How Gen Z Won’t Invest in Crypto – UtopiaPress
Learning how to invest properly usually fails in our 20s
I’m going to take a devil’s advocate position here backed up by research, so hear me out.
There is this stereotype that young people love Bitcoin and crypto. The reality is most of them are too poor, saddled with student loans and economic and career uncertainty to invest much of anything into it.
Generation Z are teens and young graduates who are now young adults born after 1995 and aged between 13 and 24. They are widely speculated to be more pragmatic and career orientated than Millennials and hyper aware of the competitive and scarcity aspect of America’s new version of capitalism.
Most young professionals in their 20s are too timid and risk-averse (scared) to invest much. As much as we like the comfort of a chequeing account with a bit of emergency savings, there’s a little thing called compound returns and interest.
The 20s are supposed to be the decade when we experience the world, try new things and live and experiment, and while a few blockchain engineers in the Gen Z range have popularized things like Ethereum and crypto, and may follow Bitcoin, it turns out GenZ as a whole generation of people aren’t willing to bet their life savings on them.
Most Gen Z Don’t consider Crypto a Good Bet
Generation Z does not plan to buy cryptocurrency, according to the results of a survey conducted by Business Insider released on July 5. I first discovered this news on Coinbase.
Per the report, SurveyMonkey Audience partner Cint surveyed 1,884 U.S. residents between ages 13 to 21 (GenZ actually includes members a few years older too) to learn the opinions Generation Z. The survey participants were asked how likely they were to purchase cryptocurrency in the next six months, and over 52% answered: “not at all.”
Gen Z Don’t Have it Easy
GenZ will have to work very hard to attain economic security, harder perhaps than any other generation in North America in many decades.
While less Millennials participate on Wall Street investing in traditional stocks, that may also be due to 2008 and the fact Millennials found less career security even with a University degree, than they expected.
You basically have to be middle class or higher to have funds to invest in crypto, unless you are in the developing world and are okay to follow bounty crypto programs where you must accomplish tasks to get airdrops.
Generation Z don’t have it easy due to:
- Rising housing and healthcare costs
- A morbid student debt crisis and spiraling student debt loans
- Credit card debt
- A decline of financial literacy
- Rising costs of food
- A growing lack of social support
- A more competitive and more dysfunctional capitalism
- A decline in social mobility in social economic terms
- A period marked by financial, economic and professional uncertainty generally speaking.
Nothing Beats Compound Returns
After seeing the impact of compound interest and the general impact in compound returns in smart investments, the crypto market might just look like gambling and games to young people. One single Bitcoin today is $11,800 — show me a teenager that wants to own one at this rate?
No matter your age, the whole concept of investing can be intimidating. But investing in crypto appears particularly fraught with the chances of fraud, cybersecurity vulnerabilities and just not knowing of these digital assets will have a valid future. Whatever your stance on ICOs, it’s difficult to compare crypto with traditional stocks in terms of ROI.
Players of Crowd Sentiment
As for the recent study on GenZ’s appetite for crypto, only 5% answered “extremely likely,” 6% “very likely,” 15% “somewhat likely,” and 17% “not so likely,” while 4% gave different, unspecified answers. Still, while the results of the survey have just been released, it was conducted in January, before the recent bull market started.
Sorry blockchain startups, don’t look at teenagers to be your crypto investors. They might enjoy earning crypto tokens with video content but that’s about as far as it will go for most of them.
While digital banks earn higher interests on cash and even GICs, the compound gains of smart investing in traditional markets, will be difficult to match in cryptocurrencies markets.
Meanwhile, a majority of Gen Z are not going to buy Bitcoin or other digital currencies in the nearest future, according to the recent research performed by Business Insider. Millennials are late to start families, own homes and move on with their lives, meanwhile Gen Z may take different paths altogether that favor work (and freedom) over life transitions.
Crypto didn’t just make a few Millennials rich, it burnt a lot of others. That’s the stories they don’t tell you about Ethereum and Bitcoin. Gen Z on the other hand, are likely to take all of the learnings of Millennials into account, and just live professionally and with their own finances, a bit smarter.
Published at Mon, 08 Jul 2019 18:08:42 +0000
