- The mindset of young Americans
- Millennials and cryptocurrencies in numbers
- The generation gap
- Investing a small amount in cryptocurrencies
- Getting information about cryptocurrencies
- Russia in numbers
Millennials are people who were born in the early 1990s. Currently, they represent the majority of the workforce of any country, and they are the ones who determine future development trends. USA Today, a major American newspaper, conducted a survey and analyzed the latest research on the millennials’ attitude toward cryptocurrencies. The results are quite impressive and clearly demonstrate that cryptocurrencies have come to stay.
The American economy is based on the assumption that every person should save up money on their own. Stock trading and investment are very widespread among Americans. Children are taught about investing in school, and by the time they are 20, they become quite confident in investing money. Everyone saves up for buying a house and for retirement, while gradually settling their debts.
For example, Nick Halversen, a 27-year-old marksmanship instructor for the U.S. Marine Corps, participated in the newspaper’s survey and explained how his attitude toward cryptocurrencies has evolved over time. Nick’s father taught him that investment does not pay off immediately and it is better to play the long game when it comes to investing. Initially, Nick was skeptical about cryptocurrencies, thinking that it was a kind of gambling. But after doing more research, he saw the potential of cryptocurrencies and decided to set aside a small portion of each paycheck to invest in ether, bitcoin, and Dogecoin. Nick focuses on long-term investment: instead of profiting from the volatility of cryptocurrencies, he aims to receive long-term income over a decade.
Nick’s most important rule is not to invest the money that you cannot afford to lose. He believes that this is the only way to feel comfortable investing.
So far, millennials have a relatively low understanding of blockchain and cryptocurrencies, but they are already willing to register on cryptocurrency exchanges and buy cryptocoins.
As of 2021, 13% of Americans own cryptocurrencies. According to Harris Poll data, among millennials, that number is significantly higher at 25%. According to survey data, 21% of young investors are not at all concerned that the value of their cryptocurrency may fall to zero, while 63% are somewhat concerned.
The reason is that several major crises occurred when they were students. They were hit by stagnant wages while being burdened by student debt loads. Because of that they became disillusioned with the traditional financial system and started looking for new sources of income. While it might seem counterintuitive, they tend to believe that cryptocurrencies are more stable than the national economy.
Some of them take a measured approach to cryptocurrency investment, while others use cryptocurrencies as a speculative instrument, putting themselves at high risk, while also achieving a higher profit that is unattainable for investors with a traditional investment portfolio.
Millennials are the grandchildren of baby boomers, whose childhood was in the 1960s, and the children of Gen Xers – those who were born before 1984.
Millennials have been raised on the core values of boomers who believe that it is important to have your own house, a stable income, and wealthy retirement. However, they are also interested in modern technology which is typical of their parents. Because of this unique combination of values, millennials are open to new financial trends. If Generation Z children, who have grown up in a digital world, will regard cash as an anachronism, millennials continue to use it. They have been entrusted to preserve the technology for future generations.
Following their traditional values, these young people strive to realize their potential by looking for various ways to top up their retirement account, save up money, and earn more cash. It was easier for their parents and grandparents – when the stakes were higher, and the economy was more stable. Millennials are now at a crossroads, facing a conflict between the old and the new. They still uphold traditional values, but they are looking for new means to achieve their goals.
“Millennials are the bagholders of student debt who’ve been unable to outearn the liability they took on,” says Douglas Boneparth, president of Bone Fide Wealth, a financial adviser. “Even for those who were able to get out from under it, they’ve pushed themselves to the limit to succeed professionally, satisfy that debt, still buy a home and start a family.”
Although millennials are the largest generation in the U.S. labor force, according to data from the Federal Reserve, they own only 5% of the U.S. wealth as of the first quarter of 2021. In 1989, when baby boomers were about the same age as millennials are now, they controlled 21% of the country’s wealth.
“Millennials don’t necessarily have it harder than other generations because there are a lot of things they have easier, mainly through technology,” Boneparth says. “But the financial-economic landscape that they’re dealing with is more challenging than (it was for) their parents and grandparents.”
The best thing that has happened to this generation is technological development. Brokerage and investment have moved online.
Now anyone can manage their capital while sitting at home. Naturally, the appeal of immediate cryptocurrency transactions continuously increases. The investors can even see the result of their actions immediately. The American dream of becoming a millionaire overnight is closer than ever – the volatility of cryptocurrencies is very tempting and can either make an investor lose everything or become rich in no time.
According to a survey from finance firm TIAA, about 37% of millennials believe that investing in cryptocurrencies is a viable way to increase their financial security. About 44% of millennials indicated that they would like to invest or own cryptocurrencies in the future. Interestingly, 65% of cryptocurrency owners are holding their cryptocurrencies for the long term and hoping for a higher profit. While 20% of cryptocurrency owners are holding it over the short term. However, all owners of cryptocurrency use it as a financial tool rather than cash for splurging. They still put profits from cryptocurrency sales into real estate, stocks, retirement, or to pay off their debt.
Another interesting statistic from the Harris Poll survey concerns the ways millennials are getting their information about new technologies.
Boomers and Gen Xers are reliant on financial TV (64%) and websites (14%). Most of the younger people get their information from social media. They believe that this is the most trustworthy first-hand source of information.
In January 2020, the Anketolog Institute of Public Opinion analyzed the attitude toward cryptocurrencies in Russia. Only 23% of respondents are well-informed about cryptocurrencies, while 70% “might have heard something about them”. About 54% of respondents are willing to keep their savings in cryptocurrencies, while half of them would only agree to invest a small amount.
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36% of those surveyed believe that cryptocurrencies are a passing phenomenon, while 21% even consider it to be a fraud or a pyramid scheme. 13% of respondents are confident that cryptocurrency trading is a promising means of increasing one’s capital fast. 70% of Russian citizens do not believe that cryptocurrency could replace the money.
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Does it mean that Russia has been left behind? To some extent, yes. School children and university students receive almost no financial education. Instead of methods of investment, they are more often taught how to keep what they have earned because economic instability does not provide for long-term investment. And way too many Russian citizens do not know anything about equity portfolios.
The cryptocurrency climate in Russia is paradoxical. In the atmosphere of fragile stability, people are not willing to try something new. An open mind in investing is more typical of those who are doing great or those who, like the Ecuadorians, have nothing at all to lose.