One of the positive outcomes of the boom and bust has been luring millennials into investing in traditional assets, a new study carried out by social and multi-asset brokerage firm eToro says.
According to eToro, around 73% of the new investors the firm recruited in 2017 and 2018 bought . Approximately 11% of these investors have since then gone on to put their money in traditional assets besides crypto. This includes commodities, stocks and forex.
The diversification was especially prevalent among millennials (ages 25-34) as 44% of the respondents in this demographic broadened their portfolios.
bitcoin Flattened the Investing Landscape?
eToro’s UK Managing Director, Iqbal Gandham, observed that had demystified investing and enhanced accessibility to investment products:
For too long investing has been seen as the preserve of the wealthy and/or something that is too complicated for the average man on the street. Crypto changed that.
This is not the first time that are being credited for spurring interest in other assets. Earlier this year, the CEO and founder of startup Freetrade, Adam Dodds, made the same observation. According to , Dodds stated that the boom of late 2017 had hooked millennials into stocks.
was a ‘gateway drug’ to hook millennials into market , says Freetrade founder
— Telegraph Technology Intelligence (@TelegraphTech)
‘bitcoin is the Gateway Cannabis to Other Investments’
Specifically, Dodds likened to ‘pot’:
It was a kind of gateway drug… but instead of pot to heroin, it was a drug to something better.
Dodds also added that the opportunities that young people were exposed to by the crypto boom opened their eyes:
Young people realised they could invest their money in a smart way, after the crypto fad.
Despite the fact that a significant number of millennials have shown interest in diversifying investments, a recent survey showed that they are more distrustful of traditional investments and markets compared to their older demographics. A survey conducted by eToro US recently showed that 43% of millennials more than U.S. stock exchanges.
Why Does Such a High Number of Millennials Trust bitcoin Exchanges More Than Stock Exchanges?
Per the survey, millennials trust crypto exchanges more than stock exchanges due to the immutable nature of . Thus millennials view exchanges as less susceptible to manipulation. Additionally, they are of the view that bad actors are less likely to be rewarded with taxpayer dollars.
43% of ‘Clueless’ Millennials Trust Crypto Exchanges Over Stock Market: Survey
— Crypto News (@PaveIt_)
In contrast, 77% of Generation X (those born between 1965 and 1979) indicated that they trusted stock exchanges more than they trusted exchanges.
Part of the distrust that millennials have formed of the stock market comes from their experiences. Specifically, millennials were beginning their adult lives during the 2008 global financial crisis and the subsequent market crash. These events made them cautious and somewhat risk-averse, according to . Consequently, Millennials were more likely to hold twice as much cash in their investment portfolios relative to Generation X.
Published at Wed, 27 Feb 2019 16:13:46 +0000
