Cryptocurrency has gained a lot of popularity among Gen Z investors who believe they can become millionaires by putting their resources into these lucrative assets. According to a recent report, nearly 40% of millennials own crypto. Moreover, Gen Z investors aged 25 to 40 want to include cryptocurrencies in their retirement portfolio. When it comes to the financial aspect, there is a strong gap between the past generation and millennials. While in the past, people focused more on building wealth, nowadays, young people want to create a lifestyle they enjoy and find a purpose that brings them fulfillment. The only way to afford a house for the older generation was to start saving as early as possible. But millennials have now found a solution that seems promising: to invest in assets like crypto.
Crypto is part of millennials’ retirement strategy
Currently, there is so much uncertainty regarding the economy, making it hard to plan for the future. But that doesn’t stop millennials from dreaming big. Despite the uncertainty, GenZ remains optimistic, hoping to retire earlier than the older generation. They see digital currencies as an appealing investment alternative, and it’s all due to their potential to bring significant returns. The world nowadays looks much different than it once was. It’s a digital era, and many young people’s decisions are now influenced by what they read on the Internet and social media platforms. So, it’s no wonder they have a significant level of comfort and acceptance regarding cryptocurrencies. Technology’s evolution is shaping the modern world in ways no one would ever think possible. Who would have ever imagined that there would come a time when one could own digital money and perform transactions without the help of a middleman? And yet, here we are, living in times when millennials are hooked on cryptocurrencies. Millennials find crypto appealing because they believe it can help them achieve financial freedom, which is something they strongly value. They want to be able to make their own financial decisions without having to rely on someone. Meticulous financial planning is not a thing for GenZ; most young people would rather spend their money on things like food, travel, and life experiences rather than paying for a home loan.
Millennials are including NFTs and cryptocurrency in their retirement strategy, and this is because they can take on more risks since they have a long time to wait until they retire. They can get back on the right track if something goes wrong without significantly impacting their future. But as millennials take advantage of these new investment alternatives, how they approach crypto plays a significant role in whether they make gains or lose their money. Cryptocurrencies are volatile, and it’s critical to develop a sense of how this industry works before you start investing. Thus, you should explore blockchain technology, as it may pose challenges if you don’t have a coding background or knowledge of computer science. Plus, you should take time to understand the different currencies in the market like Ethereum and Bitcoin, and figure out their pros, cons and performance. Last but not least, it’s paramount to learn about the different cryptocurrency platforms, such as Binance. The cryptocurrency industry is complex, and it’s vital to get a feel of it instead of jumping all in without even understanding some concepts.
It’s not smart to invest in crypto unless you come up with a strategy
There’s a reason why you keep hearing that it’s best to buy low and sell high. It’s a golden rule when investing in crypto and something that can help you manage risks and prevent losses that could take a toll on your mental health. While crypto comes with many opportunities, it’s essential to be aware of the risks it involves and make logical decisions when investing without letting your emotions take control. Unfortunately, this is often not the case. Many investors succumb to FOMO, which is difficult to avoid when so many people seem to make money without much effort. But FOMO is the enemy that stands in the way of successful investments. But is there a way to not let fear take over and remain focused on your goals?
FOMO is mainly a cause of the hype around cryptocurrency, which is fueled by social media. However, the information on these platforms isn’t reliable, and this hype is often limited by influencers’ imagination, especially when they lack knowledge about cryptocurrency. The reality of cryptocurrency is different from how social media portrays it – many traders lose money simply because they don’t follow trustworthy resources and make quick decisions based on impulse. To become a successful investor, it’s paramount to rely on credible resources, such as financial advisors. So, one of the best pieces of advice on crypto trading is never to base your investment decisions on what you read on social media. But there are other rules you should follow to increase your chances of success. That said, here’s how to invest in crypto successfully:
- Evaluate your coin’s pros and cons. This one is obvious, but you can’t invest in something you don’t understand. Suppose you buy stocks. In this case, you must read the prospectus and evaluate the companies. It’s the same for cryptocurrencies. There are thousands of them, each with different features, so it’s paramount to understand your coin before you start investing.
- Manage your risk. This is critical when it comes to volatile assets like cryptocurrency. You need to develop a risk management plan to help you mitigate losses. For instance, you should consider keeping some money in reserve – after all, you can’t trade without money, so it’s best to build this fund to ensure you’ll be able to trade whenever an opportunity appears.
- Never invest more than you can afford to lose. Before investing in crypto, consider whether you afford to lose the money. If not, maybe it’s not a good idea to start trading. You don’t want to spend all your money on crypto only to realize that you need it for critical situations like a down payment for a house.
- Build a balanced portfolio. What’s also important in your investment strategy is to diversify your portfolio. Crypto trading is still relatively new, and there’s a lot of uncertainty around it. But there is a way to steer clear from the volatility, and that’s by building a balanced portfolio that involves several cryptocurrencies like Ethereum and Bitcoin. This can go a long way in determining the success of your investments.
Last words
Millennials have a different relationship with money than the older generation. They see it as a resource to provide freedom and help them create the lifestyle they dream of. Hence, they see crypto as an opportunity to achieve their financial goals and are positive about how it can impact their future, even amid uncertain economic times. However, millennials must base their decisions on logical facts and follow some rules for their investment strategies to be successful.