Why Do Young Investors Want Crypto in Their Portfolios?
More young Investors are choosing crypto in their portfolios over traditional stocks lately. According to a survey by PwC, we’re seeing a visible trend of the current generation of investors opting for cryptocurrencies over stocks, bonds, and even real estate.
The same survey from PwC found that 22% of millennials with over $100,000 in investable assets chose to invest in cryptocurrency rather than traditional instruments or securities.
This is up from 15% last year and 10% during the first quarter of this year.
But what’s driving this shift?
The reasons include access to lower costs, higher returns, and less volatility than traditional investments.
One investor who participated in the survey said: “Cryptocurrency is more accessible than ever before because it’s cheaper and easier to buy. It’s also more predictable than ever before because it has become so popular with young people.”
Young investors are thus now more interested in cryptocurrencies than they ever were—and for a good reason! With significantly greater volatility than traditional stocks and bonds, the opportunity for high profits is much higher with crypto.
When you combine that with all the excitement that comes from being part of something so new and disruptive (literally), it’s no wonder millennials are turning their attention to this space.
Why is Crypto So Attractive to Millennials?
Does this mean if you’re a young investor looking to get into crypto, it could be the right time to take the plunge? While this is still a risky asset class, it’s worth looking into why it’s trending so big.
What exactly do young investors want? Well, we’ve got some ideas:
Especially because its markets are open 24/7, unlike traditional stock markets, with crypto, the opportunities truly never end!
Cryptocurrency is fast-paced and exciting. It’s not like traditional stock trading, where you have to wait hours or days for an update on how your investments are doing.
You can see quick results right away, which is motivating and exciting to younger investors. This, added to the fact that it’s more liquid and easier to transact P2P (peer-to-peer), means you could be in and out of the market within the same day!
2. Easy Entry
According to Forbes, more than 43% of American males between the ages of 18-29 have at least one cryptocurrency in their portfolio.
Cryptocurrencies are easier to get into than traditional stocks because they don’t require as much documentation. You just need an email address, sometimes a mobile number for 2FA (2-factor authentication), and a willingness to learn how it works.
While a few exchanges around the world still require you to submit your KYC documentation to transact large sums of crypto, this comes down purely to the local laws, meaning that unless your local government requires it, most exchanges will never request it.
While this might sound unsafe, it makes it much easier and less complicated to get in and start trading.
3. Profit Potential
The higher profit potential of cryptocurrencies means there’s less risk involved than traditional investments (which means more opportunities for big returns).
The profit potential that can be achieved in a few months with cryptocurrency can sometimes eclipse what is possible even in 10 years of the stock market.
Since 7%-12% is an acceptable gain in the stock market every year, cryptocurrencies have been known to jump thousands of percent overnight.
Research shows a clear trend in young investors looking to grow their portfolios predominantly with cryptocurrencies over traditional stocks or bonds.
The main reasons for this include the fact that the cryptocurrency market is 24/7, making it much more fast-paced, requiring less (if any) documentation to get started, and can produce more profit with the added volatility it provides.