Sep 2025
By Hasan Zamir, Marketing Specialist
WHAT ARE CRYPTOCURRENCIES (CRYPTO)?
Cryptocurrencies are digital assets that exist solely online and are maintained on a decentralized ledger—commonly known as a “blockchain”—rather than through a central bank or institution. You use encryption and digital keys to manage, transfer, or hold these assets. They can seem attractive because they offer potentially faster transactions and lower costs compared to traditional systems, and they aren’t tied to any bank or government.
However, their value is speculative and isn’t anchored by physical assets or traditional financial fundamentals. Prices can soar or crash based on demand and sentiment rather than underlying fundamentals.
KNOW THE RISKS FIRST
- Extremely High Risk & Volatility
Crypto is a “high-risk, speculative investment.” Prices can swing dramatically in a single day, and it’s crucial to be prepared for the possibility of losing your entire investment.
- Lack of Regulation & Consumer Protection
Crypto isn’t regulated in New Zealand like shares or managed funds. It typically lacks legal safeguards, such as the Financial Markets Conduct Act protections, unless it is offered by a provider registered on the Financial Service Providers Register (FSPR).
- Scams & Security Threats
Many cryptocurrency services operate offshore, sometimes anonymously, and aren’t backed by local consumer laws. This enables fraud and scams—ranging from pump-and-dump schemes to phishing attacks. Once your funds are gone, they’re often impossible to retrieve.
- Tax Implications in NZ
According to the IRD, crypto is considered a form of property. Any profits made from selling, trading, mining, or earning crypto are treated as taxable income. Proper record keeping—dates, values, and purpose—is vital to meet tax obligations.
CAN CRYPTO PLAY A ROLE IN YOUR PORTFOLIO?
If you’re intrigued, crypto may have a very small, speculative place in a diversified portfolio—but only after firm financial foundations are in place. Your long-term financial success is built on strategic planning, disciplined saving, diversification across asset classes and geographies, and regular reviews—not chasing hype. Think robust investment portfolios based on underlying fundamentals, protected cash buffers, and smart tax planning.
SATURN ADVICE: IMPARTIAL GUIDANCE FOR THE MODERN INVESTOR
At Saturn Advice, we understand the curiosity around emerging investment types. We believe in providing investors with impartial guidance on the potential benefits and risks involved, along with advice the types of investments that may (or may not) fit into a prudent financial strategy.
If you’re wondering how crypto or any other financial assets fit into your broader financial plan, reach out to us. We’re here to guide you with impartial expertise.
As a licensed financial advice business, we are dedicated to transparency — helping you make informed choices that align with your financial goals and values.
Note: Saturn Advice does not currently recommend allocating a portion of a diversified portfolio to cryptocurrency. None of the funds we recommend to clients have direct exposure to cryptocurrency, although some may invest in the underlying technologies that support it.
Sources for further information
What the FMA says about Cryptocurrencies
https://www.fma.govt.nz/consumer/investing/types-of-investments/cryptocurrencies
https://www.fma.govt.nz/library/articles/spotlight-on-cryptocurrency
What the Inland Revenue says about the tax treatment of cryptocurrencies
https://www.ird.govt.nz/media-releases/2020/new-inland-revenue-guidance-on-cryptoassets?
Disclaimer
This article was written by Hasan Zamir, Marketing Specialist at Saturn Advice. The views expressed are those of the author and do not necessarily represent the views of Saturn Advice. The information is general in nature and is not intended to constitute personalised financial advice. Before making any financial decisions, we recommend seeking advice from a Saturn Financial Adviser or another licensed Financial Advice Provider.