Times certainly are changing as far as investments are concerned. Regarding the considerable past, investors tended toward traditional investment vehicles, such as stocks. Many younger investors, however, appear to prefer cryptocurrencies over stocks.
Millennials lead the way for crypto?
In a press release posted February 19 on PR Newswire, crypto exchange eToro revealed some interesting numbers regarding Millenials’ investment preferences.
The exchange reportedly conducted an extensive, nationwide survey, polling 1,000 online traders. The survey “found that 43 percent of Millennial online traders trust crypto exchanges more than the U.S. stock exchanges. Conversely, 77 percent of Gen X respondents trust stock exchanges more,” according to the press release.
It is often confusing to know what ages apply to which generational names. Pew Research Center brought clarity to the subject, stating Millennials include any person born within the years 1981 and 1996. Generation X includes individuals born at any point from 1965 to 1980.
Back to the survey
eToro’s survey uncovered evidence the world might be experiencing a change in financial trends and trust. U.S. Managing Director for eToro, Guy Hirsch, said the change in investor preference pertains to trust.
Quoted in the press release, Hirsch posited:
Younger investors’ experience with the stock market has seen a great deal of loss of trust, with the fall of Lehman Brothers because of irresponsible practices followed by the worst recession since the Great Depression. Trust further eroded when Americans saw how hundreds of billions of dollars of taxpayers money are funneled to the largest financial institutions while their savings evaporated and how banks get free money through quantitative easing while their cost of living continued to rise.”
Blockchain technology also has the aspect of immutability, leading to more effective and transparent auditing. “Immutability is native to blockchains and that makes real-time audit to be sensible and cost-effective,” Hirsch said. He included this as reasoning for Millennials’ and Gen Xs’ perceptions that manipulation might not be as common among crypto exchanges, and such exchanges are “less likely to be a place where bad actors get rewarded with taxpayer money.”
Given the above statistics, Millenials have still shown great excitement toward traditional financial entities and products that may utilize crypto assets. “Ninety-three percent of Millennial crypto traders surveyed said that they would invest more money in crypto if it were offered by traditional financial institutions such as TD Ameritrade, Fidelity, or Charles Schwab,” the press release included.
Additional thoughts on the press release
The press release revealed an interesting amount of interest in the crypto space among certain generations, although it appears crypto participants are looking to invest through more traditional methods or entities.
Hirsch stated Millenials and Gen Xs might have more faith in crypto exchanges due to less likelihood of manipulation. The 43% statistic also referred to crypto exchange preference over stock exchanges.
Later statistics, however, showed a great number of crypto participants would rather invest in crypto through a well known traditional method or entity, as shown in the statistic that 93% of Millennial crypto traders would put in further funds if it was through a traditional route.
The press release also included:
Among investors across all age groups that don’t trade crypto, 59 percent of respondents said they would invest more money in crypto if it were offered by a traditional financial institution. Meanwhile, current crypto traders would be more at ease investing in the asset class if it were offered by a traditional financial institution — 92 percent would invest more money if a conventional financial institution provided this investing option.”
It appears as though the statistics show a hesitancy toward crypto exchanges, instead of a definite trust in them. It is also common knowledge in the crypto space to avoid keeping large amounts of funds on crypto exchanges, due to Mt. Gox-like events. One of the major benefits of the crypto space is the ability to hold one’s own private keys, eliminating the need to trust a third party.
The press release appears to have succeeded in showing an overall interest in the crypto space as a whole.
*This article includes the author’s opinions and interpretations of the data.