The 2022 Investopedia Financial Literacy survey questioned 4000 Americans about their investment preferences, and the younger generation has come out to be more eager about digital currency investment than their counterparts. However, this doesn’t mean that there aren’t people questioning every crypto move, especially millennials and Gen Z.
Millennials possess higher cryptocurrency investment habits
Amongst all the generations, millennials are likely to invest in cryptocurrency. 64% of millennials reported currently having investments, while 38% indicated they have some form of ongoing crypto investments. Of all the millennials, over 60% have digital currencies in their possession. In fact, 15% of millennials said they own a non-fungible token (NFT), a digital asset similar to cryptocurrency and based on the blockchain concept.
Investopedia reports that millennials are most likely to invest in cryptocurrency as they don’t have personal commitments, are far away from retirements, and, therefore, willing to take on a higher financial risk. Boomers, on the contrary, are more cautious around cryptocurrency investments as they fear the loss of money due to the dynamic nature of the crypto market. Therefore, only 6% reported investing in cryptocurrencies. When it comes to NFTs, 0% of baby boomers reported any investment in them. Therefore, the best bet for baby boomers is mutual funds and real estate.
Gen Z and Gen X also aggressive around crypto investments
Gen X is also likely to invest in cryptocurrency, while Gen Z reported that 28% currently own a cryptocurrency of some sort. Both Gen X and Gen Z are the second most common and preferred investments, post mutual funds and stocks. The study also believed that cryptocurrency would offer better returns than stocks and mutual funds by the end of the decade.
Millennials, Gen Z and Gen X to receive the best returns from crypto
Cryptocurrency returns have overshadowed all the other investments from 2017 to 2021. Although the market is prone to sudden price drops, cryptocurrency has received immense success global-wide. A recent stride of investments coupled with advertising by crypto companies is likely to attract more investors.
However, while several investors are optimistic about crypto, any feel it is too risky and confusing. Baby boomers are not used to computers; therefore, they aren’t aware of the new asset class, which is why they prefer to stick to the legacy investment options. Even amongst new millennials, cryptocurrency feels like a confusing affair. Currently, there is a big mix of confusion and optimism, but nothing can deny that it is the future of finance.