Nearly half of millennial online traders have more trust in
cryptocurrencies and crypto-assets than the US stock market, according to a new
survey from eToro, an investment platform. Even among millennials who do not
trade crypto, one-third said they would trust crypto over the stock market,
indicating the beginning of a generational shift in trust, according to Guy
Hirsch, managing director of eToro US.
“At the heart of this change are the asset classes
themselves,” Hirsch said.
“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
As more investors become educated on blockchain and crypto,
we will continue this trend play out, Hirsch predicts.
The US-focused online survey, conducted by Provoke Insights,
also found that investors across all age groups including millennials are
enthusiastic about the prospect of traditional financial institutions offering
crypto assets, showcasing rising demand for institutional crypto offerings.
Among investors across all age groups that do not trade crypto,
59% said they would invest in crypto if it were offered by a traditional
financial institution. Meanwhile, 92% of current crypto traders would invest
more money if a conventional financial institution provided this investing
Another key finding of the survey is the growing demand for
alternative crypto products with half of investors surveyed expressed interest
in a crypto allocation in their 401k plans.
Though demand for crypto-assets in 401k portfolios is
clearly on the rise, a number of regulatory and market changes must occur before
this becomes a mainstream offering, 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,” he said. “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.”
Other popular alternative crypto products cited by
respondents include crypto loans, with 76% of online investors expressing
keenness in gaining interest on crypto assets, and 47% interested in taking out
a loan in crypto. As for crypto traders, 96% said they would like to gain
interest on crypto assets and three quarters said they would take out a loan in
The eToro survey results echo a study published
in December 2018 by Cambridge Centre for Alternative Finance which found that
despite the severe bear market, the number of verified users of
cryptocurrencies almost doubled in the first three quarters of 2018, showcasing
rapid adoption of cryptocurrencies.
According to the report, total user accounts at service
providers now exceed 139 million with at least 35 million identity-verified
users, the latter growing nearly 4X in 2017.