You might have noticed how crypto buzz words tend to cater to the jargon of the youth. We see this in the recent trends where crypto-fueled video games are focused on entertaining and empowering younger generations.
Crypto user demographics
According to the 2021 user data collected by Paxful, one of the world’s leading peer-to-peer crypto marketplaces, 32.21% of traders are reportedly 18-24 years old while another 32.76% are in the 25-34 age group.
This trend continues with the next largest share belonging to the 35-44 range at 16.42%, nowhere close to the two previous groups. The succeeding age groups then come in at 9.21% for 45-54, 5.65% for 55-64, and a mere 3.75% for traders age 65 and above.
As you can see, the majority of crypto traders reside within the age range of 18-34 years old. This shows us that the majority of active traders on Paxful mostly come from the younger generations.
Why the younger generations invest in BTC
The drastic changes in the percentage of each age group above the age of 34 are as good a sign as any that most traders you transact with belong to a younger generation. Being born in the midst of all this technology helps but let’s take a closer look at other factors that might affect these numbers.
As we mentioned earlier, these younger generations are growing up with all these technologies that cryptocurrencies rely on. The Internet, smartphones, and computers were all invented before or around the same time as these generations, meaning that they were exposed at a much earlier age.
This exposure would lead them to be more adaptable to these technological advancements. Unlike those from the “Baby Boomer” generation who have to learn how to use an app before they can do anything profitable.
With the Metaverse becoming increasingly popular, we can expect their numbers to drastically increase. After all, with how current technologies may scare away the older generations, the opposite seemingly holds true.
Distrust in traditional financial institutions
Over the past three decades, the world has seen more than a few financial recessions and general economic difficulties. Even if they weren’t born during the worst of these difficulties, they would have grown up hearing stories from their parents or older siblings.
All this has led to the current generation developing a lack of trust in traditional financial institutions. Where before leaving your money in the bank might have earned you a decent profit, nowadays that isn’t enough. The youth of today understand that they need to be more proactive when it comes to their financial future.
The decentralized nature of cryptocurrencies thus makes sense as a viable option for these younger generations. This way, they avoid regulated, centralized institutions and instead invest in cryptocurrencies that do not benefit just one entity.
Ease of access to crypto
To invest in traditional institutions, people would have to learn how to open a brokerage account, participate in trades, and how all of that connects to gold and silver reserves. Understandably, this scares a lot of potential investors away given that there is so much that can go wrong. The complications involved in merely joining the ranks of traders plays a big part in how the younger generations are choosing cryptocurrencies over traditional stocks.
With that in mind, it makes sense that they would divert their attention to more accessible options. It is more likely that, in the future, individuals with the finances to invest would choose crypto over traditional stocks, if only for the comparative ease
Social media influence
Another thing that helps with the rapid growth of cryptocurrency’s popularity is the multiple social media campaigns that advertise and promote the use of cryptocurrencies. Even tweets from influential individuals have the potential to affect the market price of Bitcoin BTC due to the predicted effect of their posts.
All this is to say that even those who weren’t even planning on investing in crypto would be exposed to all these campaigns. This might even afflict others with FOMO, or the fear of missing out, something that the younger generations are well aware of.
What supports this is a study conducted by CNBC where it is reported that those within the age range of 18-34 years old, the Zoomers and Millennials, are 17% more likely to base their investment decisions on information gathered from social media.
The bottom line is that the younger generations have an advantage over those older than them because of their early exposure to these developing technologies. With less to learn, it’s easy to see why millennials and zoomers are choosing to invest their finances and time in cryptocurrencies.
With this advantage, we will most likely see more and more examples of youth who’ve made their fortune early on thanks to an early investment in cryptocurrencies. It may not be the traditional way to make money off of investments but cryptocurrencies and the blockchain are proving to be viable options for the youth.
*Disclaimer: The content of this article is for informational purposes only. The opinions expressed here are not meant to be taken as financial, investment, or any other advice, nor do they express the opinion of Paxful.