Idealism, control and financial education: why young people invest in cryptocurrency

Idealism, control and financial education: why young people invest in cryptocurrency


It’s no secret that young people are heavily invested in cryptocurrency; according to a recent study conducted by LendEDU in the States, people under 35 years old are far more likely to be currently invested, or planning to invest in cryptocurrency, than older age groups.


The study was conducted among those looking for student debt solutions, so it could be argued, possibly not an audience that should be speculating on such volatile and risky investments.

It suggests that young people have not only been beguiled by cryptocurrency as a financial investment, but are comfortable in their knowledge of the technology, and their willingness to accept a new mechanism for transactions.

There could be a range of factors as to why younger generations have embraced cryptocurrency with more gusto than older generations, and your judgement will probably be coloured by your overall feeling about the phenomenon.

the younger generation are wiser than older generations when it comes to technological innovation

Crypto-sceptics may claim that younger people are too ill-informed to realize that this is just another  bubble – and there is a strong belief that there is nothing new in markets; bubbleomics. Their financial education may not be strong, but there have never been more sources of support and information.

However, what if it is really is different this time? Proponents may say that in fact the younger generation are wiser than older generations when it comes to technological innovation, just as the internet revolutionaries were to the generations ahead of them?

Or, do they simply have a different set of investment considerations and criteria?


School of Hard Knocks


It is hardly as though young people have been insulated from financial crises; for young people, the phenomenon of economic catastrophe is a fact of life. Centralized banks have collapsed and government control of the economy has caused numerous financial downturns in their lifetime.

Alumni of the School of Financial Hard Knocks will point to the economic recession of the early 1980s, Black Monday, the early 1990s recession, the 1997 Asian financial crisis, the early 2000s recession, the financial crisis beginning in 2007 (the housing market was too big to fail, right?), the 2000s energy crisis, and the 2015 Chinese stock market crash just to name a few.

for young people, the phenomenon of economic catastrophe is a fact of life

In fact young people have never experienced economic stability and have become weary of the current financial system altogether.

Instead of complaining about the system it has inherited, these are the people that are making a conscious decision to drive the world away from dependence on centralized banking.


Understanding the technology


It would be wrong to proclaim that all young cryptocurrency investors are technologically literate; they are not, but cryptocurrency isn’t as complex as it may sound.

There are countless videos to be found online that explain cryptocurrency in very simple terms; try to find a short video explaining the current economic system, and you will be disappointed, so maybe with cryptocurrency comes a sense of ownership and control that young people would not normally associate with the financial sector.



Young people value efficiency, and the current financial system is far from efficient – with the vast number of steps, calculations, risk-warning and disclaimers the current system fails to connect with many young people.

With cryptocurrency and blockchain technology, there is less complexity to the financial system; fraud becomes more difficult, and financial decisions become more transparent (the integration of decentralised autonomous organisations means that these decisions are left to us).

Many young people that have embraced cryptocurrency have a vision of how it will dramatically impact the future; they grew up in the midst of a technological revolution with the rise of the internet, the invention of the smartphone, and the expectation of information and entertainment on demand.

Change is in their DNA; instead of avoiding the switch from centralized banking to cryptocurrency, young people are imagining the infinite ways it can improve their world – a reply to LendEDU said ‘we are the future, this is our chance to own it’.


Nothing to lose


A further sentiment expressed to the survey was the fact that many young people felt that they had ‘nothing to lose’; at first glance that may seem an odd sentiment – if you invest in cryptocurrency, you could stand to lose your entire investment.

Those that struggle to get to grips with the concept of cryptocurrency investing are probably of the ‘I’ve worked too damned hard for it to put my money in harm’s way’ mindset.

many young people felt that they had ‘nothing to lose’

In truth, speculating in cryptocurrency does not sit particularly comfortably with Muckle’s credo which is passionate about long term wealth creation and preservation in pursuit of financial independence.

‘Investments’ that bounce around and could even disappear entirely do not generally sit comfortably with that ambition.

However, when asked to explain and expand on this thought, it became clear that most had only invested between £200 and £1000; one respondent said that he had invested £200 of his birthday money and without touching it, had tripled his money in a matter of weeks.

He said that he understood that, as with any investment, he could potentially lose everything, but that he’d ‘rather lose £200 on a bet against the current system than make 7% a year following the status quo. If this is a chance to get out of the cycle of economic catastrophe, I want in.’

That really does point to a Brave New World, populated by those that believe they have their whole lives ahead of them to make more money, and make it on their terms.

To these young people, this is their chance to gain wealth from their resistance to a failed system; they believe it is better to lose money on something they believe in than on something that has repeatedly failed them, their families and their communities.


As ever, there is no right way, there is no wrong way; there will be a way that is right for you.

Those that subscribe to ‘mony a mickle maks a muckle’ as a blueprint for their long term financial wellbeing, the idea of punting on cryptocurrency may appear complete anathema.

However, for those with FIRE in their bellies and a capacity for loss in pursuit of an ideal, there may be some appeal.

Good financial education is key – understand the risk and opportunities presented by your investment and make informed choices on the road to financial independence.


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