Over a quarter of affluent millennials are currently using or holding cryptocurrencies. According to a Millennials & Money Report by Edelman’s Financial Services Sector Team, many affluent millennials have diversified their portfolio holdings into cryptocurrencies because they are wary of the financial system and concerned with the international ever-growing uncertain economic environment.
Disruptive Technologies Can Help With Financial Goals
According to the Edelman report, millennials are very open and embracing of new disruptive technologies like blockchain and cryptocurrencies. Many millennials believe that leveraging emerging technology and their services can help them achieve their financial goals.
The paper found that overall, 25 percent of affluent millennials are currently using cryptocurrencies, 61 percent are already using peer-to-peer payment apps, and 31 percent are considering investing in cryptoassets. The Edelman report and research is based on an online survey of 1,000 affluent millennials aged 24-38. Affluent millennials are defined as people with $50,000 in investable assets or $100,000 in individual or joint incomes.
The numbers and millennial’s optimistic approach towards emerging technologies show that each generation has a very different mindset and approach when it comes to their finances and their view on the existing financial system. Yahoo Finance mentioned that the percentages surprised Deidre Campbell, Edelman’s Global Chair of Financial Services, however, it’s not a very shocking figure for many millennials that Campbell has spoken to.
“Anyone that has crypto tells me they wish they bought it sooner,” said Campbell.
“I think it’s a sense of a younger generation being open to more risk in their portfolio and willing to try new things with crypto.”
Although the cryptocurrency market is experiencing a bearish year, after their bullish growth in 2017, many millennials still expressed interest in learning more about cryptocurrencies and investing in these digital assets. Campbell mentioned that since millennials have a strong saving habit, they’re more open to different opportunities. It may appear as if they take a lot more risks. However, the millennials’ savings, allows them to engage in such risks.
Skeptical of the Financial System
The Edelman report also found that many millennials, especially affluent millennials are very skeptical and concerned about the existing financial system. 77 percent see that the whole financial system is designed to favor the rich and powerful at the expense of everyday people. Not only do millennials feel as though the system is rigged, but there are also overwhelming concerns about its lack of security.
75 percent worry that someone will hack the global financial system and they will steal their personal information. 77 percent also believe that it’s only a matter of time where the bad behavior from the financial industry will lead the world into another global financial crisis.
A vast majority of millennials also have a lot of difficult shopping for financial services and products. Not only are they suspicious of the system, but the current customer experience is too confusing and difficult to navigate. The report found that 80 percent of affluent millennials are suspicious of recommendations made by someone in financial services which earns a commission.
A Facebook report in 2016 also had similar conclusions. Only 8 percent of millennials trusted the advice and guidance from large financial institutions. The divide and distrust in the system have, however, given rise to many new savings, investing and financial advice applications such as Stash, Robinhood, and Acorns. These apps are generally easy to use, low-cost and can be easily accessed, which is very appealing to millennials, especially those who are looking for riskier types of investments.
Campbell was therefore not surprised that, with such a negative outlook on financial institutions, the survey demonstrated that 74 percent of affluent millennials believe that blockchain technology will help make the global financial system more transparent and secure. Campbell noted that a lot of people believe that blockchain can help resolve the current issues concerning security and data security, in the future.
Growing Pessimism May Spurn Greater Interest in Crypto
Yahoo Finance, however, noted that viewpoints and outlooks could change very quickly. An Edelman Report in 2016, just two years ago, indicated that 82 percent of millennials trusted banks, which was 18 percent more than the general population. Campbell believes that over the past two years, with the growing, near-daily geopolitical unrest, many millennials are looking to diversify their portfolio because they live in a riskier economic environment.
Growing economic uncertainty may, however, spurn further interest in cryptocurrencies. Campbell predicted that innovation would increase in the cryptocurrency sector, especially as other disciplines like quantum computing and artificial intelligence develop and build over time.