Since cryptocurrency and blockchain technology is relatively new, it is not a surprise that the younger generation is leading this surge of change. Cryptocurrency is the only financial asset whose ownership and participation are greater among younger adults than older generations. 15% of 18-34 year-olds own cryptocurrencies compared to 11% of 35-64 year-olds and 4% of those over 64 years old. Crypto advocates and enthusiasts believe that cryptocurrency has the potential to replace fiat currencies and revolutionize several businesses and industries. Cryptocurrency is an exciting new investment, with its prices witnessing a boom in the past couple of months. The price of bitcoin went as high as $60,000 in April this year, attracting thousands of new investors. However, with their attachment and faith in the traditional banking system, the older generation has been a little skeptical to hop on the crypto wagon. The scenario is changing, especially during the pandemic when the value of several fiat currencies has gone down, and people are looking for new ways to diversify their investments. For example, India’s largest crypto exchange WazirX saw a 337% rise in sign-ups by people above 45 between February and April 2021. This reflects the emerging interests of boomers in this new technology.
A recent survey suggested that the most compelling reason for investment in cryptocurrencies is its potential for a long-term return. Other factors included accessibility, ease, fear of missing out, and the decentralized nature of cryptocurrency. Although respondents confessed that their biggest hurdle to investing in the crypto market is its volatility, they said they are interested in investing given the high returns. The major hindrance to investing in the crypto market for older investors was the lack of knowledge – they didn’t know how and where to start. Most of these people also did not have any trust in cryptocurrencies. But it is important to note that cryptocurrencies offer a lucrative retirement strategy, especially if you are self-employed and not covered under the 401(k) schemes. Even though crypto investment comes with its own risks, it is more like “calculated gambling” – there’s always a chance to lose, but you’ll beat the conventional finance system if you win.
Retirement Plans
According to the PwC Retirement in America Report, the median retirement savings for people between 45 and 55 is $82,600, while for those between 55 and 64, it is $120,000. This means that they might be able to save $1000 per month of actual cash when they are in retirement. But that’s not enough at all. With Bitcoin soaring by 120% till Mid-April this year, the adoption of cryptocurrency can change the entire financial situation of a person. Recently, ForUsAll Inc., a 401(k) provider, announced that it would allow its retirement savers to invest in cryptocurrency. It caps the investment portfolio up to 5% due to the risks associated with the digital currency. It will let its workers invest 5% through the cryptocurrency exchange platform Coinbase. Such mainstream cryptocurrency adoption for retirement plans will also allow cryptocurrency and blockchain technology to expand its base and market. Cryptocurrency offers greater individualization and control over one’s menu than just choosing a retirement plan from the standard 401(k). For the 401(k) provider ForUsAll, this step is a move towards greater financial equality and equity as not all investors have equal access to investment opportunities. By incorporating cryptocurrency, these retirement savers can look to increase their savings by entering the crypto market.
In the past two years, there have been considerable changes in the crypto investment market. Take the case of Australia, where now every fourth investor is over the age of 44. In the last financial year, the crypto exchange platform BTC Markets witnessed a growth of 15% in the number of investors over 60 years old. Investors over 60 are looking for investment alternatives like cryptocurrencies. Baby Boomers have accumulated wealth and years of investing experience in financial markets – now they are at a time when they have to decide their investment strategy for retirement. Following Australia’s trend, the crypto market in the U.S also seems to attract the interest of people from older generations.
Why Invest?
With their powerful distributed ledger, Blockchain technologies can change the working of several businesses and industries, including finance, healthcare, banking, and supply chain. Due to its decentralized nature, it does not depend on the Central Banking System, and therefore, its value will not be affected by financial and economic instabilities, i.e., inflation. Bitcoin has been called digital gold due to its deflationary and censorship-resistant qualities. People worried about bank failures (we all recall the 2008 Economic Crisis), hyperinflationary events can trust cryptocurrency due to its long-term value.
With the growing adoption of cryptocurrencies for several services, these digital currencies will gain value over time. The value of Bitcoin, especially, is expected to increase as there are a finite number of bitcoins and some people believe that bitcoin will be the first truly global currency. For the older generation, it might be a good way to build their retirement plan. However, before investing, you must diversify your investment portfolio rather than investing in one type of coin. This is why it’s a good idea for the 401(k) providers to limit investment in cryptocurrencies, as it will act as a safety net since the cryptocurrency market is highly volatile.
At Unbanked, we believe in the power of cryptocurrency in promoting financial access and equality. We provide transformative services and products that can change the way you think about your investment plans. We offer crypto bank accounts, crypto debit cards, the removal of hidden fees when you buy, sell, and send crypto, as well as rewards when you spend your cryptocurrency. We can help you enter the crypto market and grow as a crypto investor. To know about our services, visit us today!
