An increasing number of millennials and young people are choosing to invest in bitcoin rather than in traditional stocks, bonds, and mutual funds. This might come as a surprise, but several key factors explain this trend, including mind-set, economic environment, and technological. Statistics bear this out. A study by Blockchain Capital in 2017 revealed that over 40% of millennials had heard of bitcoin compared to just 15% of people over the age of 65. That study was conducted before the huge spike in bitcoin’s price, so it is likely that figure has increased significantly since. Cryptocurrency investment draws in more young people than from any other age gap. Let’s look at why.
Young people have grown up with technology as a significant part of their life. They are comfortable with it. It’s not the scary society disrupter that others might fear, but a tool that can enhance lives and make them better. Many young people have never known a world without the internet or mobile phones. They have never known a non-digital life. This makes them fully prepared to accept digital currencies. The way we have conducted financial transactions has progressed from cash to cards, and now to a decentralised digital currency. Younger people are better positioned to accept and use this new payment method because the leap of faith is not so great. If everything else in life is digital, why not money as well?
There is no such thing as stability anymore
Well, some see it that way some times at least, no one more so than younger people. Millennials have grown up in a world of boom and bust. With economic bubbles popping in the 80s, 90s, and 00s, due to financial crashes, stock crashes, and the subprime housing fiasco. Boomers might have experienced the phenomena of one job for life, but that concept is alien to younger generations. They are used to, and even expect to leap from job to job, and the world is not so stable. That outlook is more comfortable dealing with the volatility nature of bitcoin. If economic forces have appeared to have failed so many people, why not try something new such as a decentralised monetary system?
Younger people are okay with higher levels of risk
Younger people have a higher tolerance to risk than older generations. This goes beyond ways of thinking, environment, and technology – young people are genetically prone to take more risks. Bitcoin’s behaviour over the past couple of years has been one of peaks and troughs. It has made those lucky enough to get in early become millionaires – who wouldn’t be attracted by that? Yet, bitcoin is also viewed by some as too risky to get involved with. However if you combine a comfort with technology, a loss of faith in the current system, with a dash of risk, you have the recipe for a captive audience. This attitude fits with the make money quickly mentally that spills over into areas such as bitcoin casino, lotteries, freelancing, building an app to take over the world. This mind set of getting it done yesterday requires a certain level of risk-taking.
After that, we are not saying that young people don’t buy stocks and bonds. Or that older people run for the hills at the word blockchain. It’s just that millennials and younger people are perfectly positioned to invest and use bitcoin. Savvy investors know the value of diversifying, and young people connect with bitcoin, and what the blockchain revolution has to offer. They are just as happy setting aside a portion of their money to buy a few bits. And why not? Bitcoin might be worth a million dollars one day. Then again, it might bottom out. But so could any other stock or bond out there. But, if investors aren’t in the game they will certainly miss any booms.