The Bank of America ran a study concluding that 47% of wealthy young investors questioned their digital currencies. Why do they prefer alternative assets? It seems that 75% of them don’t trust traditional commodities such as bonds and stocks to generate a profit. In comparison, they’re interested in how to buy Bitcoin and other cryptocurrencies because they have more faith in them to perform well in the long run. Young investors believe that blockchain technology and the digital asset space will provide the best growth opportunities in the future. One of the reasons why they feel comfortable investing in volatile assets is they have a long time to wait before retiring, so they can adjust their portfolios along the way. 

Bitcoin is one of the main assets that are making their way into young investors’ portfolios. Research shows that Gen Z adults and millennials view investing in digital currencies and NFTs as a great retirement strategy. However, beyond retirement plans, young investors are more comfortable buying digital assets like Bitcoin because they grew in the digital age. 

Why do young investors prefer buying Bitcoin instead of traditional commodities?

Bitcoin is the oldest and most volatile cryptocurrency, but this characteristic doesn’t scare off young investors who prefer investing their funds into innovative digital solutions. According to studies, most Bitcoin investors are young individuals because 50% of millennials admit they trust blockchain technology more than the stock market. 

At the moment, investors worldwide debate about Bitcoin and other cryptocurrencies as future investments or fads. Still, Gen Z adults and millennials continue to purchase virtual currencies, even during bear markets. 

Young people are tech-savvy, and Bitcoin is based on blockchain technology

Seasoned investors doubt diversifying their portfolios using cryptocurrencies because they have enjoyed living in an economically stable environment for a long time. However, young investors have always dealt with insecurity regarding their finances and feel more comfortable putting their savings into a risky asset. Gen Z-ers and Millennials have also grown up using the Internet, smart devices, and having access to information. The older generation doesn’t know much about the Internet, blockchain technology, and cryptocurrencies, but young investors are technologically literate and trust the digital world. 

Seasoned investors find it challenging to trust assets based on technology because they have lived in a different world. But younger ones are quick to embrace anything technology puts to the table because they believe that the digital world is the future. Bitcoin was built using blockchain technology which is thought to revolutionize all industries, so young investors see it as the ideal investment. 

Bitcoin is a social asset

Young people have been using social media platforms since they were children, so they are used to interacting with other people via these platforms. Bitcoin was developed with peer-to-peer technology, which enables crypto users to transfer funds without involving third parties, banks, or the authorities. Therefore, they classify Bitcoin as a social innovation because it prevents intermediaries from getting a hold of their money. They believe that blockchain technology is a solution that will revolutionize how people share value online and do business. 

Bitcoin relies on a network of computers to establish and maintain data. Blockchain technology functions like a public ledger that records all transactions and grants users access to all data. The system is one of the most secure ever created because no one can interfere with the data, so counterfeiting is impossible. Investors access a system that allows them to transfer value or funds without the involvement of a third party. Bitcoin is usually considered a social innovation able to change the way individual and institutional investors share value.  

Young investors aren’t afraid to take risks

Unsurprisingly, Bitcoin and all blockchain-based currencies are highly volatile assets. Therefore, their prices swing constantly, and they can lead to significant gains or losses. However, the increased volatility doesn’t deter Gen Z and Millennial investors from buying Bitcoin because their behavioral psychology makes them risk-takers. 

Seasoned investors are more fearful when it comes to diversifying their portfolios with Bitcoin or other digital assets because the desire to take risks reduces as people get older. Therefore, the investors’ age is one of the reasons why Gen Z-ers and Millennials are more willing to buy Bitcoin even if its value dropped during the bear market. Additionally, many young individuals believe that the virtual world offers the ideal opportunity to make a decent income, so they won’t miss out if their friends have already joined the trend. 

Young investors don’t trust traditional financial institutions

Even if they’re young, Gen Z-ers and millennials have witnessed more than one economic difficulty and financial recession. And even if they didn’t feel their effects directly, they have grown up hearing from their parents how challenging it was for them to pay for their daily expenses. This led them to no longer trust the traditional financial institutions because they considered them responsible for these events. If, in the past, people could make a passive income from leaving their money in the bank, this is no longer the case. The youth understand that traditional financial institutions lack reliability these days and are more proactive in building their wealth. 

Digital currencies like Bitcoin are decentralized in nature, so they are better solutions for the younger generations because they want to stay away from centralized and highly regulated institutions. 

Bitcoin is easily accessible

To invest in traditional assets, people need to learn to manage a brokerage account, take part in trades, and learn how all commodities are tied to silver and gold resources. This could prove challenging for young investors who lack knowledge about traditional assets. On the other hand, buying Bitcoin or other digital assets is more straightforward and makes more sense to them because they have grown up in the digital age. 

Final words

The bottom line is that young investors prefer digital commodities like Bitcoin because it grants them more exposure to innovative technologies that are more likely to drive profit in the future. 

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