In this guide
The increased interest and investment in cryptocurrency assets by SMSFs have led to a greater level of scrutiny from regulators.
It has also resulted in the release of further SMSF trustee guidance materials from the Australian Taxation Office (ATO). The most recent, in May 2025, was a paper highlighting the issues the ATO sees as being of key relevance for SMSF trustees and which provides a number of ‘essential tips’ to help navigate crypto investments in an SMSF.
What is a cryptocurrency?
A cryptocurrency is a form of digital (or virtual) currency separate to physical (‘fiat’) currencies issued by central banks and treasuries of sovereign governments around the world.
It is digital in the sense that it is created through a computerised algorithmic process that involves the use of advanced cryptographic techniques (hence ‘crypto’). Changes of ownership are recorded via chain-linked digital ‘blocks’, which once ‘written’ cannot be subsequently changed.
This ability to evidence and audit ownership changes without the need for government oversight was the impetus for the rapid growth of various cryptocurrencies, starting with Bitcoin in 2009.
Bitcoin was celebrated as a new frontier in ‘decentralised’ finance, theoretically giving users the ability to have a medium of financial exchange that was beyond the control of any government or monetary authority.
Since then, there has been an explosion of products that collectively sit under the ‘crypto’ banner but vary widely in their risk and return characteristics.
As of July 2025, there were almost 37 million cryptocurrencies globally, although not all of them were active or meaningful, compared with just 500 a decade ago. The sector has a global market value of a staggering US$3.95 trillion, with Bitcoin alone accounting for US$2.3 trillion.
Needless to say, the cryptocurrency boom has attracted investors and speculators who view cryptocurrency as an alternative asset class with potential for big capital gains, rather than as a means of exchange for products or services. For that reason, we’ll use the term ‘crypto asset’ rather than cryptocurrency from here on, as we believe it better captures the nature of these offerings today.
Types of crypto assets
As mentioned above, cryptocurrencies such as Bitcoin were the original crypto asset.
Other crypto assets that have emerged in more recent years include:
Non-fungible Tokens (NFTs)
NFTs are tokens that record ownership of a digital object on the blockchain. It might be a digital image or likeness of a real object, but the key characteristic is that each individual NFT is uniquely identifiable from every other.
NFTs are therefore considered ‘non-fungible’, as no tokens can be replaced by a similar one. Owning an NFT, however, does not of itself confer the holder any rights to the real object on which it may be based.
Stablecoins
A stablecoin is a term for any crypto asset that aims to maintain a stable value relative to a reference asset, or collection of assets.
Stablecoins may try to maintain a close pricing relationship with a fiat currency (e.g. the US dollar, commodity (such as gold), or some other financial asset, such as bonds or share indices).
Various techniques are used to try and ‘peg’ the price of a stablecoin to its chosen reference asset, from backing the stablecoin 1-for-1 with a trusted, stable external asset such as US government bonds to using algorithms to manipulate the demand and supply of the stablecoin in question.
DeFi tokens
DeFi tokens are created through participating in various decentralised finance (hence ‘DeFi’) protocols.
These tokens are used within systems that seek to decentralise certain finance functions such as insurance, lending and exchanges, often by entities called decentralised autonomous organisations (DAOs).
DeFi is a relatively new entrant in the crypto asset world and should be considered a ‘work in progress’ and treated accordingly.
Can SMSFs hold crypto assets?
Yes, SMSFs can hold crypto assets, provided certain conditions are met.
The current view of the ATO is that crypto assets are a legitimate form of investment for SMSFs provided that:
- They are allowed under the fund’s trust deed
- They comply with the fund’s investment strategy
- They comply with all relevant super legislation, just like any other SMSF investment must do. For example, SMSF crypto assets must be:
- Held in the fund’s name (not in the names of individual fund members)
- Valued according to ATO guidelines (explained later in this article).
Learn more about SMSF trust deeds and SMSF investment strategies.
For this reason, it is considered best practice if your SMSF’s trust deed is amended to specifically include crypto assets as a class or type of investment that might be held by the fund, together with their permissible allocations within your fund’s investment strategy.
The ATO only started including crypto assets in its SMSF statistics in 2018–19; at the time, crypto assets totalled around $200 million. As of March 2025, that figure had grown to $1.67 billion, but that is still a relative drop in the ocean when considering total SMSF assets that now exceed $1 trillion.
Interestingly, crypto asset holdings as a percentage of total assets is highest among SMSFs with lower balances, which indicates it may be most popular with younger members who have only recently established an SMSF.
How can my SMSF buy and sell cryptocurrencies?
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