Generation Z is young, ambitious, and financially savvy. This is especially true when it comes to cryptocurrency.
Cryptocurrency represents a valuable investment opportunity for Gen Zers. It also aligns with the financial interests of Gen Z.
Are Gen Zers Interested in Crypto?
In one survey, 59% of Gen Zers said they can use crypto investments to become wealthy. The survey also revealed that if offered $2,000 to invest, Gen Zers were three times more likely to buy digital assets compared to baby boomers. They were twice as likely to consider virtual currency a “legit currency” than members of other generational groups, too.
There are several reasons why Gen Zers are frequently interested in crypto. These include:
1. Gen Zers Are Prone to Prioritization Spending.
Prioritization spending represents one of the most common financial habits associated with Gen Z. It involves assessing and prioritizing spending needs and using this information to build a budget. That way, prioritization spending helps Gen Zers manage their finances.
Gen Zers can leverage prioritization spending to avoid high-interest debt. This helps Gen Zers obtain sufficient funding they can use to capitalize on a crypto market worth more than $3 trillion.
2. Gen Zers Prioritize Financial Independence.
Research indicates approximately 33% of Americans are financially independent. These individuals have enough money to cover their own living expenses without having to work.
Meanwhile, Gen Zers prioritize independence across school, work, and life. Gen Zers often enjoy taking control of their financial future. Because, with careful planning, Gen Zers can eventually establish and maintain financial independence.
For many Gen Zers, crypto trading has become an integral part of the financial independence, retire early (FIRE) movement. Gen Zers should invest 1-5% annually in crypto annually to build their retirement fund. If the crypto market continues to improve, Gen Zers can earn money they can use to retire early. Plus, they can accumulate funds that can help them become financially independent.
3. Gen Zers Want Financial Security.
Whereas budgeting and financial planning are critical for all generations, Gen Zers generally take these endeavors to the next level. In fact, Gen Zers may be more likely than members of other generational groups to establish and maintain concrete long-term financial goals. With these goals in place, Gen Zers can implement specific short- and long-term measures for saving money.
Crypto provides a viable savings option for Gen Zers. For instance, Gen Zers can set up crypto savings accounts to accept and hold deposits and earn interest on them. These accounts enable Gen Zers to keep their crypto safe. In addition, they allow Gen Zers to accumulate passive income.
Should Gen Z Invest in Crypto?
Crypto represents the “future of finance” for Gen Z. Key reasons why Gen Zers invest in crypto include:
1. Crypto Is Affordable and Easy to Obtain.
Gen Zers can start small with crypto. Many affordable cryptocurrencies are available, such as:
- Cardano: Blockchain platform built on Ouroboros, a consensus protocol that can validate transactions with minimal energy costs
- Dogecoin: Created as a satirical take on Bitcoin; this crypto has garnered attention following tweets and message board posts from business magnate Elon Musk
- XRP: Open-source crypto developed by enterprise blockchain company Ripple
It does not take long to purchase crypto, either. Gen Zers can install cryptocurrency apps on their mobile devices and start buying and selling crypto right away. And they can track various crypto exchanges via these mobile apps to track the status of their investments.
2. Crypto Is Decentralized.
Gen Zers can take solace in the fact that cryptocurrency is not tied to a financial institution or political organization. This gives investors full control over the crypto market.
Furthermore, since crypto is decentralized, it is unaffected by financial policies or recessions. The crypto market even thrived amid the coronavirus (COVID-19) pandemic.
3. Crypto Offers High Growth Potential.
Gen Zers may be drawn to crypto due to its high potential for growth relative to other investment options. Some of the top crypto performers over the past five years include:
- Bitcoin: Approximately 11,400% price increase
- Solana: Over 26,500 price increase
- Ethereum: Over 42,000% price increase
Do not expect the crypto market to slow down any time soon. Research indicates the crypto market could expand at a compound annual growth rate of 12.8% between 2021 and 2030. As such, this market could be worth $4.94 billion by 2030.
There is a lot to like about crypto. Regardless, Gen Zers must plan accordingly. If Gen Zers weigh the pros and cons of crypto and other investment options, they can determine how to allocate their money. From here, those who buy crypto can manage their investments properly.
How to Invest in Cryptocurrencies
Gen Zers can get started with cryptocurrencies today. Here are five tips to help Gen Zers invest in crypto and get the most value out of it.
1. Conduct Research
Learn as much as possible about different cryptocurrencies. Free courses are available that enable Gen Zers to get insights into cryptocurrency, how it works, and myriad crypto investment options. Moreover, Gen Zers can join online seminars and workshops to receive crypto insights.
Along with learning about crypto, get information about crypto exchanges. There is no shortage of crypto exchanges, and each has its respective terms and conditions. Learn about these exchanges and how to use them. Next, Gen Zers can decide which exchanges can provide secure, seamless, and economical access to the cryptos they want.
2. Develop a Crypto Investment Strategy
Resist the urge to go all-in on crypto. Rather, craft a crypto investment strategy with clear-cut goals. This strategy can help Gen Zers to avoid getting caught up in FOMO (fear of missing out) if a crypto suddenly stirs up lots of interest via social media. It can also ensure Gen Zers can minimize the risk of financial losses, as these individuals can spread out their investments across several cryptocurrencies.
SMART goals can be difference-makers in a crypto investment strategy. These goals are specific, measurable, achievable, relevant, and time-bound. To create SMART goals, Gen Zers must consider what they want to accomplish with crypto in the short and long term. Then, they can establish goals and track their progress. And if Gen Zers fall short of certain goals, they can tweak them accordingly.
3. Automate Crypto Purchases
Set up recurring buys on crypto. This lets Gen Zers add to their crypto portfolios regularly. Gen Zers can establish recurring buys designed to automatically purchase crypto once it hits a predefined price. This ensures Gen Zers can buy crypto at a price that meets their expectations.
In addition to automating crypto purchases, it can be beneficial to leverage trading bots. A crypto trading bot performs data analysis and provides insights. It can also provide risk predictions for crypto. A bot can strategically buy or sell crypto assets on an investor’s behalf as well.
4. Grow a Crypto Investment Portfolio Gradually
Maintain crypto as part of a larger investment strategy. Initially, crypto can be used as a small part of a Gen Z investment plan. As Gen Zers get more comfortable with crypto, they can increase their investments in it.
Of course, Gen Zers should try not to get discouraged if their crypto investments fail to deliver immediate results. Crypto prices constantly fluctuate. However, Gen Zers who continue to grow their investment portfolios over many years may be able to capitalize on a crypto market that looks poised to expand.
5. Remain Patient and Persistent
Be ready to HODL (hold on for dear life) with crypto. The crypto market can experience ebbs and flows. Yet Gen Zers who maintain a consistent approach can avoid letting these ups and downs impact their investment decisions.
Track the crypto market, too. Keep an eye on crypto market news and updates. As new cryptos become available, learn about them. This ensures Gen Zers are well-equipped to get in on the ground floor on new crypto investment opportunities.
The Bottom Line on Gen Z and Crypto
Gen Zers have shown a willingness to invest in crypto. But a crypto investment offers no guarantees. Conversely, Gen Zers who plan ahead for crypto investments can boost the likelihood of long-lasting success. These individuals can identify crypto investment opportunities and capitalize on them. As a result, they may be able to maximize the value of crypto long into the future.
