More and more Aussies are choosing Self-Managed Super Funds (SMSFs) to manage their retirement portfolios in recent years. The raw number of SMSFs in the system has increased by approximately 80,000 since 2020, alongside a 33% growth in SMSF assets.
There are several reasons for this trend, with the emergence of cryptocurrency as a longer-term investment playing its part. Digital assets aren’t typically as readily available or directly investable in traditional super funds, so keen investors are turning to SMSFs to purchase cryptocurrencies. This is reflected in the 740% increase in crypto holdings within SMSFs between 2020 and 2025.
Despite the strong growth numbers, SMSFs can be complex to get started and manage correctly. There’s lots of paperwork, regulations and tax obligations to understand and adhere to before moving off the ground floor.
This complexity can also lead to several common misconceptions.
Luckily, there are professional SMSF consultants available across the crypto and traditional financial industries to help you navigate these requirements.
Question 1: How much does a crypto SMSF cost?
Understandably, the first question that pops into most people’s head before opening an SMSF is ‘how much will I have to pay?’
The correct answer is – and apologies for the fence-sitting – it depends.
However, there is a misconception that SMSFs are extremely expensive to set up, which may be off-putting for some investors.
Though running administration costs can add up over time, the same can be said for the fees taken by traditional fund managers. It’s crucial to compare all potential fees.
And getting started doesn’t necessarily have to break the bank. For example, using Swyftx’s SMSF partners to set up a self-managed fund can cost anywhere between $999 and $2,200 AUD (excluding Bare Trust set ups). Those using different providers may have different results.
Question 2: Can I hold my Crypto SMSF in cold storage?
Many people worry that they must hold their SMSF digital assets in a custodial wallet – for example, an exchange-based wallet such as their Swyftx SMSF account.
However, this is not necessarily true.
SMSF investors are able to leverage the security features often associated with cold wallets (like the Ledger or Trezor hardware products) for their retirement portfolios.
With that in mind, there are some important things to remember:
- The storage arrangement must be disclosed, clearly documented and auditable, demonstrating the SMSF’s ownership and control.
- The hardware wallet must be purchased by the SMSF, held in the SMSF’s name (e.g., via a trustee resolution), and used exclusively for the SMSF’s cryptocurrency assets. Co-mingling with personal or business assets is strictly prohibited as it breaches asset separation rules.
- Secure storage of the hardware wallet and its recovery seed phrase is critical. The trustees must document the storage arrangements and ensure multiple trustees have access or a clear succession plan for access.
- The trustees must be able to provide evidence to the SMSF auditor verifying the fund’s ownership of the cryptocurrency held in the cold wallet.
Question 3: Can I buy any cryptocurrency for my SMSF?
A common misconception about crypto SMSFs is that, once you’re set up, you can buy just about any digital asset and transfer it to your fund.
In many situations, this is not actually correct, and attempting to do so without meeting specific requirements can lead to serious compliance breaches.
Every SMSF must operate under a documented investment strategy and trust deed. Both documents must permit investment in cryptocurrencies. The investment strategy must specifically address cryptocurrency investments any assets held by the fund must align with the goals and risk profile set out in these documents. This includes satisfying the ‘sole purpose test,’ meaning the investment is made and held for the exclusive purpose of providing retirement benefits to members.
While a well-drafted trust deed and investment strategy might allow for a range of digital assets, trustees must exercise due diligence for each specific cryptocurrency. Highly volatile or speculative assets may require even more rigorous justification within the investment strategy.
Question 4: Are Crypto SMSFS complicated to set up and run?
In the pre-internet era, setting up an SMSF could be a challenge for first-time investors.
Today, thanks to growing educational tools and SMSF-specific services, some processes are more accessible for individuals getting a headstart.
There are still a number of regulatory requirements under superannuation law, which can take some getting used to, and these rules continue to evolve. Staying compliant and informed takes ongoing effort and is a big part of managing your SMSF. Trustees are personally liable for any breaches.
Even so, the ability to access SMSF experts online – whether in tax, crypto, or compliance – has made these retirement funds far more accessible than they once were. However, relying on experts does not absolve trustees of their duties; you must still understand the advice and ensure the fund is managed correctly.
Question 5: How much money do I need to start a crypto SMSF?
If you search this question online, most resources suggest a starting super balance of approximately $200,000 AUD to make an SMSF cost-effective.
This remains the commonly accepted benchmark, as fixed administration fees tend to become more economical as your SMSF balance grows. However, according to the ATO, approximately 15% of all SMSFs hold less than $200,000 AUD. And with the rise of digital SMSF services and a more competitive landscape, it’s becoming increasingly viable for some individuals to open and operate SMSFs.
Important Disclaimer: This information is general in nature and should not be considered financial, legal, or tax advice. Investing in cryptocurrency, involves significant risks and complexities. Before making any decisions, you should consult with independent, licensed financial, legal, and tax professionals who can provide advice tailored to your specific circumstances.
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