According to a new survey by the FX broker eToro, 43% of U.S millennials prefer to invest money in crypto assets as opposed to the stock market. The study also discovered that 71% of millennials are open to investing in digital assets, if they are offered by established financial institutions.
Over half of the online investors surveyed said that they would want a portion of their 401k portfolios allocated to crypto assets.
Guy Hirsch
The Managing Director of eToro U.S., Guy Hirsch explained that:
We’re seeing the beginning of a generational shift in trust from traditional stock exchanges to crypto exchanges. At the heart of this change are the asset classes themselves. Younger investors’ experience with the stock market has seen a great deal of loss of trust, with the fall of Lehman Brothers because of irresponsible practices followed by the worst recession since the Great Depression. Trust further eroded when Americans saw how hundreds of billions of dollars of taxpayers’ money are funneled to the largest financial institutions while their savings evaporated and how banks get free money through quantitative easing while their cost of living continued to rise.
Hirsch added that:
While both crypto enthusiasts and millennials alike seem to distrust monolithic institutions like traditional exchanges and the largest investment banks that play in them, there’s a great deal of demand from younger investors for offerings from firms that are more recognizable, aren’t perceived to be bad actors and have an infrastructure that can provide personalized and tailored advice.
While there is clearly a demand for crypto assets in 401k portfolios, there are a number of regulatory and market changes that need to occur before it becomes a mainstream offering. We would need to see more advisors become educated on crypto assets and getting comfortable recommending their customers to shift into crypto markets from traditional equity markets. Mainstream traction will also be aided by the approval of ETFs that track crypto assets. At that point, we could see crypto offerings in 401k portfolios.
The survey was conducted among 1,000 online investors.
Meanwhile, UK online trading leader IG Group Holdings plc (LON:IGG) announced the launch of IG US, its US-based subsidiary offering foreign exchange (forex) services.