#Cryptocurrency investors getting younger, making millions

Is cryptocurrency financial kryptonite? The younger generations don’t think so.

Gen Z and millennial investors are flocking to buy shares of cryptocoin, such as Bitcoin or Ethereum, with the hopes of winning big. Cryptocurrency — which is a type of digital file that can be used as money, based on blockchain technology — is not controlled by any centralized entity or government, and is nearly impossible to trace.

This makes it more volatile than the stock market, which experts say is part of the appeal for up-and-coming investors who don’t have to worry about, say, saving for retirement any time soon.

“The volatility attracts people who like gambling, excitement and so forth,” said David Yermack, a professor of finance and business transformation at New York University. “They’re not so interested in underlying economics, but [rather] the chance of a very rapid, high gain, or a very rapid, sharp loss.”

Cryptocurrency gained traction with the emergence of Bitcoin 12 years ago, and has since grown to include more than 10,000 types of coins. After the major currencies hit all-time highs in May — a single Bitcoin peaked at around $65,000 — they’ve been dropping rapidly, with a Bitcoin now worth less than half that. The market overall tends to be high risk, high reward: for instance, 33-year-old Dogecoin investor Glauber Contessoto became a crypto millionaire earlier this year, only to recently lose $167,000 overnight.

Contessoto is typical of the emerging demographic of crypto investors.

The majority are under 35, and they’re overwhelmingly male, according to Yermack. Gen Z and millennial investors make up nearly 94% of the crypto market, with older generations sticking with more traditional investments, such as bonds and index funds.

Yermack believes the pandemic only accelerated this trend.

“People had a lot of free time on their hands and were locked in their apartments,” he said. “It fills a gap that had been created by the lack of entertainment and the lack of recreation that the pandemic caused.” (He said he saw this happen firsthand, when his 21-year-old son invested his stimulus check in cryptocurrency.)

He said that young investors also appreciate that crypto feels a little bit renegade.

“Young people seem to enjoy taking what we would call ‘contrarian positions’ that bet against the wisdom of Wall Street,” Yermack said. It’s an “act of rebellion” against traditional methods of investment and business.

But crypto investor Cooper Turley, 26, said it’s only a matter of time before alternative currencies are completely mainstream.

Turley, who lives in Los Angeles and works in crypto strategy at a streaming app, claims he’s made millions in the crypto market. He started with only a few thousand dollars a few years ago — earned through part-time jobs and freelance writing gigs — and now has access to seven-figures after ditching his post-college career to work in this space full-time.

A few years ago, he said, the crypto market felt “uncertain.” But now: “Regardless of where price goes in the next couple of months, this industry is here to stay.”

He’s convinced that the next corporate juggernauts — the future Apples and Googles of the world — are going to be crypto-based, with younger leaders spearheading new ways to reach potential consumers.

“Our generation is so much more aware of things like TikTok and the ‘For You’ page [TikTok’s explore page catered individually to user’s interests] and viral memes and viral content, but up until this point, there hasn’t been a way to invest in that financially,” Turley said. “What’s really exciting about crypto is that for the first time in history, we can place a financial value on social capital.”

Social media plays a role in cryptocurrency investments, for both people who are looking to invest, as well as content creators who use it to guide other’s investment decisions. Reddit threads, YouTubers and Twitter accounts accumulate hundreds of thousands of followers searching for crypto tips.

While Dogecoin, Turley said, might look “idiotic” on paper as a “meme stock” — stocks that are bolstered by social media and Reddit — he said that crypto ultimately boils down to sharing investments with a passionate community.

Maren Altman, 22, has reached full-blown influencer status by billing herself as a “crypto astrologist.”

The New York City resident and NYU grad has 1 million followers on TikTok where she claims to use the planets to predict major crypto market changes.

Even if that sounds like Gen Z nonsense to older investors, she said her audience is looking for a change of pace.

“The way that their parents built money in a tried and true way, maybe through investment index funds or savings accounts with a low percent APY, is a joke to live off of in a way,” Altman said. “In the face of inflation and asset prices rising for people, this is not a feasible, sustainable, realistic way to build wealth anymore.”

Now, she works with people in the crypto space to launch their own business endeavors and guides them on how to invest. Altman charges members $7.77 per month and offers courses ranging in price anywhere from $49 to $1,499. She also offers a CryptoCharted newsletter for $20 per month.

So far, her record is a bit uneven. She accurately predicted January’s market correction, but then wrongly foresaw a bull market in May. In reality, crypto prices dropped.

But Altman said her clients are along for a wild ride. “There’s a kind of existential nihilism,” Altman said. “If I don’t have a lot to start out with, there’s not as much to lose.”