Generation Crypto: Why Millenials Love Bitcoin

Why are Millennials so enthusiastic about Bitcoin and cryptos?

Recent studies suggest that growing a percentage of Millennials (born 1981-1996) would prefer investing in Bitcoin over bonds, stocks, real estate and even gold. Really?

Nate Geraci, president of the ETF Store, recently claimed that up to 90% of his Millennial clients would prefer to invest in Bitcoin rather than gold.

Although his testimony is largely anecdotal, the data seems to back this up.

A poll conducted on behalf of Blockchain Capital in April 2019 asked two thousand adults their propensity to purchase Bitcoin in the next five years:

  • 42% of 18-34 year olds said they were ‘very’ or ‘somewhat likely’, up 10 percentage points from 2017,
  • 35% of 35-44 year olds said they were ‘very’ or ‘somewhat likely’, up 1 percentage point from 2019,
  • 25% of 45-54 year olds said they were ‘very’ or ‘somewhat likely’, up 10 percentage points from 2017, and
  • 8% of 65+ year olds said said they were ‘very’ or ‘somewhat likely’, up 4% points from 2017.

Notice the generational gap?

Almost half of Millennials plan on purchasing Bitcoin compared to only one quarter of 45-54 year-olds. On the low-end of the spectrum, understandably, less than 10% of 65+ year-olds plan on purchasing Bitcoin. This is explained by the fact that the older you get, the more risk-averse you become. Indeed, by the time you reach retirement age you should hopefully have saved enough to retire comfortably and prefer the safe and stable returns of bonds.

The question is why would the younger generations be so keen to invest in a high-risk, newly invented and often difficult to understand digital asset?

Generational divide is a natural aspect of life

REASON 1: GRIM ECONOMIC PERSPECTIVES

Boomers (born 1946-1964) and Generation X (born 1965-1979) grew up in a post-war society where economic growth was steady and employment opportunities were abundant.

The hippy counter-culture was short-lived and quickly gave way to the “socially liberal but fiscally conservative” yuppies who made their peace with capitalism and took advantage of a booming stock market.

However, although a large minority of boomers are able to retire comfortably, the recent economic downturns have hit them hard and the vast majority is staying in the workforce at rates not seen in generations for people their age.

Despite the system letting them down, they prefer investing in traditional assets like gold, real estate and stocks/bonds.

Ironically, many hippies became yuppies – “young urban professionals” – during the late 70s and 80s

In contrast, Millennials never experienced the “golden age of capitalism” and grew up in the 1990-2000s era when Western economies started to run out of steam and jobs started moving South and East.

May young adults take on huge debt to go to college – national student debt in the USA totals close to $1.5 trillion – yet paradoxically they are known as a “pessimistic generation“: 78% are worried about having good-paying job opportunities and 79% are worried they won’t have enough money to live on when they retire.

The system is no longer delivering on its promise of providing cushy jobs to college graduates.

Student debt is a real problem for Millenials

Further, the housing bubble which led to the 2007 financial crisis dealt a lethal blow to the confidence this generation has in its political institutions, the economy and its traditional investment instruments.

It is no surprise that Satoshi released the Bitcoin whitepaper less than two years after the outbreak of the worst economic downturn since the Great Depression. Indeed, BTC was presented as a viable alternative to a debt-based inflationary currency seen as largely responsible for the economic woes of the past century.

Worse yet, income inequality is increasing and people no longer believe the “American Dream” is a reality. “The rich get richer, the poor get poorer” is no longer just a populist slogan – it’s actually happening.

Thus, Millenials are looking for a way out of the traditional economy they feel has excluded them.

Ron Paul’s recent Twitter poll confirms that the internet generation overwhelmingly favors Bitcoin over traditional investments

REASON 2: ADVENT OF THE TECHNOLOGY AGE

The rise of the internet and video games introduced the concepts of peer-to-peer transactions and digital assets to millions of Millennials.

From MSN messenger and World of Warcraft to Facebook and Twitter, they grew up with technology and were introduced early to the concept of “being connected” to people from around the globe. Also, the huge popularity of illegal peer-to-peer downloading platforms such as Napster, KaZaa and eDonkey2000, cultivated a sense of “sticking it to the man” that lives on today in the cryptocurrency sphere.

Today, games such as FIFA and Fortnite have popularized the use of digital coins for in-game purchases. This is now a multibillion dollar industry and the use of such digital coins is widespread.

Video games such as FIFA contribute to popularizing the concept of digital currencies

Thus, the online generation is naturally more receptive to digital assets than ageing boomers and Xers. A survey of one thousand online traders confirms this growing divide as it revealed that 43% of Millennials trust cryptocurrency exchanges more than US stock exchanges, compared to 77% of boomers.

Millennials are also at the heart of the technology revolution: Growth of e-commerce and the progressive decline of classic retail, rise of e-banking, the move towards a cashless society, social media and the end of privacy, facial recognition software, are all trends are all being spearheaded by Millenial/Gen. Z consumers.

Millennials and Gen. Z are totally immersed in the digital age

The digital age is reshaping the Millennials’ rapport to financial transactions and privacy.

Indeed, it appears they don’t mind sacrificing their privacy for the sake of convenience. For better or for worse, the trend is moving in the direction of increased openness and transparency in all sectors of life.

Lastly, from a purely practical point of view, the newer generation is keen on quick and inexpensive peer-to-peer transactions. Bitcoin and cryptocurrencies in general provides a reliable alternative to the expensive and slow systems currently used by banks and money transfer companies.

Case in point: To send $1000 in BTC equivalent to another wallet, Bitcoin transaction fees could range from $0.09 to $0.52 whereas sending $1000 by Western Union could cost anywhere from $17 to $70!

Which transfer method do you prefer?

CONCLUSION: TOMORROW’S INVESTMENT LANDSCAPE

The question now is what will the investment landscape look like in 10, 20, 30 years from now?

Obviously, traditional assets like the stock market, gold and real estate will remain attractive investments.

However, as Boomers and Generation X slowly fade away, Millennials and Generation Z will take control of the markets and digital assets will play a prominent role in the investment portfolios of tomorrow.

Enjoyed this article? Like and follow me.

Want to continue the conversation? Leave a comment below.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s