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- Despite the recent events, millennials are still positive about crypto.
- They are compromising their retirement funds to invest in the industry.
- Experts advise them to be cautious.
A generation defines major investment in a sector. With their risk-taking ability and carefree attitude, millennials see great value in crypto, despite everything that happened in the industry, including major collapses and crypto winter. Moreover, they are even compromising their retirement portfolios to invest big in crypto.
Millennials and Crypto
It is good to know that millennials understand the importance of crypto. Looking at the industry as something that can bring them considerable rewards in the future. But many financial analysts have warned them to be cautious with their investments. Implying that, at the moment, crypto is still highly unregulated, and this gamble may have losses ahead.
Views on the matter
In an interview, Clark Hodges, co-owner of Hodges Capital Management, says:
“No, no, no. As I sit here and contemplate millennials considering cryptocurrencies as the base for their retirement plans, it really does concern me for their futures.”
Although he is not anti-crypto per se, he is against heavy investment in a high-risk asset. Emphasizing that such assets should be a small part of the portfolio and not the whole strategy. Again saying that crypto assets are unregulated and relatively younger, thus greatly increasing the risk factor.
Arguing about the situation when governments and their regulations enter the field, he would avoid owning a cryptocurrency in a major way with all this ambiguity. Old financial instruments like traditional stocks and real estate are still considered better options in the long run.
The founder of Smart Saving Advice, Matthew Robbs, says that when the industry is doing well, it is obvious to invest in crypto, and it would be odd to give up on it completely. Further adding that:
“Crypto is exciting to invest in. If you pick the right coin at the right time, you can get five, ten, or 100 times your investment in a matter of a few months or years… In the last two years, Bitcoin went from $10,000 to $55,000 in five months, then $55,000 to $33,000 in the next four months. Bitcoin then went up to $69,000 before plummeting to $17,000 over a seven-month period.”
Avoid keeping All eggs in one basket
As with every financial instrument, investing heavily in one thing is not advisable, or avoiding keeping all the eggs in one basket. Diversifying the portfolio and investing small amounts over time can be profitable. A risk factor in such a strategy is avoided to a certain extent.
Imagine investing heavily into an asset and dropping by more than 75% in just seven months; this could derail the strategy the person would rather quit than wait for another run-up.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
