• Millennials have a more significant share of their portfolios invested into crypto than xennials and Gen Xers.
• Social influence and stigma plays an important role in investor perceptions and the demand for cryptocurrencies
• 3 out of 4 traders have made a profit from cryptocurrency trading in the current bull market.
• Robinhood’s profit reports show that cryptocurrencies were a trending trading asset in both prior quarters of 2021.

Demand for digital assets is surging as investors redirect their funds towards innovative, yet speculative and immature technologies, such as blockchain. Cryptocurrencies are building credibility from the mass attention being gathered. A study conducted by CryptoVantage reveals unknown data indices regarding generational investing behavior.

On Average, There Was Profit To Be Made

The “Generational Philosophies on Investing in Crypto” survey, conducted by CryptoVantage, included 1,044 participants from the Gen X, xennials, and millennial generations, aiming to uncover market assumptions about their crypto investing preferences.

While some data indices were apparent without study, results indicated that millennial traders had more cryptocurrencies in their portfolios. More specifically, millennials held 12% of their investment portfolios in crypto, while Gen Xers held only 6.3%, and xennials held 9.2%. With Bitcoin reaching its next bull run cycle, data shows that 3 out of 4 traders have made a profit while trading crypto.

Data shows that only 76.2% of millennials made a profit from crypto trading, compared to the 80.5% of xennials. In the research titled “Distrust of speculation?” The author emphasizes that generational differences between investors play a role in influencing trader decisions. Moreover, it displays a generational discrepancy when it comes to choosing tokens, though Bitcoin still remains the preferred currency.

The Role of Influence in Their Crypto Journey

Previous research conducted by Cardify in February, showed that only 16.9% of investors fully understood crypto, and 33% described their level of knowledge as “emerging.” Now, new data shows the same behavioral notes being played, namely that only 30% of investors did extensive research before investing, while the other 70% did little to no research at all.

Cryptocurrency information tends to permeate among close friend circles, with xennials noting that they tended to gather information from social media, “preferring to learn about cryptocurrencies from Facebook, before turning to friends.” Interestingly, 39% of respondents agreed that Elon Musk is a beneficial crypto figure in aiding decision making. The aforementioned data from February shows that 28% of novice investors increased their positions based on Elon Musk’s social media interactions.

On The Flipside

• Investors see Dogecoin as a profitable asset, without considering whether it adds value to the ecosystem.
• Retail investor behaviors are strictly driven by high price speculation.
• There is little data evidence on the amount of allocated cryptocurrency in investor portfolios during bear markets.

Where Will It Go From Here?

Despite data showing a bullish scenario, there are indicators giving a grim outlook. Income Sharks tweeted that retail investors are the ones that bring volatility to the market, however bull runs typically occur when retail interest is high. CryptoVantage’s survey revealed that curiosity was the main determinant for investing in cryptocurrencies, primarily because of the potentially high financial returns.

As John Patrick Lee of VanEck notes, “there’s a huge generational wealth transfer,” and millennials are the only survey responders that invested to “diversify their portfolio.” This adds purpose to Lee’s emphasis that “young people are investing in new ways” as they are more willing, and faster, to adopt new technologies and modern ways of thinking.

What’s noteworthy is that, despite users being heavily vested in crypto, the May 2021 price slump pushed most retail investors out entirely. Adding to this, Robinhood stated that trading volume was decreasing, indicating disinterest from young investors as the pandemic draws to a close. While investments have been beneficial for investors from all backgrounds, the data could be inaccurate as the market sentiment is rapidly changing.

Why You Should Care?

Cryptocurrencies draw investors because of the high financial yield, yet their lack of technological understanding makes crypto trading a largely speculative and impulsive task.