In 2017, Bitcoin nearly reached a peak value of $20,000 but still remains extremely volatile. In recent days the value of Bitcoin fell below $6000 which scraped more than $100 billion in valuation since February. The overall cryptoasset market has not fared any better and plunged more than 50 percent since early January. However, even after the extreme volatility of cryptoassets, some millennials are more comfortable putting money in the cryptoasset market rather than the stock market. What is the reason behind that?
Why do millennials regard the stock market with skepticism?
The willingness to invest in the cryptoasset market even after knowledge of its volatility is linked with the 2008 financial crisis and the stock market crash. Studies show that people between the ages of 18 and 39 are more reluctant to investing in the stock market compared to other generations. Many of them saw 50% or more money getting wiped off from their parents or older siblings. According to a survey of U.S. adults conducted by Bankrate, millennials prefer real estate, cash, and even gold ahead of stocks. Only 33% of the millennials invest in the stock market compared to 51% of their older generation. Bitcoin and other cryptoassets were created after the 2008 financial crisis. Moreover, these cryptoassets don’t rely on big banks. Bitcoin’s decentralized system brings with it a new hope for a new economy.
Millennials have a troublesome trend of spending big, even if they lack the financial support. The ever-increasing exposure to media, which encourages them to find fulfillment in clothes, entertainment and other luxuries is a primary reason. Millennials seem to have different goals — they value experiences more than their previous generations. That’s why, millennials are more likely to spend on a vacation than their parents. Considering the variety of items in their shopping list, they tend to look towards cryptoassets as an instrument of investment.
Regardless of the reason for their interest in cryptoasset, millennials are indisputably crucial to the survival of blockchains. With bitcoin viewed as digital gold, it is far from the mainstream finance. No wonder millennials prefer cryptoassets which keeps them away from the Wall Street.
The recklessness of some cryptoasset fans
Some cryptoasset fans believe that bitcoin is the ideal investment choice just because it is hot right now. Andrea Coombes, retirement and investing specialist at personal finance resource Nerdwallet said, “This (trend) is pretty concerning,” she said. “If you want to spend money to play with cryptoasset, by all means, go ahead, but make sure it’s money you are willing to lose.” The tales of people getting rich quickly by investing in bitcoins has tempted many cryptoasset fans to invest in them.
The trend
Still, millennials are more than willing to invest in cryptoassets as account opening is easy and cheap. The barrier to entry is thus broken down. Apps like Acrons target millennials who are willing to invest in cryptoassets with small amounts of money. As the Dow has tumbled more than 1,000 points, many investors have been dealing in cryptoassets during the first week of February.
Many millennials have never invested a single dollar in the stock market but are spending weeks researching cryptoassets. One such example is New York-based public relations associate Carissa Hilliard. She invested $100 in cryptoassets but never purchased even a single stock. “I’ve always wanted to invest but it seemed like you needed to have an extensive background in it to do well,” she said. “With crypto, I felt it evened the playing field more because it was new.”
Also Read:
https://blog.unocoin.com/how-to-maximize-the-returns-on-cryptoasset-investments-9238ddd6c235
