Fifty percent of young people in Spain, aged between 20 and 29, are involved in the world of cryptocurrencies. This high degree of participation in cryptocurrencies has also made them the age group most susceptible to deception and loss of value in their investments. One of the key reasons behind this group’s investment mindset could be their growing skepticism toward traditional financial institutions.
Half of young people in Spain between the ages of 20 and 29 are involved in the world of cryptocurrencies.
This figure is raising concern in some commentators due to the associated risk, in stark contrast to the 17% of millennials and the modest 6% of those over 40 who venture into this field. Cryptocurrencies have captured the hearts of the younger generation and become their preferred investment asset.
Young People Take the Lead in Cryptocurrency Investments
According to the collaborative report between the IE Foundation and the Mutual Lawyers Foundation, whose title is The finances of Spanish digital natives and millennials, half of people aged 20 to 29 already have cryptocurrencies in their investment portfolios. This is a significant difference compared to millennials, who only allocate 17% of their investments to cryptocurrencies, and people over 40 years of age, with 6%.
Specifically, those Spaniards in their twenties invest practically three times as much in cryptocurrencies as their counterparts aged 30-39.
Young People Have Greater Investment in Cryptocurrencies, but Also More Risks of Scams
This high degree of participation in cryptocurrencies has also made them the age group most susceptible to deception and loss of value in their investments. Experts emphasize that, due to their high volatility and the proliferation of frauds, cryptocurrencies are not always suitable as assets to store household savings.
“It is essential to remember that the crypto universe goes beyond Bitcoin and Ethereum, with more than 20,000 different cryptocurrencies, compared to the 180 legal tender currencies such as the euro or the dollar,” notes IE.
The report also highlights concerns around how financial institutions and banks have simplified access to cryptocurrencies through products such as cryptocurrency ETFs, with a short-term vision aimed at attracting young people as future customers.
Young people naturally take greater risks in their investments, especially in stocks, where 36% have investments, and in bonds, with a respectable 14% participation, which is the highest percentage in fixed income compared to other age groups.
In contrast, young people show less participation in conservative or retirement investment products. Only 32% of twenty-somethings have investment funds in their portfolio, while millennials and people over 40 tend to focus more on pension funds and savings and life insurance.
Spain is classified by the World Economic Forum as one of the European Union countries with the lowest levels of crypto investment, with cryptocurrencies being “unpopular” within its borders. Indeed, national investment in traditional assets is more than triple that of investment in cryptocurrencies.
Youth and Cryptocurrencies, a Complicated Relationship
Young people face a pension system that appears increasingly challenging and less reliable. This has led many millennials to question the effectiveness of traditional investment strategies and look for alternatives, such as private pension funds and savings and life insurance, as a way to secure their financial future.
The trend is neither new nor unique in Spain; a BBC Business Daily study revealed that in the UK many of the investors under 35 years of age tend to seek high-risk assets.
By Audy Castaneda
