Business Insider even wrote a piece where the headline said Millennials are killing “countless” industries — and then went on to list 19 of them. A few of the biggest are Real Estate, department stores, and the billion-dollar cereal industry.
Well, it may be time to add another industry to the list: the stock market.
Yes, millennials, may be gearing up to kill Wall Street. But why? And how? Let’s go through a list of 5 reasons Wall Street may soon become Broke Street — and how cryptocurrencies may be the reason.
1. Bitcoin’s Strong Returns
Over the years, Bitcoin has returned far more profit than stocks. Even if someone purchased BTC at its all time highs (with the exception of the last one) and the person HODL’ed (Hold On For Dear Life) — that person would be in the green. From 2011 to 2018, BTC has given investors returns as follows:
These are powerful returns over any and all assets, stocks, bonds, derivatives, and currencies.
In fact, according to CryptoManiaks, “A $50 investment in 2009 would have netted you $100 Million at Bitcoin’s peak in 2017.”
Now Bitcoin is flying high again — and its network and adoption have only increased. There are more user-friendly wallets services, applications, and resources that serve Bitcoin. Plus, highly intelligent and very well financed large investors are taking a more serious look at investing in Bitcoin.
2. Bitcoin is becoming a retirement portfolio item.
How can that be? Isn’t Bitcoin a volatile asset? How could it be part of a retirement portfolio? What if it pops when I’m 68 and I’m left with nothing? Well, two things.
- Millennials are still a long, long, loooong way off from retirement. They can take a risk or two. Plus, they’ve lived through the housing crisis — caused by bankers and brokers playing fast and loose with stocks and other “traditional” and “safe” investment classes. Most millennials have seen “safe” investments like houses get foreclosed and stocks sink — so perhaps bitcoin’s volatility and risk is not that different?
- Bitcoin’s price started at near-zero. As a new investment class, it’s only natural for it to show so much fluctuation. It’s called “price discovery” — where the market grows, matures, and discovers the price at which Bitcoin should naturally hover around. This is a natural phenomenon of an emergent digital asset with no predecessor. Once the market spreads throughout the world and achieves global liquidity, security, and regulatory guidance, a more mature bitcoin industry will evolve — with a more stable price. By the time Millennials reach 68 years of age — a mature Bitcoin market is a distinct possibility.
3. Gold is for Grandparents.
Millennials grew up at the dawn of the internet. They’ve been molded by it, shaped and changed by the digital world. Millennials who play World of Warcraft can buy and sell their in-game gold on places like eBay. They pay using Venmo, Paypal and online banking. Money and assets are strongly correlated to the digital world.
Gold seems so … old. If a Millennial’s money is all stored in online banking and they use digital tools to pay for everything from rent to food to transportation — why should they buy hunks of heavy metal and then store them in a safe?
Bitcoin seems far more natural to a Millennial. It’s the currency of the digital world. Besides,1 Bitcoin is worth more than 1 ounce of gold now — and keeps rising. This is a significant shift away from traditional investing logic. Bitcoin’s portability, security, and global nature are increasingly appealing to those Millennials who have a spare amount of money to invest.
Now that the world is facing increasing instability and uncertainty geopolitically — the real test for Bitcoin as a hedge versus gold may begin.
4. It is easier to start crypto trading
Trading stocks is not the most user friendly hobby. Sure there are platforms like Ameritrade and Robinhood to help out — but setting yourself an account and going through the whole process takes time. And for what? 10% a year?
Cryptocurrency trading can often be an easier alternative — especially for Millennials who’ve grown up in the digital world. The concepts come more naturally.
5. “Trading sessions” vs 24/7 operation gives Millennials constant access.
Another important difference which Millennials are capitalizing on is the difference of trading hours between stock and BTC. Traditional exchanges have their own trading sessions. In the U.S., the stock market opens at a certain time and closes at an exact time — and no trading on weekends and national holidays. That’s when all trades must happen.
But crypto trading gives 24 hour access. Therefore, events that occur in real life have an instant impact on prices. So if a Millennial is sitting by his or her PC (which many do), then they can react fast enough and make profits via the news. It may be an exhausting way to live life but the profits might be worth the effort.
Millennials are killing stocks — and birthing a new asset class
From the ashes of the past — a new age always rises. We’ve all seen the aftermath of a hurricane or forest fire. After the devastation — new trees grow, and animals and people return.
Millennials may be killing off industries — but that’s only because those industries failed to adapt. There’s a reason we watch our favorite movies and TV shows on Netflix instead of going to Blockbuster. Why should we force ourselves to drive to a Blockbuster DVD store, spending money on gas and polluting the environment, when we can just stream Netflix?
Why should we buy chunks of shiny metal and store them in larger chunks of dull metal just in case the global economy tanks? Or buy digital shares of companies that may manipulate their accounting books and fire thousands of hardworking people just so their stock can go up 1 cent?
No, Millennials are putting their faith and their trust into a brave new digital world — a world of unbiased mathematics and digital scarcity. And so far, it has paid off for them immensely.