Life is not the same as it was decades ago, and millennials are making different choices, especially in how they approach money. Instead of prioritizing a high salary, millennials care more about having a healthy work-life balance. At the same time, they’d rather invest in experiences than possessions, achieving a level of financial comfort that allows them to create the life they want for themselves. And cryptocurrencies like Ethereum seem to be a significant part of their financial plan. This digital asset is incredibly profitable, as its price had an all-time high of $4,891.70, translating into substantial gains for investors. Plus, it has many valuable use cases, improving how businesses operate.
According to a recent study, 46% of millennials across large countries own digital currencies, namely the US, Japan, China, Indonesia, Nigeria, and Germany. The survey, conducted between July 2022-January 2023, gathered responses from 255,000 individuals from different age groups, namely Gen X, Gen Z, baby boomers, and millennials. According to the findings, 46% of respondents owning digital currencies were millennials, while 25% were part of Gen X, 21% of Gen Z, and only 8% were baby boomers. The survey also showed the importance of crypto regulation in voting decisions: among the respondents, 27% of millennials and 36% of Gen Z consider this factor crucial. 4% of baby boomers and 6% of Gen X believe the same. Considering the findings of the research, by the next decade, there could be a dramatic shift in adopting cryptocurrencies, and that’s because younger generations show increasing interest and strong demand for these digital assets. In fact, previous studies have emphasized that 50% of millennials and Gen Z want to include crypto in their retirement portfolio.
Why does crypto appeal so much to the younger generation?
While millennials are generally cautious when it comes to investing, they have a positive attitude towards cryptocurrencies, believing in their potential for long-term growth. But what makes these digital assets so appealing to younger adults? Among the main reasons is distrust of central banks. For older millennials, the 2008 financial crash is impossible to forget, as it was a period of financial turmoil that resulted in high unemployment rates and suicide. At that time, some were just transitioning to adulthood – only to experience a major economic decline. This traumatic event forever changed many people’s lives, leading to distrust in centralized finance. But those who didn’t go through such a distressful experience also view the Great Recession as a cautionary tale, which is why they are embracing financial technologies like cryptocurrencies. The event was triggered by the vulnerabilities in the financial system, which still exist today. But Bitcoin – the first digital currency- was forged from the Great Recession’s ashes. Satoshi Nakamoto created it in response to bank failure, aiming to provide individuals with a currency that doesn’t rely on central authorities, thus creating a more reliable financial system where individuals can have more control over their money.
Another reason why millennials have an optimistic outlook on cryptocurrencies is blockchain. Younger people believe in the power of this technology, seeing it as potentially disruptive. They want to break the status quo, so instead of sticking to traditional investments, they are willing to take the risk of putting their money into volatile assets like crypto. But besides this positive outlook on the blockchain, millennials also like cryptocurrency because it allows them to be part of a community and surround themselves with people who share the same interest. Millennials are also more tech-savvy, as they have grown up with smartphones and the Internet. Of course, older people can’t easily trust cryptocurrencies – after all, the world they grew up in was very different from what it is today. Young people live in the digital era, so naturally, they have more faith in assets like Bitcoin because they can see how they could potentially disrupt traditional finance.
Approaching cryptocurrencies the right way
While no one can deny the role of blockchain and crypto in the financial sector, it’s important to remember that it is a risky investment which should be approached with caution. Crypto is exciting, and if you invest in the right coin at the right time, you can potentially make high profits from your investment. But since that’s easier said than done, it is best to practice discipline and invest only smaller amounts which you can then expand gradually. This also means that you shouldn’t fill your portfolio only with cryptocurrency and instead spread your investments across multiple assets – this is a safer bet and will go a long way in ensuring financial stability over time.
It can be tempting to invest without a plan when hearing that a coin’s price soars and you could reach millions of dollars. But it’s not a wise move, as you could end up losing your money. Instead, you want to invest rationally – this is the key to long-term success. It’s important to understand where you stand in terms of risk-taking and only invest the amount you can bear losing. Careless crypto trading is costly, as it could affect your mental health in the long run, leading to depression. This is why good judgment is imperative – it will help you avoid getting caught up in the excitement and keep you on the right track. Now, it’s not uncommon to make mistakes – after all, it can be hard to grasp how cryptocurrencies work, especially when you’re a newbie. What matters is to reflect on what went wrong so that you won’t make the same mistake twice. If your trade is unsuccessful once, you want to think of the measures you could take to turn it into a profitable one next time.
As the most recent survey shows, the younger generations drive the crypto market, pointing to a digital financial future. As Gen Z and millennials play a role in shaping the global economy, there will likely be an increased demand and acceptance of digital currencies. This shift in adopting cryptocurrencies on a larger scale emphasizes the need for education on the industry, infrastructure, and regulation, as all of them are needed to support this new financial landscape.