Millennials are responsible for driving a mass shift in the investing industry.
Gone are the days of them being backseat drivers; time has put them behind the wheel and has millennials determining the direction of the industry.
Millennials have brought some of the most significant changes in the stock trading and investing industry, with companies like RobinHood leading the way to change.
Cryptocurrency Markets as The Poster Child
The shift in the way people invest is no more evident than in cryptocurrencies; millennials have taken crypto to new heights.
While most gen Xers and boomers saw crypto as nothing more than a passing fad, the dedication, and work that millennials have put into cryptocurrencies like Bitcoin and Ethereum has made it clear that cryptocurrencies are here to stay.
Millennials currently hold more purchasing power than any other generation. This power, coupled with the highest investment knowledge of any generation before them, makes their influence over the investment industry undeniable.
Millennials and Investing
The Covid pandemic has seen Millennials uphold some of their leading points of view, at least in terms of their approach to financial decisions:
Increased Cryptocurrency Investments
In the past two years, the value of some younger cryptocurrencies and DeFi tokens has increased by over ten times their original values.
Even with established cryptocurrencies like Bitcoin and Ethereum rising by six times in the past year, millennials' investments have shown their power to drive healthy investments.
"Meme stocks" are those of companies that faced heavy shorts from powerful Wall Street shops.
Still, due to a crowd of ambitious Millennial Redditors, these companies saw a short but profitable jump in share prices that gave many a hedge fund a headache.
You might not agree with their ethos and execution. Still, the ability to get coordinated on an anonymous message board where anyone can easily lie, and to coordinate without a leader, deserves to be praised.
Blockchain Tech Boost
Millennials played a massive role in driving the rise of decentralized finance that uses blockchain technology to evolve business practices. The Millennial purchase power has been cited as the main reason for blockchain's success.
Millennials are responsible for creating and selling non-fungible tokens (NFTs), with the NFT industry skyrocketing to over $2 billion in value in the first six months of 2021.
Millennials and Cryptocurrency
While Millennials have shown interest in all forms of investing, cryptocurrency is by far the industry of choice for them. The activity displayed by Millennials is clear as day to those who look at companies founded and supported by this generation.
Shortly after going public, Coinbase's value rose to close to $50 billion due to the swarm of new investors, most of whom are Millennials.
Robinhood, which boasts an average user age of 31yrs old, saw an early valuation of over $30 billion, not just for its stock investments but mainly for its dealings with cryptocurrencies like Dogecoin and Bitcoin.
Why Millennials Love Cryptocurrency
There is no doubt that Millennials have fallen in love with cryptocurrencies. With no foreseeable end to this relationship coming, new cryptocurrency exchanges are popping up every month. Here are just a few reasons why Millennials are crazy about crypto:
Millennials have taken notice of cryptocurrencies' undeniably higher yields when compared to traditional stocks. (Higher yields are not always higher yields on cost though.)
While benchmark indices have only seen a rise in the region of 20%, some digital currencies have grown by a whopping 500%. With new crypto options regularly available, getting in on early and cheap buy-ins is an attractive prospect.
One needs to look at Bitcoin's initial value and compare that to the present to see why purchasing new cryptocurrencies is a worth risk; returns on even the most minor investment could be life-changing.
With the pandemic costing many Millennials their jobs, liquidity increased, and banks provided more loans to people, there was a sharp increase in the number of people investing in cryptocurrencies as a potentially high return way to supplement a now reduced income.
NFT games like Axie Infinity have created an income opportunity that anyone with a mobile phone can take advantage of. These games have led to thousands of Millennials deciding not to return to work as things return to normal. Instead, they earn a better living from home thanks to blockchain and crypto.
Social media is flooded with cryptocurrency influencers posting video tutorials on how to get started.
There are also tons of success stories that seem too good to be true; the difference with these crypto stories is that most are true. A growing number of people in their early 30's becoming millionaires thanks to cryptocurrencies, while their “smarter” peers are rotting away trying to make it in corporate.
With the news of this spreading on social feeds, Millennials feel like there is no better time than the present to get into crypto trading.
Future of Finance
Blockchain technology and cryptocurrencies are creating a decentralized financial landscape. This landscape offers many new apps that make getting a loan or using crypto collateral a reality. Millennials understand that this decentralization is the future of finance.
If you look back ten years, it was impossible to earn a living by playing a game on your mobile phone, but thanks to cryptocurrencies, that is now not only a possibility, it is also relatively easy to get started. The market is flooded with new NFT games with cheap buy-ins and high potential returns for those willing to take a chance.
Using cryptocurrency for payments is simpler than ever before; it is also easier to start investing and earning yield and interests from crypto than it is to open a traditional bank account.
Companies like Skrill and PayPal understand the demand for fast transactions and have built their business simply on catering to Millennials' need for speed.
But traditional investing and trading has not innovated yet, and stock picking and waiting ages for the right time to sell do not meet Millennials' expectations.
Millennials' love for cryptocurrencies, blockchain technology, NFTs, and other digital currency is clearly not a fleeting feeling.
The success of top cryptocurrency trading apps during an otherwise financially dire time of pandemic is clear evidence of Millennial purchasing power and the ability to drive change.
With the growing cryptocurrency market and more Millennials acquiring the knowledge and financial ability to invest, this generation's future of finance is being shaped.