on the crypto
The demand for digital assets is on the rise as investors redirect their funds to innovative, yet speculative and immature technologies, such as blockchain. Cryptocurrencies are building credibility from mass attention. A study conducted by CryptoVantage reveals unknown data indices regarding generational investment behavior.
On average, there is some profit to be made
The “Generational Philosophies on Investing in Crypto” survey, conducted by CryptoVantage, included 1.044 participants from Generation X, xennial and millennial, with the aim of uncovering market assumptions about their cryptocurrency investment preferences.
While some data indices were evident without study, the results indicated that millennial traders had more cryptocurrencies in their wallets. More specifically, millennials owned 12% of their cryptocurrency investment portfolios, while Gen Xers owned only 6,3% and xennials owned 9,2%. With Bitcoin reaching its next bullish cycle (find out how buy Bitcoins), data shows that 3 out of 4 traders made a profit while trading cryptocurrencies.
The data shows that only 76,2% of millennials made a profit from trading cryptocurrencies, compared to 80,5% of xennials. In the research entitled "Distrust of speculation?" The author points out that generational differences between investors play a role in influencing traders' decisions. Furthermore, it shows a generational discrepancy when it comes to choosing tokens, although Bitcoin still remains the preferred currency.
The role of influence in their journey into the world of cryptocurrencies
Previous research showed that only 16,9% of investors fully understand cryptocurrencies and 33% described their level of knowledge as "emerging". Now, the new data shows that the same behavioral notes are reproduced, meaning that only 30% of investors have done extensive research before investing, while the other 70% have done little or no research.
Information about cryptocurrencies tends to permeate circles of close friends, with xennials noting that they tended to gather information from social media, "preferring to learn about cryptocurrencies from Facebook, before reaching out to friends." Interestingly, 39% of respondents agreed that Elon Musk is a useful crypto figure in aiding decision making. The aforementioned February data shows that 28% of novice investors increased their positions based on Elon Musk's social media interactions.
What is the way forward?
Although the data shows a bullish scenario, there are indicators that give a gloomy outlook. Income Sharks tweeted that retail investors are the ones who bring volatility to the market, however bullish runs typically occur when retail interest is high. CryptoVantage's survey revealed that curiosity was the determining factor for investing in cryptocurrencies, mainly due to the potentially high financial returns.
As VanEck's John Patrick Lee notes, “there is a huge transfer of generational wealth” and millennials are the only respondents who have invested to “diversify their portfolio”. This adds purpose to Lee's emphasis that “young people are investing in new ways” as they are more willing and quicker to adopt new technologies and modern ways of thinking.
What's noteworthy is that, despite users being heavily integrated into cryptocurrencies, the May 2021 price plunge completely pushed out most retail investors. In addition to that, Robinhood stated that trading volume was decreasing, indicating the disinterest of young investors as the pandemic draws to a close.
