Almost half of millennial online traders have more trust in crypto exchanges than the U.S. stock market, according to a survey from global investment platform eToro U.S. The nationwide survey of 1,000 online traders found 43 percent of millennial online traders trust crypto exchanges more than the U.S. stock exchanges. Conversely, 77 percent of Gen X respondents trust stock exchanges more.
Guy Hirsch, managing director of eToro U.S. said, “We’re seeing the beginning of a generational shift in trust from traditional stock exchanges to crypto exchanges. At the heart of this change are the asset classes themselves. Younger investors’ experience with the stock market has seen a great deal of loss of trust, with the fall of Lehman Brothers because of irresponsible practices followed by the worst recession since the Great Depression.
“Trust further eroded when Americans saw how hundreds of billions of dollars of taxpayers money are funneled to the largest financial institutions while their savings evaporated and how banks get free money through quantitative easing while their cost of living continued to rise. Immutability is native to blockchains and that makes real-time audit to be sensible and cost-effective and that is why millennials and Gen X perceive crypto exchanges as less likely to be subject to manipulation and less likely to be a place where bad actors get rewarded with taxpayer money. As more investors become educated on the benefits of blockchain we’ll continue to see this trend play out.”
Two-thirds of millennial crypto traders say they have more faith in crypto than the stock market. Even among millennials that don’t trade crypto, one-third said they would trust crypto over the stock market.
Millennials are still enthusiastic about the prospect of traditional financial institutions offering crypto assets. Ninety-three percent of millennial crypto traders surveyed said that they would invest more money in crypto if it were offered by traditional financial institutions such as TD Ameritrade, Fidelity, or Charles Schwab. Even among millennials that don’t trade crypto, 71 percent said that they would if offered by a traditional institution.
Hirsch continued: “While both crypto enthusiasts and millennials alike seem to distrust monolithic institutions like traditional exchanges and the largest investment banks that play in them, there’s a great deal of demand from younger investors for offerings from firms that are more recognizable, aren’t perceived to be bad actors and have an infrastructure that can provide personalized and tailored advice,” Mr. Hirsch added.
Among investors across all age groups that don’t trade crypto, 59 percent of respondents said they would invest more money in crypto if it were offered by a traditional financial institution. Meanwhile, current crypto traders would be more at ease investing in the asset class if it were offered by a traditional financial institution — 92 percent would invest more money if a conventional financial institution provided this investing option.
Half of online investors surveyed expressed interest in a crypto allocation in their 401k plans. Even among those that don’t trade crypto, 45 percent expressed interest in having some of their 401k allocated to crypto assets, while 74 percent of crypto traders are interested in seeing the option from their 401k provider.
“While there is clearly a demand for crypto assets in 401k portfolios, there are a number of regulatory and market changes that need to occur before it becomes a mainstream offering,” Mr. Hirsch said. “We would need to see more advisors become educated on crypto assets and getting comfortable recommending their customers to shift into crypto markets from traditional equity markets. Mainstream traction will also be aided by the approval of ETFs that track crypto assets. At that point, we could see crypto offerings in 401k portfolios.”
Gaining interest on crypto assets and taking out crypto loans were also popular financial products among online investors. Seventy-six percent of online investors would like to gain interest on crypto assets, while 47 percent would take out a loan in crypto. Crypto traders were particularly enthusiastic about these potential offerings — 96 percent would like to gain interest on crypto assets, and three quarters would take out a loan in crypto.
