As a financial planner, it’s natural to think about maintaining and growing your business. However, many advisers have shed away from cryptocurrencies and their markets in the past because of the high volatility. Because of this, most financial advisers ask their clients not to invest more than 5% of their portfolio in these markets, citing prudence as the main reason.
However, when we look at various demographics, we find a particular age group that finds crypto very appealing. These are the millennials and Gen X who have had the internet for most, if not all, of their adult lives. Service-on-demand, fact-checking, and price checking are the norm since much of this information is already out there.
In the past decades, price checking became an industry shifting practice. This has categorically shifted the financial advisors’ world. The price checking movement gave birth to robo-advisors. Today, this has become an indispensable part of doing business. Those who have changed with time found big rewards at the end of the journey. But those who refused to change got ousted by machines. The same is happening in the world of finance and cryptocurrencies. While the risk might be a bit more significant than investing in other areas, the returns are also quite substantial and can disrupt the entire industry. Today, robo-advisors have more than $100 billion in assets under their care, where the average age of an investor is less than 40.
Platforms that make it easier to buy and sell crypto assets have also seen a significant rise in users. Platforms such as Robinhood, Stash, and Acorns boast of more than 80% millennial users where the experience is digital-first and is also highly customizable. Unlike older generations, millennials and Gen X know that technology is on their side. That explains why they are interested in better ways to invest, transact, and even save. Due to this, experts believe that cryptocurrencies represent the next big thing in investing.
For instance, millennials and Gen X have a very different way of thinking from the older generation. Numbers from CB Insights show that 83% of this group is open to alternative, unconventional ways of investing, and another 33% is certain they don’t need a bank as well. As of this article’s writing, the age group with the highest number of Bitcoin investors belonged to the 25-34 age group. The average age of those interested in knowing more about crypto today stands at about 42. This is better represented by those at their peak earning years.
Today, what we essentially have in the market are smart investors who have growing incomes. They know what exactly they want to invest in, and are wary of paying fees that shouldn’t apply. This means that these people are willing to invest in cryptocurrency if the person they trust with their money says it’s okay to do so. More than half of the people surveyed by Tech Company Grayscale say that should their financial advisor recommend it, they are more than willing to invest. This means that financial advisors who are willing to delve into the world of cryptocurrencies can then give proper advice to young people who go to them seeking assistance in a highly lucrative investment. Cryptocurrency provides clients with an investment that’s highly liquid and low-minimum entry requirements. These are the main reasons why these two generations are very open to investing. Crypto, such as Bitcoin, Ethereum, and others, have had a brilliant year. Partly fueled by the crises people face worldwide, people have come to recognize these funds as legitimate and uncensorable. This is especially in places experiencing conflicts such as the #EndSARS protests in Nigeria and other nations in the world. Although not all cryptocurrencies are highly liquid and volatile enough to give you a good return, a seasoned financial advisor should be able to give you a clear picture as to which areas are prime for investments and which ones you should stay away from. Given the reasons stated above, cryptocurrency is definitely the next big thing when it comes to financial trends.