1 in 5 Americans Has Crypto in Retirement Portfolio, but Which Generation Is Really Banking on It?

Virtual money and digital crypto currency concept.
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Cryptocurrencies have been making their way into mainstream investing for quite some time, including in retirement plans. Despite the downturn the space has been suffering for the past few months, some investors are still banking on the assets for the long term. But not all generations share the same stance regarding incorporating digital assets in retirement plans.

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A new GOBankingRates survey finds that one in five Americans (21%) say they have crypto in their retirement plans.

This is not surprising to many experts, including to Jagdeep Sidhu, the lead developer and president of Syscoin. Sidhu said it’s important to have a wide variety of assets for your retirement, and he also said it’s clear that, even with the current market conditions, digital assets are here to stay.  

“They’re also growing at an astronomical pace. Digital asset networks represent a huge investment opportunity for many people, especially for those who are not poised to retire for decades from now,” Sidhu said, adding that the risk and the reward in the eyes of young investors is just too great not to take up with this asset class.

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Risks include extreme volatility, of course; but, for those who can wait, there are also rewards. A decade from now, blockchain ecosystems will serve as major engines for the global economy, Sidhu said.

“So, generations that grew up within the internet world are naturally intrigued by the forthcoming infrastructure of new internet economies,” Sidhu said.

Gen Z and Millennials Believe in Crypto

Indeed, Gen Z and millennials take the lion’s shares in terms of generations most inclined to include crypto in their retirement plans.

The GOBankingRates survey found that 29% of the 25-34 age group and 28% of the 18-24 age group have crypto in their retirement portfolios.

Ric Edelman, a former independent financial advisor and founder of the Digital Assets Council of Financial Professionals (DACFP), said he’s not surprised by these findings for several reasons.

First, younger people are more tech savvy and thus are more likely to be early adopters, he said. Older people already have most of their money invested and are less likely to be seeking new investment ideas, he added, and they are more likely to rely on the advice of financial advisors — and few advisors recommend crypto.

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“Older people use tech, but younger people are tech,” Edelman said, “And so, rather than being surprised that more younger people buy crypto than older people, you should be surprised that there are any older people buying tech.”

Older Generations Have Less Crypto

The survey indeed finds that the older the age group, the less they have invested in crypto. That translates into 23% of the 35- to 44-year-olds and 20% of the 45- to 54-year-old group. The percentages drop significantly for Americans over 55: Just 8% of the 55-64 age group and a meager 7% of the 65-and-over group say they have crypto in their retirement portfolios.

“Look, older investors aren’t necessarily shying away from allocating their investments towards digital assets,” said Jacob Sansbury, co-founder and CEO of Pluto. “We certainly see strong evidence of rising interest among older generations in getting exposure to Bitcoin, Ethereum and other important digital assets.”

Sansbury added that, while there is an increasing institutional interest in crypto, digital assets just make more sense to generations of younger people who have grown up knowing nothing other than the internet.

“In short, digital assets represent the economy of the internet,” he said. “So, it makes perfect sense that the internet-savvy generations will look to invest in the economic infrastructure of the internet, which, broadly speaking, is a digital asset ecosystem.”

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Younger People Have More Time

Another factor is that the time horizons for younger investors are longer, so they have more time to handle the volatility of the digital asset ecosystem.

“Since many blockchains are poised for long-term growth, by the time these young people retire, these ecosystems will likely be much bigger and more valuable than they are now,” he said. “And that will be beneficial for funding their retirement.”

Finally, another finding of the survey is the gender gap. Indeed, 30% of men say they have crypto in their retirement plans, compared to only 12% of women.

“I think we are seeing this disparity between men and women investing in digital assets changing, with more women looking to get exposure to this emerging asset class in recent years,” said Santiago Portela, CEO of FITCHIN. “That said, some studies have shown that women have historically been relatively more risk averse when it comes to investing. And, of course, we all know a prominent feature of an emerging technology like digital assets is the volatility. This can be very off-putting.”

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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