Cryptocurrency: A Growing Trend You Can’t Ignore
- Nijo Antony
- Sep 9
- 4 min read
Updated: Sep 17
Cryptocurrency has gone from a tech-world experiment to a household conversation. Whether it’s Bitcoin making headlines, new digital tokens popping up, or clients asking “should I be in crypto?”, it’s clear this space is not going away. But like all investments, especially ones that move quickly, it pays to know the rules, particularly the tax rules.
What Is Cryptocurrency?
At its core, cryptocurrency, also known as a “crypto asset,” is a digital form of property stored on a blockchain. It isn’t considered “money” in Australia; the ATO sees it as an asset, much like shares. That means most transactions involving crypto come with tax consequences.
There are many flavours:
Bitcoin - the original and still the most recognised.
Ethereum & smart contract tokens - used not only for payments but also for running digital applications.
Stablecoins - linked to a fiat currency (like the US dollar) to reduce volatility.
NFTs (non-fungible tokens) - unique digital collectibles and assets.
Why the Sudden Interest?
Lately, there’s been a fresh wave of hype around crypto. Some of the big reasons:
Political spotlight: Donald Trump has been openly supportive of crypto, even suggesting the U.S. should be a leader in digital assets. This kind of backing has reignited global interest.
Wall Street involvement: Big fund managers like BlackRock have launched crypto ETFs, giving mainstream investors an easy way to gain exposure without directly buying coins. When the world’s largest asset manager steps in, people take notice.
Diversification: Some see crypto as an alternative to property or shares.
Inflation & cost-of-living pressures: With uncertainty around cash value, some look to crypto as a “hedge.”
Everyday use: Some cafés and restaurants in Sydney and Melbourne already accept crypto as payment, and you can even find cryptocurrency ATMs across the country where people can buy or withdraw crypto in exchange for cash.
Speculation: Let’s be honest, plenty are chasing fast gains... like I did at the time
What This Means for You
Crypto isn’t just for city-based investors. We’re hearing questions from:
Farmers: “Can I buy machinery with Bitcoin?” (Yes, but it triggers a tax event.)
Tradies: “If I get paid in crypto for a job, how’s it taxed?” (It’s treated as income at the market value on that day.)
Medical professionals & SMEs: Some are exploring crypto as part of their investment portfolios or SMSFs.
Whatever the use case, the tax rules matter.
The Tax Side - No Escaping It
The ATO has made it clear: there’s a tax for that. Here are the key points:
Capital Gains Tax (CGT) applies when you sell crypto, swap it for another crypto, or use it to buy goods/services.
Income tax applies if you’re paid in crypto, mine it, or earn staking rewards.
Business vs Personal: If crypto is part of your business activities, it may be taxed differently, more like trading stock.
Record-keeping is critical: Dates, amounts, AUD value at the time, and the purpose of the transaction all need to be tracked.
Don’t assume the “personal use” exemption will save you; it’s very narrow. For example, buying $50 of Bitcoin and using it the same week to pay for a holiday might qualify. But holding crypto for months as an investment almost certainly does not.
Case Study: Farmer John Buys a Land Cruiser with Bitcoin
Farmer John bought $70,000 worth of Bitcoin in 2022. By mid-2025, that same Bitcoin had risen in value to $90,000. John then used the Bitcoin to purchase a Toyota Land Cruiser for use on his farm.
Here’s the tax treatment:
By spending the Bitcoin, John has disposed of a CGT asset.
His cost base was $70,000, and his proceeds are deemed to be $90,000 (the market value at disposal).
That means John has made a $20,000 capital gain.
If he held the Bitcoin for more than 12 months, he may be eligible for the 50% CGT discount, reducing the taxable gain to $10,000.
So while he “paid” $90,000 for the Land Cruiser, he’ll also have a tax bill to consider come year-end.
Owning Crypto in Your SMSF
Yes, it’s possible to hold cryptocurrency inside your Self-Managed Superannuation Fund (SMSF), but it comes with strict conditions:
Investment strategy: Your SMSF must have a documented investment strategy allowing for crypto assets.
Sole purpose test: Investments must be for providing retirement benefits to members, not for personal enjoyment or use.
Separation of assets: SMSF crypto must be kept entirely separate from personal holdings. No mixing wallets.
Record-keeping & valuation: You’ll need accurate records, independent valuations, and must report holdings at market value each year.
Regulatory compliance: Auditors will closely review SMSF crypto holdings, and any breach could trigger penalties or even disqualification of the fund.
While SMSFs can invest in crypto, the risk profile is high. Trustees must carefully consider volatility, liquidity, and security (such as how the crypto is stored) before diving in.
Looking Ahead: The Future of Crypto
The future of crypto in Australia will be shaped by:
Tighter regulation - The ATO is already using data matching to catch unreported crypto gains.
More integration - Expect to see crypto ETFs, tokenised property, and more “real-world” use cases.
Ongoing volatility - High returns are possible, but so are heavy losses.
Central Bank Digital Currencies (CBDCs) - The RBA and other central banks are exploring the issuance of government-issued digital money, which could alter the role of crypto in the broader economy.
Our Advice
Crypto can be exciting, but it’s complex and risky. If you’re considering it:
Think about how it fits your broader financial strategy.
Understand the tax rules before you dive in.
Keep immaculate records.
Don’t invest more than you can afford to lose.
We’re here to help if you’re curious, already investing, or want to know how crypto might fit into your family trust, business, or super strategy.
If you’d like to discuss crypto and how it could impact your tax position, please book a meeting.
Nijo Antony
Director