Millennials and Cryptocurrency: are they Made for each other
How it works
You see it play out at holiday parties all around the world. As families get together, the parents and grandparents at the party are always asking the younger guests how to do something with their computer or smartphone. Those who grew up on a computer are clearly going to be more comfortable with digital solutions, and the same goes for Millennials and cryptocurrency.
Among older generations, there’s a large sense of skepticism around the future of blockchain and cryptocurrency technology. To form an opinion, you first have to understand the technology, and many older folks lack the knowledge required to even comprehend a decentralized form of currency with a ledger verified across all user’s computers. Millennials have a much easier time understanding it and therefore see a future for the technology.
How it works
A much higher percentage of Millennials know how to buy bitcoins than older generations, or what crypto wallet is. While many adults mainly follow stock prices, younger generations are closely watching cryptocurrency prices and trying learn about which ones are worth buying.
Polling agency YouGov recently conducted a survey to help understand some of the trends for crypto. The report highlights Millennials’ acceptance of the technology, with 44% saying they thought that crypto would become a ‘somewhat’ or ‘very’ widely accepted form of payment for legal goods and services. Only 29% of those 55 and older held the same beliefs.
The statistic highlights one of the challenges facing the cryptocurrency industry, which is to shed the notion that it’s primarily for illegal or illicit purposes. The lack of a central authority has, in the past, attracted this type of use – most notably the Silk Road marketplace scandal. These things work to make older generations skeptical of the technology. The YouGov poll showed that around 25% of people thought crypto was regularly used for illegal purposes.
The YouGov report also stated that “Of the people who believe that cryptocurrencies will become widely accepted, over one-third (36%) say they would be interested in converting to primarily using a cryptocurrency rather than the U.S. dollar. However, a majority (57%) say they would not be interested in converting away from the U.S. dollar. Millennials are almost equally split between being interested (48%) and not interested (50%).
That shows a clear willingness among Millennials to at least look at the technology in the future. Another key use that the younger generation sees for crypto is for retirement investing. While the traditional finance industry is shying away from investing in digital currency, many Millennials are doing their own crypto investing with an eye toward retirement already. This shift will mean that the traditional finance sector will need to embrace the technology as these younger generations mature.
In fact, younger generations believe that crypto is a good long term investment strategy five-times more than boomers. Another recent survey, conducted by BankRate, showed that 5% of Millennials believe that bitcoin is the best place to keep money they won’t need for 10 years or more. Only 1.2% of Gen-X’ers, and less than 1% of boomers felt the same way.
Ultimately, the trends seem to show that Millennials are more skeptical of the traditional finance industry and vice versa. Seeing that these mature financial markets are dominated by older, wealthier generations, it’s no surprise that younger folks are drawn to new ways of investing. The volatility inherent in the young cryptocurrency market is also appealing to young investors, who can weather a loss. The potential upside, however, if you are a smart crypto investor, can be massive.
Ultimately, the tech-savvy Millennials are also the ones creating the blockchain architecture. Many CEOs, system engineers, programmers, and Industry influencers are part of the generation. That means they know how to design a system for that demographic, and it will mean that as these technologies evolve they will continue to appeal to younger demographics.
There’s no question that blockchain technology is going to disrupt major financial markets, and that is one way that Millennials can take a stake in a financial system that they don’t feel welcome in. The stock market, private equity, real estate, and so many other forms of traditional finance just aren’t accessible to younger generations. Cryptocurrency will change that, so the sooner you start to learn about it and get involved, the better off you’ll be.
Many people characterize younger generations as only living for the moment, not saving money and blind to the future. Digital currency is changing that. So as you’re sitting around the table this upcoming holiday season, take the opportunity to ask the Millennials at the table what they know about cryptocurrency. You might be surprised how forward thinking they are!