● 43% of millennial online traders say they have more faith in crypto than in the stock market
● 71% of millennials would invest in crypto if offered by traditional financial institutions
● Half of online investors expressed interest in a crypto allocation in their 401k (pension) plans
Millennials have long been considered a target market for financial firms. As more Generation Y members become an influential part of the workforce, and subsequently, the global economy, new trends emerge, incorporating their innovative traits and novel desires. One area that will potentially increase dramatically in popularity due to this generation is crypto, as a recent survey commissioned by eToro US asserts.
According to the survey, millennials would be much more inclined to enter the crypto space if such services were offered by traditional institutions, and existing crypto traders would invest more money in cryptocurrencies if that were the case. Moreover, Generation Y members have declared outright that they’re shifting trust from stocks and towards crypto — nearly half of the millennials surveyed said that they trust crypto more than traditional markets.
New generation, new investment goals
The survey, conducted by independent research firm, Provoke Insights, sampled more than 1,000 Americans, aged 20-65, questioning them about their trading and investing habits and wishes. While the results clearly indicated that millennials are more in favour of crypto, older generations also showed an interest in the emerging financial sector. In fact, 59% of all respondents said that they would invest in crypto, if offered by a traditional financial institution, such as TD Ameritrade, Fidelity or Charles Schwab.
“We’re seeing the beginning of a generational shift in trust from traditional stock exchanges to crypto exchanges,” says Guy Hirsch, Managing Director of eToro US. “Younger investors’ experience with the stock market has seen a great deal of loss of trust, with the fall of Lehman Brothers because of irresponsible practices followed by the worst recession since the Great Depression. As more investors become educated in the benefits of blockchain, we’ll continue to see this trend play out.”
Finding a middle ground
While the majority of millennials surveyed showed support for crypto, 77% of Generation X respondents said they still have more faith in the stock market. This faith in traditional markets is in line with their inclination to invest in crypto if offered by a well-known, mainstream financial institution. This might present a new opportunity for traditional institutions: adding crypto to their offering could attract new millennial investors and encourage older investors to add to their existing portfolios.
But the interest in crypto doesn’t stop at proactive investment. The survey also showed that 74% of crypto traders and 45% of those who don’t trade crypto, would like to see some of their 401k (pension) plans allocated to cryptoassets. “While there is clearly a demand for crypto assets in 401k portfolios, there are a number of regulatory and market changes that need to occur before it becomes a mainstream offering. We would need to see more advisors become educated in crypto assets and getting comfortable recommending their customers to shift into crypto markets from traditional equity markets. Mainstream traction will also be aided by the approval of ETFs that track crypto assets. At that point, we could see crypto offerings in 401k portfolios,” Hirsch concluded.
Riding the crypto wave
Perhaps the most significant takeaway from the eToro survey is that traditional finance and crypto needn’t be on opposite ends of the spectrum. Combining the perceived trust of traditional institutions with the allure of the crypto market could be the formula that will help financial firms attract new customers, while giving the crypto market a boost. The crypto tide is happening, and financial institutions who ride the wave could come out on top.
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