The Times They Are a-Changin’: New Study Reveals That Millennials Trust Cryptocurrency Like Bitcoin More than the Stock Market
According to a new report published by investment company eToro, almost half of Millennials trust cryptocurrencies more than the stock market.
The results of the 1,000 participant survey revealed that 43% of Millennials would rather put their trust in a cryptocurrency, otherwise known as digital currency exchanges, than invest in the often tumultuous stock market.
But why has there been such a prominent generational shift among younger people?
Guy Hirsch, the managing director for eToro U.S. claims that it is because younger investors have lost trust in the stock market following the recession of 2008.
“We’re seeing the beginning of a generational shift in trust from traditional stock exchanges to crypto exchanges,” Hirsch notes. “While both crypto enthusiasts and millennials alike seem to distrust monolithic institutions like traditional exchanges and the largest investment banks that play in them, there’s a great deal of demand from younger investors for offerings from firms that are more recognizable, aren’t perceived to be bad actors and have an infrastructure that can provide personalized and tailored advice.”
This new study is in line with current trends in cryptocurrency investments. A recent research article published in November of 2018 showed that most cryptocurrency investors are Millennials who earn an annual wage ranging between $75,000 and $99,999. For Millennials under this minimum wage, many are struggling to pay off student loan debts, let alone make time for investing.
On top of that Millennials have witnessed big-name corporations fail time and time again to protect the information of their consumers. Where big corporations have ruined thousands of lives and only received a slap on the wrist, petty crimes can land you in jail for years. It’s no wonder 93% of citizens prefer the use of body cameras on police — perhaps we should start putting cameras in executive board rooms.
However, it isn’t just distrust for the stock market that is turning Millennials on to the idea of cryptocurrency.
Many investors are being influenced by their peers. As more Millennials begin to invest in crypto, others are likely to follow suit. It’s estimated that 35% of investors in crypto did so because they feared missing out.
This isn’t the first time this “FOMO” has influenced consumers — for better or worse. It’s estimated 64% of consumers make purchases after watching a marketing video on social media.
For some, however, traditional forms of investing simply seem outdated.
Some herald the benefits of cryptocurrencies as a form of individualism. Investors, even large companies, can invest in numerous projects with varying goals, including e-commerce, data privacy, and more.
One way to get Millennials engaged in more traditional forms of investing could be to change the basis of investment programs. The report also noted that 93% of millennial cryptocurrency traders claimed that they would invest in digital currency should traditional avenues, like Fidelity or Charles Schwab, offered the option.
But many other Millennials and members of Gen Z simply lack the basic financial wellness to invest. Many simply want to get a job and start a savings account.
Many young people can’t even remember to make it to their twice yearly dental check-up, let alone afford this medical luxury.
On top of that, investing in traditional avenues, such as the stock market, seems too risky. You never know when your junker of a car will fall apart or your HVAC system will stop working. Many younger renters and homeowners would rather invest in new heating and cooling systems for their home. These models are up to 59% more efficient than older models and they get the immediate gratification of a smart purchase. This varies greatly from the prolonged benefits of investments.
Since cryptocurrency is less likely to experience manipulation that could put user data at risk, it’s no wonder the younger generations are more willing to put their faith in technology; after all, they grew up with it.