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Speaker 1: The information provided in this program is of a general

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Speaker 1: nature and is not intended to be personalized financial advice.

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Speaker 1: We encourage you to seek appropriate advice from a qualified

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Speaker 1: professional to suit your individual circumstances. New research shows more

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Speaker 1: New Zealand investors buying crypto currencies, potentially signaling a shift

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Speaker 1: away from their property asset obsession.

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Speaker 2: You know, the research says to us that even property

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Speaker 2: owners are divestifying because they want the better attains. Some

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Speaker 2: people are definitely in it for reasons other than investment,

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Speaker 2: like that they want to give it to the banks.

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Speaker 2: You know, they don't like the fees they're being paid.

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Speaker 1: Uptake of crypto currencies like bitcoin and ethereum has put

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Speaker 1: New Zealand on the early adoption map, with fourteen percent

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Speaker 1: of adults here saying they've actively invested in it, while

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Speaker 1: another thirty percent are considering it. When asked why, most

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Speaker 1: said it was an easier market to get access to

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Speaker 1: compared with real estate. Those are the findings from a

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Speaker 1: survey of one thousand adults by market research company Protocol Theory,

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Speaker 1: funded by the trading platform Easycrypto. Easycrypto has more than

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Speaker 1: one hundred thousand users buying and selling about one hundred

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Speaker 1: and fifty crypto currencies from the more widely accepted to

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Speaker 1: This seemingly shares speculative. The only other research on crypto

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Speaker 1: uptake here is from the Market Regulator, which estimated ten

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Speaker 1: percent of investors were interested in crypto in twenty twenty two.

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Speaker 1: Easycrypto has seen some of its busiest trading periods since then,

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Speaker 1: with interest likely fueled by the launch of Bitcoin ETFs

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Speaker 1: in the United States. Easycrypto's chief commercial officer, Paul Quickendon says,

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Speaker 1: ultimately it comes down to accessibility and equality, factors other

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Speaker 1: investments like property cannot always provide. He believes crypto could

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Speaker 1: be the new quarter acre dream for many. Well, thanks

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Speaker 1: much for coming in, good to see you.

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Speaker 2: Well, and thank you for having me.

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Speaker 1: It's really good to be here anytime. So fourteen percent,

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Speaker 1: according to this research, is how many key we say

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Speaker 1: that they have invested or do currently invest in crypto.

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Speaker 1: That compares to about ten percent what the FMA told

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Speaker 1: us in twenty twenty two. How does that compare with

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Speaker 1: demand that you're seeing an easy crypto?

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Speaker 2: Is that on part Yeah, Look again, we're one of

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Speaker 2: the bigger players in the market, so we probably representative

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Speaker 2: of that, and you know, we've been growing over what

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Speaker 2: we call a crypto window. But growth in the last

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Speaker 2: six to eight months has been really high for us,

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Speaker 2: and so adoption has been following bitcoins price, and so yeah,

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Speaker 2: we would agree with those coin of numbers. So you know,

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Speaker 2: something like seven hundred thousand New Zealanders are holding crypto

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Speaker 2: at the moment or have how crypto, which feels about right.

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Speaker 1: How much are they on average holding I imagine that

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Speaker 1: they're investing less in crypto and bitcoin than they would

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Speaker 1: be in safe property.

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Speaker 2: Oh yeah, differitely, And that's one of the key findings

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Speaker 2: from our research with protocol Thury. So you know, people

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Speaker 2: are feeling excluded from certain esseage classes. They like the

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Speaker 2: low entry bart entry and crypto. They can tip in

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Speaker 2: as low as fifty dollars to buy a crypto, for instance,

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Speaker 2: and so very different investing persona, but the goal, the

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Speaker 2: end goal is the same. People want to have a

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Speaker 2: better retirement or a better few financial freedom or whatever

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Speaker 2: it is they're aiming for. And so that's you know,

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Speaker 2: that's a reoccurring theme in our customer base. It's just

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Speaker 2: they're getting to it different different means.

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Speaker 1: Now, So how much money. Are we talking on average

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Speaker 1: and somebody's.

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Speaker 2: Wallet like it differs by different market segments. And we've

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Speaker 2: got three different groups that we segment inside of our organization.

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Speaker 2: And so we've got ultra high value customers obviously spend

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Speaker 2: a lot with us, probably use our TSE services and

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Speaker 2: that sort of stuff, and they're doing a lot of volume.

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Speaker 2: High value customers probably look like you know you and I.

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Speaker 2: And then we've got our more retail based segment, and

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Speaker 2: in it it is a very big spread. We've got

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Speaker 2: people who spend millions, and we've got people who, like

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Speaker 2: I said, you are tipping in sort of fifty one

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Speaker 2: hundred dollars a month sort of stuff. So you can

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Speaker 2: kind of work out that they're doing somewhere around one

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Speaker 2: thousand dollars per enum something like that at the lower end.

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Speaker 1: I'm interested in that ultra end. How much are we

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Speaker 1: talking in terms of millions? Is it like hundreds of

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Speaker 1: millions or tens of millions or singles.

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Speaker 2: I've not seen a trade of hundreds of millions, but

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Speaker 2: we know some of them been doing more than ten millions.

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Speaker 1: And of these individuals or businesses too.

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Speaker 2: Both. Yeah, So we've got you know, family offices and trusts.

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Speaker 2: Now as customers who have been investing for a long time,

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Speaker 2: we've got you know, individuals who either got into crypto

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Speaker 2: really early, so back in twenty twelve, twenty eleven, something

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Speaker 2: like that, and you have accumulated a lot of crypto

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Speaker 2: wealth and they have starring in cryspto wealth like it's

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Speaker 2: really really interesting. And then probably a trend that we've

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Speaker 2: noticed in the last eight months is you know, kind

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Speaker 2: of the entry of small businesses or crypto to put

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Speaker 2: it on their balance check. We believe, you know, taking

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Speaker 2: the Michael Sailor model and being bitcoined bills and that

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Speaker 2: sort of stuff.

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Speaker 1: Following micro strategy and interesting.

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Speaker 2: Yeah, so you know it's worked for him, so why

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Speaker 2: not sort of stuff.

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Speaker 1: Yeah.

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Speaker 2: So there's so again like very different profiles and very

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Speaker 2: different investing dreams, and quite often you can look at

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Speaker 2: the trends and see one group selling, one group buying,

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Speaker 2: one group not doing anything, and they're very different. It's

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Speaker 2: quite an interesting thing.

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Speaker 1: You mentioned the exclusionary aspects of some investment asset classes,

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Speaker 1: and I do want to talk to you about that

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Speaker 1: in a bit more detail a little bit later on,

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Speaker 1: but just still on this adoption curve. If we look

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Speaker 1: at this research and then compare it to what we've

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Speaker 1: seen from regulators, it looks about like two percentage points

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Speaker 1: increasing an adoption each year. Fourteen percent still seems pretty

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Speaker 1: early in the adoption curve. So where do you think

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Speaker 1: we are on that adoption.

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Speaker 2: We think we're probably about to get into the early

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Speaker 2: majority part of it. The research says that there's a

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Speaker 2: lot of people considering cryptocurrency, you know, like another ten

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Speaker 2: percent this year and another kind of twenty percent you know,

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Speaker 2: sometime in the future. So that would say to us

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Speaker 2: that we're still on the left side of the adoption curve,

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Speaker 2: probably just done got past the really early innovators and

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Speaker 2: early adopters and now getting into that kind of majority

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Speaker 2: part of the market. And again, you know, the reason

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Speaker 2: is that the feedback was really clear. They want financial freedom.

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Speaker 2: They feel excluded from property in particular. There's another key

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Speaker 2: trend that came through. They don't like the fact that,

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Speaker 2: you know, there's lots of profit are going off to

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Speaker 2: the banks. They're really the appeal of no middle men,

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Speaker 2: you know, and our sector is quite evident in the

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Speaker 2: research as well, and so you know, they're just looking

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Speaker 2: for diversification in a way to kind of make their

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Speaker 2: lives better, and cryptos scene as that trend.

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Speaker 1: Yeah, I do want to ask you about the factors

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Speaker 1: that are specifically fueling this, and I wonder how much

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Speaker 1: of it is pushed towards crypto because of the launch

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Speaker 1: of bitcoin ets in the United States, or how much

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Speaker 1: of it is pull away from assets like property, because

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Speaker 1: it does seem like more people in our more investors

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Speaker 1: are coming to the realization that property is kind of

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Speaker 1: just a mechanism for banks and councils to stay rich

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Speaker 1: through rates.

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Speaker 2: All right, very interesting perspective. So look, you can't argue

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Speaker 2: with the returns. So bitcoin was up about one hundred

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Speaker 2: and fifty percent last year alone, It's up sixty percent

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Speaker 2: this year, and obviously that's in a trick for proposition.

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Speaker 2: People are chasing the money ethereum is the same, right,

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Speaker 2: it's doing well. Then, you know, in terms of property,

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Speaker 2: like the entry price to that now is really high.

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Speaker 2: You know, the dictor income ratios and all that stuff,

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Speaker 2: you know, seven times earnings. That's pretty scary for a

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Speaker 2: lot of people's, particularly if you live in a big

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Speaker 2: city Aukland with a million dollar average price like, that's

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Speaker 2: a big number. You know, two hundred thousand dollars deposit

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Speaker 2: is something that a lot of people are going to

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Speaker 2: struggle with. And so you know that that is appealing

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Speaker 2: for one part of the segment and obviously the younger

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Speaker 2: part of our market. But we've got a very big

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Speaker 2: segment of people in the over sixty category. And so

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Speaker 2: these are people who you know, you would think of

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Speaker 2: as boomers, right and so largely property owners, but they're

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Speaker 2: still worried about their retirement and they're diversifying their investment

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Speaker 2: portfolio and investing in cryptocurrency and really big numbers. We

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Speaker 2: can see a generation where they get married, have kids,

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Speaker 2: and get a mortgage, and they fall off and the

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Speaker 2: investment continue and then you know, sort of a late

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Speaker 2: forty five point fifty they start to come back in

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Speaker 2: and start investing. And so you know, we've got a

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Speaker 2: kind of classic investment curve. But you know, the research

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Speaker 2: says to us that even property owners are distifying because

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Speaker 2: they want better returns and cryptos are able as an

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Speaker 2: asset able.

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Speaker 1: To deliver that. So that suggests that this isn't a

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Speaker 1: fixed pie. Because I was going to ask you if

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Speaker 1: you thought that it might be a fixed pie where

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Speaker 1: there's kind of this amount of speculation funds that will

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Speaker 1: just switch between different assets, right, But do you think

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Speaker 1: that that pie could actually grow, that people could shift

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Speaker 1: money out of property and into something like crypto.

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Speaker 2: Well, we are, Well we're seeing that happen. So we've

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Speaker 2: got some customers who were in physical gold and are

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Speaker 2: now listening in bitcoin. And gold's done really well in

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Speaker 2: the last two years in terms of price appreciation, but

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Speaker 2: they're still seeing higher returns elsewhere. And so what they're

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Speaker 2: doing is they're taking our readers, they're taking up the

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Speaker 2: gains from one air sect and putting it into something

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Speaker 2: that might deliver more. Are they putting everything into it? No,

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Speaker 2: that would be high risk, and we're not. You know,

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Speaker 2: we're a business that want people to respond invest responsibly.

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Speaker 2: So we believe they're putting a portion of their wealth

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Speaker 2: and that's a personal decision. You know. The research sort

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Speaker 2: of says five percent is pretty good. Kurra, which is

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Speaker 2: a key saver provider, will let you do up to

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Speaker 2: ten percent, and bitcoin some people are more than that.

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Speaker 2: It just depends on their situation and their risk profile.

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Speaker 2: Not seeing that everyone go all in, but we are

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Speaker 2: seeing people divestify, and that's a really big prominent trend

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Speaker 2: at the moment.

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Speaker 1: We're not seeing institutions domestically adopted, though, at least not

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Speaker 1: the ones I've spoken to. I recently interviewed ThEC your

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Speaker 1: first Kate, Malcolm Jackson, and he told me that while

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Speaker 1: some clients were asking them about bitcoin and wanting them

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Speaker 1: to invest in it, he was refusing to buy it.

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Speaker 2: Right, Yeah, I mean New Zealand's inherently a little bit

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Speaker 2: more conservative the bitcoin ets when they launched in the

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Speaker 2: US early January. They've just done a round of filings

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Speaker 2: and all of the big institutional holders are now been outed,

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Speaker 2: and there's you know, there's whole states like Wyoming as

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Speaker 2: a big investor in those ets. So it's starting to happen.

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Speaker 2: But I would say that that adoption is even further

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Speaker 2: behind the retail adoption. And again there's mandates and there's

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Speaker 2: all sorts of things that need to be changed inside

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Speaker 2: of these institutions to be able to hold this. It's

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Speaker 2: speculative as well, right, and so you know, if you're

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Speaker 2: going to turn around to your shareholders and say, hey,

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Speaker 2: we invested in this, you've got to have a good

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Speaker 2: solid case and so there's people just kind of working

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Speaker 2: through that. I would imagine. Do we see more and

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Speaker 2: more people doing it? Yes, you know there's the biggest

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Speaker 2: bank in Singapore got out of this week for holding

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Speaker 2: millions and millions of dollars several hundred million dollars actually

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Speaker 2: of eth. They've just been quietly accumulating the second biggas

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Speaker 2: asset in crypto because you know, they can see an

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Speaker 2: eat ifcoming. They saw what happen with bitcoin. That looks

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Speaker 2: like a good bet for them, and so you know

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Speaker 2: they're but the numbers are a fraction of their assets

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Speaker 2: under management, right and again just put they're just starting

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Speaker 2: to put a portion of their wealth into our sector.

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Speaker 2: So more demand is coming. So we think the pie

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Speaker 2: will grow as more and more people kind of cotton

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Speaker 2: onto it as just another asset class.

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Speaker 1: You mentioned a quality, and I'm interested in your thoughts

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Speaker 1: on how much of this small orbeit increased interest in

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Speaker 1: crypto adoption in New Zealand is driven by financial returns.

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Speaker 1: We know that the price of bitcoin align is up

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Speaker 1: sixty percent year to date, and how much of it

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Speaker 1: is morality? Because the bitcoin is the long term hot hoddlers,

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Speaker 1: they will say that it's actually about the morality of

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Speaker 1: the network.

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Speaker 2: Well, yeah, I mean some of them are really into

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Speaker 2: for the tech. Crypto is very triable and people get

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Speaker 2: you know, really personally invested in their coins, their projects

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Speaker 2: with their investments, and so some people are definitely in

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Speaker 2: it for reasons other than investment, like they want to

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Speaker 2: give it to the banks, you know, they don't like

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Speaker 2: the fees they're being paid, They want to disrupt the

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Speaker 2: world a little bit, they don't like some of the

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Speaker 2: more authoritarian regimes that have been an application, or they

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Speaker 2: you know again like they're they're seeing an opportunity to

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Speaker 2: make their life better in their own way. And so

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Speaker 2: we're really proud about the fact that the diversity of

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Speaker 2: our investors is really high, like the female investors are

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Speaker 2: you know, probably close to forty percent, which you know,

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Speaker 2: Janine obviously as a founder, is very very proud of.

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Speaker 2: And we, you know, something we've been fostering for a

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Speaker 2: long time because we don't believe this should be an

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Speaker 2: asset exclusively for one particular stereotype of person, and so

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Speaker 2: having all investors had access to it as a big

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Speaker 2: part of what we're trying to do.

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Speaker 1: Do you foresee, this early increased interest and perhaps more

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Speaker 1: to come, as you say, triggering any regulatory response.

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Speaker 2: Oh sure, yeah, absolutely, and it's starting. And so there

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Speaker 2: are specific crypto rules just came in to effect one

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Speaker 2: junior already around transactions and how we monitor that sort

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Speaker 2: of stuff. We're seeing moves out of the Australian regulatory

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Speaker 2: environment and New Zealand's typically keep a good close eye

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Speaker 2: on what's going on over there, and they're going after

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Speaker 2: custodian businesses and people who issue stable coins and putting

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Speaker 2: more regular around their compliants and how they're managed and

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Speaker 2: all that sort of stuff, and so we think New

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Speaker 2: Zealand will follow suit, and it should be in easy

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Speaker 2: Crypto was a business that saw this asset class is

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Speaker 2: something that would become mainstream. We've always acted like it's

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Speaker 2: been a regulated financial product, even though it's still not,

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Speaker 2: and we've tried to do what we can to be

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Speaker 2: as regulated as we can along the way, and we

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Speaker 2: just think that's a great trend. It gives the investors

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Speaker 2: more trust and security in the space, and that's something

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Speaker 2: that holds some people back. That's got a bad reputation

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Speaker 2: in some quarters, but you know, we think that's they

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Speaker 2: can only be a good thing if.

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Speaker 1: We look at the adoption curve again. Early adopters are

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Speaker 1: typically the individual investors who do their own research, and

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Speaker 1: then after that typically comes institutions are a little bit slower,

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Speaker 1: and then regulators are typically last on that on that

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Speaker 1: interest curve, aren't they are they coming to you asking

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Speaker 1: more questions and wanting to better understand what am I asking?

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Speaker 2: Look there? So the Reserve bankers has a mandate to

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Speaker 2: look at financial stability, and they're interested in some of

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Speaker 2: the currency flows and so that you know, we've we've

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Speaker 2: got some questions coming from them. You know, in Land

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Speaker 2: Revenue is obviously a business an organization that's interested in

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Speaker 2: tax and so they speak to us on a regular

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Speaker 2: basis as well. They're interested in what's going on and

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Speaker 2: where the money is going and all that sort of stuff.

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Speaker 2: You know, we we as an organization spend a lot

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Speaker 2: of time with the regulator, regulator, regular tory community, so

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Speaker 2: d I, A, F, M, A, RB and Z, and

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Speaker 2: just kind of educate them what's going on, just so

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Speaker 2: they're up to speak. The worst thing, from our point

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Speaker 2: of view, the worst thing would be a knee jeck

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Speaker 2: reaction to something that happened versus you know, a smart,

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Speaker 2: considered response to what's changing. And you know, we have

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Speaker 2: some incidents in our market, and we just want people

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Speaker 2: to know how they work, and you know, what they

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Speaker 2: can regulate for and what they can't regulate for, and

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Speaker 2: there are some things that we just can't control. Most

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Speaker 2: of this is software operating in the cloud written by

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Speaker 2: some anonymous developer that no one really you know that

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Speaker 2: you can't. You can't. You know, it's the Internet. Money,

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Speaker 2: it flows around, and so you know, it operates in

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Speaker 2: a very different way from banking, which is you know

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Speaker 2: twenty six you know hours in the week and it

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Speaker 2: shuts for the weeknd and you know, people tell you

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Speaker 2: up and all that sort of stuff. Our market works

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Speaker 2: twenty four ceiling always has, so just a different slightly

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Speaker 2: different beasts and so we just spend time with those

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Speaker 2: guys just educating them so that they can make wise

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Speaker 2: and formed decisions.

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Speaker 1: There's currenting tax advantages when it comes to property. If

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Speaker 1: you don't fall under the bright line text, then you're

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Speaker 1: not subjects of paying and come tax. But if you

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Speaker 1: sell your crypto, you are subject to paying can come toax.

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Speaker 1: So how do you see tax settings playing out here,

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Speaker 1: And do you really think that if there's still still

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Speaker 1: the tax advantageous asset and property, that crypto could never

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Speaker 1: really unseat that.

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Speaker 2: Well, that's a really good question. So taxes at a

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Speaker 2: national level, tax is certainly something that governments can play

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Speaker 2: with to create a competitive advantage. And in our sector,

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Speaker 2: we've seen nations like Portugal play with their tax settings

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Speaker 2: and they treated a lot of crypto people and then

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Speaker 2: they had very low rates and people kind of moved

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Speaker 2: into and brought a lot of wealth, Like Crypto's got

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Speaker 2: a lot of wealth into that country. And so you know,

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Speaker 2: certainly we've seen that happen in Portugal is not alone

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Speaker 2: and doing that in terms of how it's treated like

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Speaker 2: it's treated as property like so it does have capital

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Speaker 2: gains on it. So if you buy at a thousand,

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Speaker 2: you sell it for two thousand, you've got a one

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Speaker 2: thousand dollars gain right and you have to pay your

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Speaker 2: tax rate on that. That's not as you say. You know,

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Speaker 2: New Zealand is a bit a nation that's wedded to

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Speaker 2: a housing market and so it's not as tax efficient

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Speaker 2: as property. But equally, you know, in the last two years,

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Speaker 2: property hasn't done so well, right, it's come back twenty

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Speaker 2: twenty five percent, whereas like I said, bit coins up

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Speaker 2: one hundred and eighty percent in two years or something

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Speaker 2: crazy like that. Right, So, and it works on a cycle,

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Speaker 2: a repeatable cycle. So it's kind of like as an

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Speaker 2: investment class, there's quite a high degree of certainty if

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Speaker 2: you hang over, hang onto the asset for long enough,

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Speaker 2: and you know, if you can kind of get your

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Speaker 2: heat around the fact that you have this text obligation

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Speaker 2: and you should treat it like that, then you know

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Speaker 2: you can still get good returns. And so that's how

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Speaker 2: we view it. Will the tax settings change that is

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Speaker 2: a really good question. Should should they? My personal opinion,

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Speaker 2: you know, if we want a certain type of immigrant

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Speaker 2: to come into the country, who who is technically savvy,

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Speaker 2: has wealth, and then possibly there's something they could do

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Speaker 2: with some of their tax settings around that and attract

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Speaker 2: you know, different type of investor class. You know, we've

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Speaker 2: done that previously with you know, the ten million dollars

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Speaker 2: three shold well and you had to invest in company companies,

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Speaker 2: I think, and so I think, you know, as New

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Speaker 2: Zealand has precedents for doing something like that, I just

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Speaker 2: don't think that the tax authorities are recognizing quite the

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Speaker 2: opportunity been doing that right. And so, like I said,

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Speaker 2: there are a lot of people. You know, there's something

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Speaker 2: like four hundred million crypto holders around the world right

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Speaker 2: in big millions, big millions of those people have a

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Speaker 2: lot of wealth, and so you know, could they do

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Speaker 2: something for our economy. Probably, I guess there's the answer.

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Speaker 2: So tax settings is something that needs to be thought

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Speaker 2: through sometime in the future.

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Speaker 1: I would think, Yeah, we'll both keep an eye out.

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Speaker 1: It'll be an interesting wonder watch. Thank you so much

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Speaker 1: your time for I appreciate it.

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Speaker 2: You're welcome, Thanks for having me.