American public relations giant Edelman believes a “full quarter” of millennials hold and transact using cryptocurrencies, as per recent research concluded in October 2018.
Rising Interest in Cryptocurrencies
According to the Millennials with Money report, the survey recorded responses from “affluent” millennials – those with minimum annual pay of more than $100,000 and/or having $50,000 in invested assets. The research noted 31 percent were interested in actively using cryptocurrencies for transactions, from the 25 percent of individuals vested in digital assets.
Findings suggest that millennials prefer to save cash compared to older generations, which Edelman analysts believe makes crypto-investing and taking associated risks “comfortable” for the demographic. Furthermore, the younger generation “tends to be more skeptical” of the traditional finance sector, which ultimately adds more appeal to blockchain technology and cryptocurrencies.
Deidre Campbell, Edelman’s Global Chair of Financial Services, expressed her surprise at the figures but notes several people “wish they bought it sooner.” She added:
“It’s not inherently that they’re riskier. But rather, better supported with savings. So they’re open to different opportunities.”
Campbell adds the millennial demographic “have a hope” that blockchain and distributed ledger technologies will pave the path towards increased financial security and data ownership.
Interestingly, 75 percent of the surveyed professionals believe the financial system is due for another crisis soon, in comparison to just 58 percent of non-affluent millennials. Comparable percentages for both affluent and non-affluent individuals worry about the global financial system getting hacked, while both groups are also equally fearful of having their personal information stolen.
Changing View of Finance
Edelman referred to a 2016 report by social media giant Facebook that stated only 8 percent of surveyed millennials trust traditional financial institutions for portfolio advice. Such a sentiment has given rise to investing applications like Robinhood and Stash, which are low-cost, accessible, and do not market financial products that promote their self-interest.
The report shows a drastic shift in the way millennials view cryptocurrencies and blockchain technology, compared to two years ago. In 2016, a similar Edelman report found 82 percent of all millennials trusted banks with their investments. However, rising geopolitical tensions, bank frauds, data leaks, and the absence of privacy has led to a reform in the perception around traditional businesses.
In a further two years, Campbell believes the interest in cryptocurrencies will grow multifold, partly due to improving technologies and primarily due to the myriad of accessible investment platforms millennials can choose to invest in.
“They say Millennials will also be the smartest generation of investors because they’ve grown with different fintech platforms. They have more experience with their own money because it’s accessible to them on their phone. It’s giving them more insight and control into their financial future.”
Meanwhile, the report noted millennials choose to follow peer advice instead of professional guidance for investment purposes – which forms an area of concern considering the rising number of scams in the financial market. On the other hand, an estimated 42 percent of individuals seek out professional advice, only to make their own decision afterward.