Younger Generations Inclined toward Crypto- Owning Bitcoin vs. Buying a House?
In recent times, the way younger generations invest their money is changing considerably. A recent survey by Policygenius revealed a surprising and rather interesting trend- millennials and Gen Z are just as likely to own cryptocurrency (around 21%) as they are to own real estate (around 20%). This shift in wealth storage behavior has several likely causes. Let’s look at a few reasons.
Why the Housing Market Is not Appealing to Young Adults
Owning a home used to be the very foundation of the American dream. However, for millennials and Gen Z, the dream seems increasingly out of reach. Here is why:
High housing costs- Home affordability is at a historic low. Factors like rising interest rates, stagnant wages, and limited housing supply have pushed prices to record highs. For example, in some areas, housing prices have skyrocketed, while minimum wage increases have not kept pace. This has made it increasingly difficult for young adults to save enough for a down payment.
Generational wealth gap- Baby boomers, on the other hand, have benefited significantly from rising real estate prices. This appreciation represents a large portion of their wealth. In contrast, younger generations have not had the same opportunities to build wealth through traditional means.
Cryptocurrency- A New Investment Avenue
With the conventional path to homeownership becoming increasingly challenging, younger generations are turning to alternative investment options. Here is what makes cryptocurrency attractive:
Accessibility- Unlike real estate, which requires a significant upfront investment, cryptocurrency can be bought with any amount of money- all you need is an internet connection, and you are good to go.
Potential for High Returns—Bitcoin, the most popular cryptocurrency, has seen its price surge in recent months. While past performance is not a determinant of future results, the possibility of high returns makes crypto an intriguing option for young investors who want to grow their wealth quickly.
How Younger Generations Approach Money Generally
The Policygenius survey also revealed some interesting insights into how millennials and Gen Z manage their finances and this does not pertain to crypto only.
Social Media Influence- Younger generations are more likely to turn to social media for financial advice compared to older demographics. They also experiment with trending financial hacks like no-spend challenges and credit card rewards optimization strategies.
Risk Tolerance- The survey suggests that millennials and Gen Z are generally more willing to take risks with their money compared to older generations. This could explain their attraction to the volatile world of cryptocurrency.
What This Means for the Future
The increasing popularity of cryptocurrency among younger generations represents a significant shift in investment trends. However, cryptocurrency is a relatively new asset class with inherent risks. Investors should always conduct their research and understand the risks involved before investing.
While the long-term impact of this trend remains to be seen, one thing is clear—younger generations are approaching wealth management differently. They are exploring new options and leveraging technology to successfully navigate a challenging financial landscape.
https://finance.yahoo.com/news/kids-not-gen-zers-millennials-162115645.html
