Why Millennials Are A Major Driving Force In Cryptocurrency Space
According to Pew Research Center, anyone born between 1981 and 1996 is considered a Millennial or belonging to Generation Y/Gen Y. They are currently between 24 to 40 years old.
A well-known characteristic of this generation is that they are more tech-savvy than previous generations due to their early adoption of technology. As such, technology is seamlessly integrated into daily life in a way that feels entirely natural.
Since the introduction of the smartphone, the extent to which Millennials have adopted the now essential gadget is astounding.
Everything from shopping assistance, meal planning, and the cooking cycle is at their disposal through the click of a bottom — and cryptocurrency factors into this nicely.
As the fintech ecosystem evolves, a symbiotic relationship that is at par with the generations emerges.
Today, traditional banks are facing stiff competition from digital-only and branchless banks that provide services via digital channels at an unprecedented pace. And Millennials are bullish on the convenience that comes with digital assets like cryptocurrency.
And as new-era DIY investors, they want to manage their money themselves.
Although we have recently witnessed broader adoption by the high-net-worth individuals from the demographic cohort preceding Gen Y, clientele comprising millennials have been a vital driving force in this space.
Considering that this generation grew up in the digital age and has had a genuinely positive outlook on all things digital, it becomes apparent why Millennials prefer crypto assets and the technology surrounding it.
In May this year, Mastercard New Pay Index reported that 40% of Millennials showed interest in using crypto wallets in the next 12 months, while 67% of those polled in the survey considered turning to investments like digital coins due to their increased attractiveness, and 75% said they would leverage the asset class to conduct trade and transactions if they understood it better.
Given cryptocurrency, as an asset class fits perfectly into the lifestyle of millennials.
Here are the key reasons as to why millennials are switching toward an asset class like Bitcoin.
High Returns of Cryptocurrencies
Millennials are notorious for their desire to see their aspirations being fulfilled immediately with minimal time spent. Similar strives can also be observed in today’s fintech domain. While assets that generate high returns quickly are fewer and far between, most popular digital assets like Bitcoin are an exception.
Since the first asset class, such as Bitcoin, first took the spotlight in 2009, cryptocurrency has become an attractive digital currency. But unlike a stock, Bitcoin as a digital currency has consistently earned higher returns except in 2018. Millennials believe that crypto will be worth more in the future, which increased their demand for it. As a result of the belief that digital currencies will be worth more than they are today, their value continues to grow.
According to CrunchBase estimates, Bitcoin saw an unprecedented increase, with its value witnessing a colossal 300% increase while Ethereum (the largest cryptocurrency by market capitalization) rose almost 1,000 percent in 2020.
Retirement Portfolio Item
It is well-documented that digital assets have a history of wild value swings, meaning they are highly volatile. As such, risk and returns relating to cryptocurrency are relatively high. Even so, millennials are willing to live its crypto volatility and consider welcoming the likes of bitcoin to their retirement portfolios.
First, young investors — including millennials and Generation X, don’t have access to employer-provided retirement plans. This makes saving difficult in general. So, looking for investments that can fund a comfortable retirement is why this demographic cohort invests in cryptocurrency.
Secondly, as new-era investors, millennials tend to take risks. They have more time to experiment with new cryptos and build investing experience.
As per the findings of the latest E-Trade Financial Streetwise tracking survey, it was determined that the risk appetite among young investors has grown since the outbreak of the coronavirus pandemic. To a large extent, Smutny and others explain that millennials’ ability to take the risk is an aspect that serves as a motivational factor to invest in cryptocurrency.
Crypto As a Reward Premise
It has been reported in the latest Harris Poll that 44% of the survey participants demonstrated their interest in receiving digital currencies as an alternative to traditional cashback reward programs. Most credit card issuers comprise card-linked offers among their benefits. Multinational financial services corporations, such as America Express and VISA, have already folded cryptocurrencies into their card-linked models.
Visa was the first company to launch a credit card practically named BlockFi Rewards Visa Signature Credit. It rewards customers with the cryptocurrency rather than points or miles rewards structure. This first-of-its-kind credit card was launched this spring following a successful partnership between Visa and cryptocurrency tech company BLockFi.
In essence, the value proposition of the new BlockFi Rewards Credit Card is to allow cardholders to earn 1.5% cashback on any purchase, which will automatically be added into the user’s BLockFi account every month.
