Cryptocurrency has become a highly popular investment option, with approximately 24% of investors owning some form of cryptocurrency. This places it ahead of other investment products such as bonds and index funds, according to a recent investing study by The Motley Fool.
However, not all age groups view cryptocurrency in the same light. Let’s take a closer look at which generation is most likely to invest in crypto and how to determine if it’s the right investment for you.
Millennials are the generation most likely to invest in cryptocurrency, with 43% of them owning some form of it. This is significantly higher than Gen Z (22%), Gen X (23%), and baby boomers (8%). This aligns with the fact that cryptocurrency is a relatively new investment option, making it more appealing to younger generations.
Investing in cryptocurrency can be a rollercoaster ride, as these assets are extremely volatile. Some cryptocurrencies have even failed entirely, and there have been instances of crypto exchanges going under. This makes it a high-risk investment, with the potential for high rewards as well. However, it should not be the only investment in your portfolio or make up a large portion of it.
If you do decide to invest in crypto, it’s important to follow some smart rules to protect yourself. These include not putting more than 5% of your portfolio into cryptocurrency, keeping the majority of your investments in safer options like stocks, and only investing money that you can afford to lose. It’s also recommended to plan on holding onto your investment for at least five to 10 years, as the cryptocurrency market goes through cycles of highs and lows.
With the recent approval of Bitcoin ETFs by the SEC, it’s now easier than ever to invest in crypto. If your current brokerage account offers cryptocurrency or Bitcoin ETFs, this may be the most convenient option. Alternatively, you can open an account with a crypto trading platform and choose which cryptocurrencies you want to invest in. However, it’s important to remember not to put too much of your money into crypto and to have a diverse portfolio.
In conclusion, while millennials are the generation most likely to invest in crypto, it’s important to carefully consider your own risk tolerance and financial goals before deciding if it’s the right investment for you. With proper research and risk management, cryptocurrency can be a viable investment option.
