Did you know that blockchain-based assets are the most common investment young adults hold? The popularity of cryptocurrencies fuels this trend. Additionally, this group of investors are living in an age marked by technological evolution and easy access to information.
Older generations display cautious behavior when they add assets to their investment portfolios. But younger investors are willing to take risks because they trust blockchain technology and its potential. Over the last few years, we noticed that young investors, and mostly students, are taking a keen interest in the BTC price and other blockchain-based assets. More students are buying digital currencies than other groups, with many of them saying they’re using alternative money to pay for purchases and even make revenue.
But are these the only reasons why young adults invest in cryptocurrencies? This article uncovers the main reasons many investors are paying attention to cryptocurrencies.
Young investors don’t trust central banks
Even if they’re still young, many students remember how the financial crash from 2008 impacted their families in the long run. When they began their adult lives, they wanted to make sure they’d never be in such a position, and besides seeking employment from a young age, these people also focused their attention on making money from side gigs like investing in crypto. And even those who didn’t experience the effects of the financial crisis, are aware of its consequences and are more cautious when it comes to interacting with central banks and traditional financial organizations. The fact is that most students and young investors don’t trust centralized banks and prefer alternative investments instead of traditional ones.
Young adults have started gravitating toward modern technologies since a young age, and cryptocurrencies have captured their interest with their unique features. Moreover, most blockchain-based assets are decentralized, so they meet their needs.
Students are familiar with technology
The main difference between young adults and the older generations is that the first category is more familiar and comfortable with Internet-based technology. Nowadays, students have grown up using smartphones, computers, and several other digital devices, so they don’t remember the times when people lacked Internet access. They are ahead of other generations in adopting and using advanced technologies. Therefore, they feel highly comfortable with technology like blockchain, leading them to embrace innovative investment opportunities like cryptocurrencies. This means they are willing to explore the benefits volatile assets like cryptocurrencies offer, even if the sector is known for its lack of stability and high level of risk.
Young people have a positive outlook
Another reason why students and young entrepreneurs aren’t afraid to put their money into digital assets is they have a positive outlook on blockchain technology. As mentioned, they grew up with Internet-based technologies and digital devices, so they trust that blockchain technology will advance and bring further benefits.
Even if some of them are aware that investing in the crypto sector is risky, they are willing to take the risk when it comes to blockchain technology because it promises unique advantages compared to traditional commodities. Young people tend to see value in investing in something different because they trust the technology behind it. Very few students and young investors are interested in buying shares, stocks, or other kinds of traditional assets controlled by organizations and central authorities.
Students are happy to join a community
Many students invest in cryptocurrencies like Shiba Inu, Ethereum, and Dogecoin because they provide a sense of community. They find this kind of alternative investment entertaining because they can engage with others who share their interest in blockchain technology. They are looking to invest in commodities that allow them to connect with other young investors, and cryptocurrencies are better than traditional assets at doing this. Students are also familiar with social media and use it to research investment strategies and stay up to date with the state of the market.
What principles do students follow when investing in crypto?
They limit the amount of cash they inject into cryptocurrencies
We’re talking about students; therefore their available finances are limited, so they cannot splurge on buying digital currencies. They are the generation that grew up in the era of social media and technological advancement, so they can easily access investment advice. They use platforms like Instagram and TikTok to learn how to make a profit with a low investment, and even if they’re enthusiastic about buying cryptocurrencies, they invest relatively small sums of money. However, they have witnessed the evolution of tech giants and are confident that the digital economy is on the rise and tech advancements could bring them a return on investment.
They diversify their investments
While they focus all their attention on the digital economy, they follow the diversification principle and invest in multiple projects to limit their risk exposure. The rise of blockchain technology facilitated the development of diverse projects, which allows young entrepreneurs to invest in different digital assets. They usually add more than one cryptocurrency to their portfolios and carefully pick them to differ in purpose and underlying technology.
While most of them start by investing in well-known cryptocurrencies like Ethereum and Bitcoin, as they gain industry knowledge, they also open their portfolios to welcome cryptocurrencies with lower market capitalization. However, the projects mentioned last have the greatest fluctuations in price, and if they apply the right strategies, they’ll gain the most profit out of them.
Investing in cryptocurrencies makes students confident and enthusiastic
Many young investors are optimistic about digital currencies, but there are also skeptics. Some students still believe buying digital currencies needs clarification because they need more information about the sector. However, even those quickly change their opinions when interacting with peers who make money from the sector. As mentioned earlier, they grew up using computers and are used to technology. Hence, they can easily recognize the potential behind a technology like blockchain.
Time will tell if the young investors from today continue to focus their attention on alternative assets and switch the focus from traditional commodities to blockchain-based ones.
