Cryptocurrency Update

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Cryptocurrency group sues CBA over scam warning

A Colombian-Australian remittance service that uses cryptocurrencies is suing the Commonwealth Bank, which it accuses of defamation after the bank told its customers who were using the service they were possible scam victims, before closing their accounts. The claim was filed in NSW, claiming CBA defamed the company by writing letters to customers of remittance group Colcambios Australia urging them to contact police in Colombia as the money in their accounts appeared to be proceeds of fraud.

CBA is defending the claim, saying it was acting within its legal rights to close accounts after reports were made to the bank that the transactions were possibly fraudulent. Calcambios Australia offers remittance services to students from Colombia who are based in Australia. The company takes money deposited by students and uses these transactions in cryptocurrencies that convert the pesos to Australian dollars, with the money then sent to customers’ Australian bank accounts.

Millennials losing money, boomers and Gen X making money on meme stocks

Openmarkets Group (OMG), a trading and wealth management infrastructure fintech, has analysed data of its retail trading platform, Opentrader, revealing that on average, baby boomers and Gen X are profiting off meme stocks while millennials are losing money.

The analysis looked at 11 meme stocks (stocks where share prices went through the roof due to social media hype, not fundamentals) with boomers and Gen X defined as being only ‘over 40’ and millennials ‘under 40’. Over 40s saw an average gain of 1.29 per cent (3.8 per cent of total trades), while under-40s would have seen an average loss of 1.93 per cent (5.14 per cent of total trades).

Younger, less-experienced traders were acting with twice as much risk, and their returns were 2.5 times worse. Younger traders were more likely to be tricked into trading on hyped stocks. The price variations were analysed over the past 12 months, with no one stock being necessarily good or bad as an investment, rather acting on social media hype/advice was the error.

The 11 stocks were:

  • 88 Energy

  • Creso Pharma

  • Douugh

  • Lake Resources

  • Brainchip

  • Vulcan Energy

  • Digital Wine Ventures

  • Zip Co

  • Cirralto

  • Mesoblast

  • Latin Resources

 Australians investing large amounts in cryptocurrency

The very first edition of the BTC Markets Investor Report looks into the behaviour of Australian cryptocurrency investors for the 2020-21 financial year. The report looks at the BTCM exchange including a survey of its users into what they are investing in and why.

Key findings of the report include:

  • More women (an increase of 172 per cent) are investing large amounts of money in cryptocurrencies, with female investors trading twice a day on average (versus five times for males), with larger amounts deposited initially than male peers ($2381 versus $2060)

  • Younger male traders no longer have the monopoly in cryptocurrency trading

  • 1 in 4 crypto investors are over the age of 44, with a 15 per cent spike in investors aged over 60 in the last financial year

  • Older people have larger initial deposits, bigger portfolios and higher average investments, but trade half as often as younger counterparts on the exchange

  • Motivations include building wealth (70 per cent), retire early (34 per cent) and portfolio diversification (28 per cent)

  • Fifty-seven per cent say they have self-researched their strategy versus social media hype or meme stocks