What role will cryptocurrencies play in retirement strategies

Insights from several surveys have shown that Millennials and Generation Z have started to increase their investments in cryptocurrencies. It is believed that cryptocurrencies such as Bitcoin and Ether have started to make their way into the retirement plans of young investors. According to a survey by Capitalize, an Individual Retirement Account (IRA) rollover service, 56% of GenZ individuals and 54% of Millennials talked about including cryptocurrencies or non-fungible tokens (NFTs) in their strategy. pension to earn post-retirement benefits. “As the principle of early retirement has become prevalent, Millennials and GenZs are expected to hoard cryptocurrencies to gain benefits through dividends and price appreciation. Thanks to this plan, young investors will be able to obtain good returns on their investments because they will be able to invest for the long term, and even withstand the effects of falling prices in the event of bear market-oriented developments”, Aliasgar Merchant, Principal relationship developer Akash Network, a decentralized cloud platform, told FE Blockchain.

Experts are of the opinion that Bitcoin has evolved as an asset class to become more than a digital currency, as users can use it not only as a medium of exchange, but also as an alternative for storing value and hedge against inflationary effects. About 27% of Americans, between the ages of 18 and 60, have owned or traded cryptocurrencies over a six-month period, as revealed by research from KuCoin, a cryptocurrency exchange. “The proper way to evaluate digital assets is to look at utility and use cases, which are present in the market today. Since digital assets have undergone improvisations and transformations over the years, they remain susceptible to volatility and fluctuations. However, experts still suggest that one can invest small portions of their net worth in cryptocurrencies. As young people can take their time with such investments, they will be able to bear the associated risks,” said Punit Agarwal, Founder and CEO of KoinX, a cryptocurrency tax startup.

Additionally, reports have indicated that apart from retail investors, wealth management firms have started adding cryptocurrencies to their retirement plans taking into account employee-related factors such as age, disposable income, risk endurance capacity, among others. According to the Congressional Research Service, a public policy research institute, financial services firm Fidelity Investments will allow users to allocate 20% of their retirement savings to Bitcoin-backed investments through their 401(k) retirement plans. , which are employer-sponsored retirement plans to allow eligible employees to contribute. “Cryptocurrencies have the potential to provide protection to users in the event of a country’s bankruptcy or loss of purchasing power of its fiat currency from a global perspective. Investments in Bitcoin and Ethereum can provide stability and are widely used in the market. I think Web3.0-based investors will benefit from it,” said Amanjot Malhotra, Country Manager for India, Bitay, a cryptocurrency exchange.

Also Read: SEC to Respond to Growing Filings by Crypto Issuers

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