Thirteen-year-old Noah, who lives in Birmingham, Alabama, read about Dogecoin and decided to invest $20 of his hard-earned cash into the currency. His investment quickly doubled, but then Elon Musk dissed the currency and its value plummeted.
The story here isn't that Noah lost his money. It's that a middle-schooler in Alabama would invest in cryptocurrency, which is essentially digital currency used to buy and sell goods. But apparently, it's not as unusual as it sounds.
Derek Waltchack, a cryptocurrency subject matter expert, wasn't surprised to hear about young Noah's investment. Neither were Brian Krogsgard, Tom Scott, and Jmo, all cryptocurrency professionals who agreed young people's affinity for digital currency makes perfect sense for many reasons.
Young People Embrace Technology
“Because these kids grew up with technology, they aren't skeptical of it all," says Waltchack “They have long-term confidence in the power of technology."
Brian Krogsgard, co-founder and CMO of Flip, a cryptocurrency market intelligence firm, agrees. “Younger generations are always the first ones to be interested in new technology," he says. “They see crypto as an innovative take on the financial system with lots of promise, and they are excited about the technology."
Jmo, chief technology officer for cryptocurrency mining company BitBros, adds, “young people are very interested in the tech behind crypto and pushing the boundaries of tech."
The Digital World Is Their Reality
“There really is no distinction between the digital world and the real world for younger people," explains Waltchack. “Older generations see the internet as a tool — something they use to get things done. But for younger generations, the digital world is their world."
Tom Scott, owner of IT firm TS3 Technologies and cryptocurrency investor, also attributes social media — the epicenter of many young people's lives — to giving crypto a boost.
“The buzz of crypto is huge in social media where so many young people spend their time and get their information," Scott explains.
Jmo agrees that many young people are attracted to the hype around crypto. "Social media makes it easy for young people to consume new, reliable information faster, which sparks their interest in innovative, new ideas."
Young People Understand Digital Economies
“Young people have been participating in digital economies most of their lives through video games," points out Waltcheck. "That's where they've used digital currency to buy all kinds of things. To them, it absolutely has value."
But mention bitcoin to a Baby Boomer and they'll roll their eyes, he adds, citing that older generations tend to want more tangible assets. “They need to be confident and comfortable in their ownership of their investments," he explains.
Ask a 20-year-old if they want a bar of gold or the bitcoin equivalent of a bar of gold, suggests Krogsgard. “They'll take the bitcoin because they know what to do with it," he says. "They believe in its value and they actually trust tech more."
They Believe They Can Make Money — and Affect Change
Young people believe they can make money in crypto, says Waltchack, “but they also see it as their way of having something." He explained their attraction to cryptocurrency isn't so much about risk, returns, or having more time to build their nest egg; it's about creating something new.
“They aren't sure the existing systems, such as Social Security, will be there for them in 30 or 40 years," Waltchack explains, "so they must create something new — something that is theirs and holds unlimited promise for the future."
Jmo agrees. “Younger generations tend to look toward the future," he says. “They see today's systems as outdated and inefficient and are interested in building new systems that will last even beyond their lifetimes."
Scott notes that it's easy for young adults to see the upside of getting into this early. Right now, he says, crypto is essentially the only way many young people can invest, as you typically have to be 18 to open most investment accounts.
“It's open to anyone. They aren't sure they will ever have access to existing markets, but crypto is where they can participate."
Krogsgard echoes Scott's comments. “Some believe crypto is their generation's Amazon," he says. “More than that, they see the world is changing and the crypto market isn't isolated to wealthy people. Anyone can participate and make money. Young people see it as their opportunity."
What are your thoughts on kids investing in cryptocurrency? Tweet us @gohenry #letstalkmoney and tell us what you think!