How Australians are unlocking their crypto riches

Mr Phan, 37, said that since launching Vield in 2021, the start-up had made loans to about 150 crypto holders worth close to $10 million. It holds a credit licence and funds the loan book by borrowing from high-net-worth and private investors. The charge for borrowers is 13 per cent interest on the loans in addition to a 2 per cent origination fee.

Many borrowers may be betting on continuing price rises to offset the interest. Crypto markets, however, are notoriously volatile.

“The banks don’t see crypto as assets,” Mr Phan said. “You can refinance your house, but not crypto. You’d be surprised about the type of professional customer we’re getting now.”

YouTube research

Other crypto enthusiasts, such as 20-year-old Ben Wickenton of Warrnambool, Victoria, have ridden the rise of solana and bitcoin over the past 12 months.

“I saw a lot of stuff on social media when I was at high school and did my own research on YouTube to find different cryptocurrencies,” he said.

The Deakin University commerce graduate works a starter job in traditional finance and estimates about a quarter of his friends own cryptocurrencies.

He first bought into the digital tokens when he turned 18 and says he worries house prices are climbing out of reach, although that isn’t his motivation for turning to crypto.

“I’ve got about 10 to 15 per cent of my net worth in it as I think the risk versus reward is compelling, and I don’t worry about it crashing,” he said. “I’m saving for a house deposit, but the money for that goes into [stock] index funds. Crypto is more for fun, I have some friends who have a lot more in it than me, others are more sceptical.”

The Australian Securities and Investments Commission has repeatedly warned speculators such as Mr Wickenton that cryptocurrencies are “a high-risk and speculative investment”.

Cryptocurrencies are also commonly subject to scams and wild price swings where the risk of losing all your money is high, ASIC says.

However, the warnings over losses and a lack of compensation if you’re the victim of online hackers have not stopped surging trading volumes and adoption in Australia.

Altcoins on the up

Adrian Przelozny, the founder of crypto exchange Independent Reserve and a director of Blockchain Australia, said the exchange’s data showed a rapid adoption of coins with a lower market value than bitcoin over the past year.

“We’ve seen volume increases in altcoins of around two to three times to what they were 12 months ago,” Mr Przelozny said. “As altcoins have lower market caps compared to bitcoin, their price often reacts quicker and sharper to changes in sentiment as it takes less new money to move their markets.

“Because of this, altcoins often show good returns and high volatility during bitcoin bull market cycles and people treat them as speculative investments.”

Mr Phan said he had made more than 100 times his money on bitcoin since he started dabbling in cryptocurrencies in 2016, after working in the traditional payments space for Westpac and Western Union.

Bitcoin has advanced 152 per cent over the past year alone and Mr Phan said he had no plans to sell. He said he owned pepe because it was built on the ethereum blockchain, which might give it some utility. He has made dozens of other speculative bets on altcoins such as pandora.

“I’ve learned some of these altcoins are a gamble. I do have a fair bit, but I’m now aggregating more towards bitcoin and ethereum,” he said. “Not every asset will grow in value as coins can go up really high and come down even faster. And in my time I’ve lost money, but I see that as no different to buying a property in a bad suburb if that property doesn’t increase in value.”