The millennial generation is expected to lead mankind into an era of fintech as they push the adoption of Bitcoin in the next decade.
Research has shown that cryptocurrencies are three times as popular as any other generation as a long-term investment vehicle among millennials.
A survey of wealthy millennials conducted in the UK found that 20% have invested in cryptocurrencies. The survey found that 20% of people born between 1981 and 1996 had invested in the crypto space, assuming they had investable assets of £ 25,000 or more. This is significantly more than the national average of 3%. In addition, it is above 29% for Millennials with investable wealth over £ 75,000.
Millennials are killing traditional industries
Some of the main reasons Millennials are switching to cryptocurrencies like Bitcoin to serve as an investment vehicle are:
- High returns from Bitcoin:
In the past, Bitcoin has consistently delivered higher returns compared to stocks with the exception of 2018. Even if a person bought bitcoins at their all-time high and held them for life, their portfolio would be positive.
Over the past decade, the FTSE 100 (the index representing the 100 largest companies on the London Stock Exchange – LSE) has returned an annualized rate of 7.38%. This also applies if the annual return is between -8.73% and + 19.07%. Over the same period, Bitcoin investors only lost money 11% of the days, while the rest benefited 89%.
Below are Bitcoin’s annual returns from 2011 to 2018:
2011: + 1,473%
2012: + 186%
2013: + 5.507%
2015: + 35%
2016: + 125%
2017: + 1,331%
2. Age portfolio
Bitcoin is very volatile, which can be confirmed by its 30-day gains and losses of more than 100% on multiple occasions. However, millennials are still comfortable looking at it as a retirement plan for two main reasons.
First, millennials are far from retirement so they can afford to take risks. Second, they lived through the real estate crisis that was the result of bankers and brokers playing quickly and easily with traditionally “safe” assets like stocks and houses. Bitcoin’s volatility and risk are not a huge problem.
One study found that a 5% allocation of Bitcoin in a traditional portfolio of 40% bonds and 60% stocks could more than double portfolio returns over a four-year period.
3. Digital world
Millennials grew up with and were shaped by the development of the internet. They prefer paying with digital wallets and online banking, which is why Bitcoin appears far more natural as the currency of the digital world for a millennium.
An online survey conducted in 2019 found that people aged 18 to 34 were three times more likely to be familiar with Bitcoin than people over 65 and twice as likely to be as people between 50 and 64. Millennials were more numerous than any age group in terms of familiarity.
Additionally, 59% of millennials had a positive opinion about Bitcoin. This was twice as enthusiastic as people aged 35 to 44 and three times as numerous as people over 60.
These findings are in line with Everett Rogers’ theory of innovation diffusion, which shows that innovators and early adopters of new technology are typically urban, educated, and young.
Tap Global opens up the millennial market
Given that millennials are among the biggest players in crypto, it’s important to understand that these private investors of today can be the institutions of tomorrow.
With millennials’ growing interest in cryptocurrency investing, new tools and platforms are needed to meet the digital demands of young investors.
Tap Global offers a complete crypto marketplace at your fingertips with its crypto banking app. In addition, it offers advanced tools like real-time trading, the ability to see your holdings at a glance, a seamless banking experience, and the ability to spend crypto with a tap of a finger.
Arsen Torosian, CEO of Tap Global, commented, “Millennial investors are keen to invest in cryptocurrency assets. Tap Global has grown significantly since it was publicly unveiled earlier this year. We are currently expanding in the UK and the EU. In addition, a survey conducted by Tap Global found that the majority of our users are between the ages of 18 and 29. “
Given the above factors, the growing millennial preference for trading cryptocurrencies is less surprising than it seems. The members of this generation distrust the stock market and prefer app-based digital investment alternatives such as cryptocurrencies, as these correspond to these preferences.
Going forward, it is expected that an even larger proportion of Millennials would favor crypto investments.
This article was written by Arsen Torosian, CEO of Tap Global