’s about recognising crypto as a valid slice of the alternatives bucket, like infrastructure, hedge funds, or private equity. This is evident in AMP’s recent move to include crypto within its alternatives exposure. We expect institutional adoption will only grow, especially as ETF vehicles continue to simplify access and demystify custody.”
Uen added that the entry of institutional investors (commonly referred to as “instos”), including fund managers, banks, and asset managers, has fundamentally reshaped the perception of crypto assets.
“What was once viewed as a speculative sector has evolved into a strategic evolution of financial services built on blockchain technology,” she said.
“This shift has introduced governance, risk management, and operational standards honed over decades in traditional finance, fostering greater investor confidence and accelerating the maturation of the digital asset sector.”
With global volatility across all market sectors, Uen said cryptocurrencies behave more like a risk asset, but in other cycles, they’ve demonstrated independence and unique return potential.
“That complexity is exactly why we view crypto as a dynamic component of a modern, diversified portfolio – not a one-dimensional inflation hedge,” she said.
Talwar continued that cryptocurrencies have evolved significantly, transitioning from niche assets to mainstream financial instruments and are proving to be a very compelling alternative investment for both institutional and retail investors.
“Cryptocurrencies offer a unique asset class that can diversify investment portfolios, potentially reducing overall risk due to their low correlation with traditional assets like stocks and bonds,” he said.
“As with any investment, it’s important to do your own research and due diligence before making an investment into any cryptocurrency and to ensure that the investment is aligned with your personal investment strategy and risk profile.”