- Despite recent events, millennials are still positive about crypto.
- They compromise their retirement funds to invest in the industry.
- Experts advise them to be careful.
A generation defines a major investment in a sector. With their ability to take risks and their carefree attitude, millennials see great value in crypto, despite everything that has happened in the industry, including major meltdowns and the crypto winter. Moreover, they are even compromising their retirement portfolios to invest big in crypto.
Millennials and Crypto
It’s good to know that millennials understand the importance of crypto. Seeing the industry as something that can bring them huge rewards in the future. But many financial analysts have warned them to be careful with their investments. Implying that, at the moment, crypto is still very unregulated and this bet could have some losses in the future.
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 the millennials who look to cryptocurrencies as the foundation of their retirement plans, I’m really concerned about their future.
Although he is not anti-crypto in itself, it is against massive investments in a high-risk asset. Emphasizing that these assets should only represent a small part of the portfolio and not the entire strategy. Again saying that crypto the assets are unregulated and relatively younger, which significantly increases the risk factor.
Arguing from the situation where governments and their regulations enter the field, he would avoid owning a cryptocurrency in a major way with all this ambiguity. Older financial instruments like traditional stocks and real estate are still considered better long-term options.
Smart Savings Advice founder Matthew Robbs says that when the industry is doing well, investing in crypto is a no-brainer, and it would be strange to drop it altogether. Further adding that:
“Crypto is exciting to invest. If you choose the right coin at the right time, you can get five, ten or 100 times your investment in 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 within four months. Bitcoin then rose to $69,000 before dropping to $17,000 over a seven-month period.
Avoid keeping all the eggs in one basket
As with any financial instrument, it is not advisable to invest heavily in just one thing, or to avoid keeping all 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 some extent.
Imagine investing heavily in an asset and dropping more than 75% in just seven months; this could derail the strategy that the person would rather give up than wait for another run.