Many Millennials are as aloof from 401ks, Roth IRAs, stocks, and bonds as Baby Boomers were from having had to ride in horse buggies — it mostly didn’t happen, it wasn’t a part of the times. And in the wake of the Great Recession, investing for the future hasn’t been “part of the times” for Millennials, similarly. Yet the growing, internet-driven ease-of-access for the fledgling new asset class of cryptocurrency begs the question: can crypto make financially-savvy savers of the youth?
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Millennials Just Aren’t Saving Right Now
A new analysis from the National Institute on Retirement Security (NIRS) pegs the number of American Millennials who aren’t saving properly for the future at 95 percent. Moreover, the institute determined that “[t]wo-thirds (66.2%) of working Millennials have nothing saved for retirement.”
Those are stark, unprecedented statistics that speak to a zeitgeist dissimilar from what our parents and grandparents experienced.
Or, as the NIRS succinctly put it:
“Additionally, this generation has faced a harsh economic landscape of depressed wages, high unemployment, and major structural changes in the American economy. Millennials will have to save more than earlier generations and their parents to address their unique retirement challenges.”
To that end, verbage like “Roth IRA” and “401k” might as well be from an alien language for many of us born in the 1980s and the early 1990s. What we do have going for us is that we’re incredibly tech-savvy.
And that’s where crypto comes in.
Crypto Aligned with Skillset of Millennials
As the world has gone increasingly digital, Millennials have generally become extremely tech-savvy.
So, for example, while many of us might not have the slightest idea how to actually go about buying physical gold for a long-term investment, we’re uniquely positioned to have the skills and ease-of-access to invest in digital gold as bitcoin is popularly called.
Now, this isn’t to say that cryptocurrency investments are the next best thing since sliced bread and that Millennials should blindly drop all their spare cash into X, Y, and Z projects. Not at all. The space as it stands is incredibly volatile, scams abound, and amateur investors have collectively lost untold sums due to naivety or just plain bad luck.
Rather, what I’m trying to suggest is something more nuanced and neutral: not that Millennials should invest in crypto per se, but rather that Millennials seem uniquely poised to drive mass adoption of cryptocurrencies — both because of the times and because of our dispositions — a dynamic that, in turn, could gradually trend our generation toward being more financially-savvy.
To this end, crypto could prove to be a “gateway drug” for more traditional assets for young adults in the years ahead. We may catch up on our retirement savings after first being awakened to the possibility of taking control of our own financial affairs through crypto.
It’s an idea that Commodities Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo touched upon during the U.S. Senate’s first official hearing on cryptocurrencies.
Giancarlo Says Bitcoin Opened Up His Kids’ Financial Horizons
As a perfect example of the point that I’m trying to get at, Chairman Giancarlo commented during his introductory Senate remarks that owning bitcoin has improved his older children’s financial knowledge in general.
As I wrote in covering Giancarlo’s remarks earlier this year:
“CFTC Chairman Giancarlo started out his comments by asking if he could take a moment to talk from the perspective of being a father. He said that he and his wife have been trying to get their three older teenage children to be interested in the world of finance for years.
Giancarlo opened small brokerage accounts for each of his children, but their interest never caught on.
But the Chairman said a lightbulb flipped in 2017 when his kids got bit by the bitcoin bug. He said their passion for cryptocurrencies exploded, and he’s watched tenderly from the sidelines, fascinated by the potential of the blockchain tech that Millennials are currently adopting in droves.”
It’s this kind of potential that might make crypto-savers of us yet.
What About the Dollar?
Investor types will tell you you’re not participating in the “real economy” if you just cram your spare dollars under your mattress.
But there’s another reason why, if you do want to save, straight cash seems unwise.
Now, it’s not quite clear how much value the U.S. dollar has lost over the last 100 years or so, but as Business Insider columnist Joe Weisenthal noted a years ago, “the purchase power of a dollar has fallen massively since 1959 […] if someone had a bunch of cash in 1959 and literally put it in a shoebox, they’d have lost a lot of money over the last several decades.”
So there can be no denying that cryptocurrencies are extremely volatile at present. And there’s no telling where the cryptoeconomy will go from here.
But there’s also no denying that the U.S. dollar has been tanking in recent decades — thus it may not be the best retirement vessel in its own right.
What’s your take? Have cryptocurrencies made you more financially-savvy and retirement-minded? Sound off in the comments below.
Images via Risk.net, nh-hotels