Coinbase and OKX, two leading centralized cryptocurrency exchanges, are making significant inroads into Australia’s retirement sector by launching services aimed at self-managed superannuation funds (SMSFs). While cryptocurrencies are not entirely foreign to SMSFs, these new offerings promise a more streamlined approach for individual investors looking to incorporate digital assets into their retirement portfolios while still adhering to audit requirements.
SMSFs currently represent approximately 25% of Australia’s total retirement assets, amounting to about US$700 billion out of an estimated US$2.75 trillion. Yet, as of March 2025, the digital assets held by these funds account for only US$1.1 billion. This figure, although small in relation to overall assets, reflects a remarkable sevenfold increase since 2021. In contrast, in 2023, SMSFs had a combined US$94 billion invested in commercial and residential real estate, indicating a robust appetite for traditional asset classes like property and private equity.
Australia’s superannuation system, akin to mandatory 401(k) plans in the United States, is the fifth-largest pension system globally. A significant portion of SMSF investments is currently allocated to the stock market, with equities making up 60% of total assets—half of which are invested in overseas markets. The recent push by cryptocurrency firms into this multi-trillion dollar pension market occurs against a backdrop of ongoing trade tensions, during which the Australian dollar gained 6% against the U.S. dollar in 2025. This strengthening currency has prompted some funds to reassess their exposure to U.S. investments.
The potential for a substantial shift in asset allocation is palpable; a noticeable reduction in investments in U.S. treasuries could lead to a further strengthening of the Australian dollar, making U.S. investments less appealing. In this environment, cryptocurrencies may be viewed by SMSFs as a hedge against foreign exchange volatility and the unpredictability of overseas equity markets.
Coinbase has indicated that over 500 investors are already on the waitlist for its SMSF service, with many expressing intentions to invest up to $100,000 each in digital assets. OKX, which launched a comparable offering in June, has reported a stronger-than-expected demand from potential investors.
Should SMSFs successfully integrate digital assets into their portfolios, it is likely that employer and government-led funds, which constitute the remaining 75% of Australia’s superannuation assets, will follow suit. Previous studies have shown that SMSFs outperformed traditional pension funds by 1.2% over a five-year period ending in 2023. If this trend persists with the inclusion of cryptocurrencies, larger funds may be compelled to adopt similar strategies.
However, a robust regulatory framework in Australia remains a prominent factor, with regulatory bodies expressing ongoing skepticism regarding cryptocurrencies. The Australian Tax Office, along with the Australian Securities and Investments Commission and AUSTRAC, has encouraged investors to exercise caution and has actively targeted fraud and scam operations within the sector.
Meanwhile, developments in Australia occur alongside a broader re-evaluation of cryptocurrencies in U.S. retirement plans. Following Fidelity Investments’ introduction of a Bitcoin option in 401(k) plans in April 2022, the U.S. Department of Labor raised concerns, advising fiduciaries to exercise “extreme care” regarding crypto investments. Presently, the percentage of Bitcoin allocations in 401(k) plans remains below 1%, although recent DOL actions suggest a potential shift in this scenario. The department officially withdrew its earlier warning in May 2025, granting plan sponsors increased discretion over crypto allocations.
Further complicating the landscape, an executive order signed by President Trump on August 7, titled “Democratizing Access to Alternative Assets for 401(k) Investors,” has instructed the Labor Department to reconsider existing retirement plan rules, potentially paving the way for cryptocurrencies and other alternative investments to be included in defined-contribution plans. While receiving mixed reactions, this directive aims to enhance individual choice by moving away from heavy regulatory restrictions.
As both countries navigate the evolving relationship between cryptocurrencies and their respective retirement systems, the impact of performance on adoption remains crucial. If certain funds demonstrate significantly higher returns through crypto investments, larger funds may be compelled to reassess their strategies. However, lingering regulatory hurdles, alongside the inherent risks associated with cryptocurrencies, mean the timeline for widespread adoption remains uncertain.
The convergence of these factors presents a fascinating crossroads for pension funds in Australia and the U.S. As the landscape evolves, the potential for considerable investment reallocations could emerge, but only time will tell how quickly these changes will materialize.
