Millennials Retiring With Crypto: Is It Possible?
Retirement is always an adverse topic to discuss especially for Millennials who believe in the idea of YOLO or You Only Live Once but despite all this, it is still an important part of everybody’s life that needs to be planned as early as possible. Of course what is more important than the time you begin investing, is the tool you utilize to grow your life savings? Most conservative people will choose mutual funds or Roth IRA but more recently has been the preferred choice, especially amongst millennials. Let’s now take a look at why crypto is the more preferred option for Millennials retirement savings? Is it possible for you to rely on crypto?
Why are Millennials retiring from Crypto?
Retirement and Crypto seems like a topic that shouldn’t gel together considering that Crypto with its volatility is for short term traders while Retirement is a long term prospect. This is actually proven otherwise as according to a recent study done by Investopedia, 28% of the U.S. millennials are more likely to choose cryptocurrency as a tool to support themselves during retirement while 20% of Gen X and 17% of Gen Z also stated the same. This figure was higher than your normal savings platform like the 401k or IRA (25&) and stock market (27%).
The numbers go way up when you include the recent survey done by Capitalize who provides IRA rollover service, as 56% of Gen Z adults (18+) and 54% of millennials say they are including cryptocurrency or NFTs as part of their retirement strategy while only 20% of Gen X and 14% of baby boomers says the same. With More articles publishing that Millennials have finally solved the retirement issue, these numbers don’t just go way up without any reason right.
The first obvious reason is that the returns the crypto space are able to bring over a long period of time have far outperform other investment instruments. Yes the crypto space has had a dip lately and huge volatility and scams issue have plagued the crypto market ever since its inception but when you look at the performance of Bitcoin that have average 200% return per annum with the S&P 500 of 13.5% over a 10 year period, it is quite easy to see why millennials would prefer to use crypto. This is also why millennials are expected to retire early than other generation because you are getting more bank for your bucks. Of course with all this, there will always be criticism especially from the older generation which will say things like “well you could also lose your money overnight with crypto and lose all your savings”, that is true but the higher the risk, the higher the returns right. When you consider the idea that you could retire early and don’t have to work as long as your older generation, the risk kinda seems worthwhile if you choose the right crypto asset.
Second reason that is quite less known is the reason why cryptocurrencies were started in the first place, which is the loss of faith in the traditional system. Gen Y (Millennials) and Gen Z have grown up in an economy that has endured a number of economic crashes over their lifetime, unfortunately some of those crashes are self-created. The Dot Com Crash and the Great Recession in 2008 shares one common problem that is the greed of wall street and investment banks causing inflation to inflate an asset which eventually bursts. Well not only that these two crashes could have totally been avoided but the aftermath of all that is the people who caused the problem in the first place were bailed out while trillions of people’s hard earned retirement money were gone. So the question after all this, how are people supposed to trust the traditional system? Yes, as discussed before, crypto is not free from its own volatility and sanctions issues but this space has allowed millennials to enter a world where they are in control of their own assets and not tied up with whatever that is going on in the traditional systems.
The other reason as to why crypto has been a source of interest for millennials is simply because cryptocurrency and blockchain technology is the future of the world. Most of the current technology or server will use a blockchain system, most of the data or memorabilia will be tokenized using NFT, most of human interaction will be enhanced using the metaverse and finally more efficient payment systems will be created with the help of cryptocurrency. According to the latest “Pulse of Fintech” report done by the Big Four, blockchain and crypto related investments have grown 5.5 times than the previous year to reach $30 Billion in 2021 as more companies commit to explore this space. With these investments and the blockchain technology market expected to hit $40.7 Billion in 2025, it is fair to see why most millennials are committing their future to this technology.
Throughout all this, cryptocurrency might not seem like the best retirement strategy you can discuss with the older generation but it is a maturing space that not only has imploded in the short period of time and is looking to grow massively in the future. Retirement again is all about picking the right asset and HODLing it until the right time comes to enjoy the fruit of your investments but is it really possible though with crypto?
Is It Possible?
Cryptocurrency over the years has made a lot of people fortune and young millionaires but also managed to wipe out a lot of people’s savings. There are stories of people who have managed to turn $25,000 into $26 Million but also people who have bought at an overpriced market and lost it all during the current dip. The key here is to choose the right asset with proper fundamentals and buy it when it is still undervalued just like Bitcoin was at the beginning of the 2010s so you can massively multiply your investment over your working age.
Of course choosing the right asset in a space crowded with hype and shitcoins will be hard but here is the checklist of 7 common ideas that you can ponder before choosing the right crypto asset.
- Are the Vision and Mission of the developer clear and justified?
Every crypto project is made with a specific purpose or vision for the future but are those plans actually described clearly in the whitepaper? Do their action plan and vision make sense for the future or will the idea be obsolete 5 years from now? Remember your retirement is at stake so think the long game.
2. Do they have an underlying asset to hold their value?
In the crypto space, most of the coins are either fully backed by an underlying asset or not backed at all. Unfortunately for the fully backed asset, the price will mimic its underlying asset and for the not backed at all asset, their price could go up and down very easily. When you are aiming for the future with investment, choose a crypto asset that has an underlying asset to help hold its value while also still able to grow its value exponentially over a long period of time.
3. Does the project actually provide benefits for its Holders?
Choose a project that provides benefit back for the Holder who remains committed to the project over a long term and this could be in the form of staking or profit sharing. As you hold it for the long term anyway, might as well earn extra benefits from your assets along the way.
4. Do the project provide enough transparency and legality to back it up?
The key idea behind blockchain technology is transparency and if you are holding a crypto asset for the long term, it is vital for you to receive the latest updates and development from the crypto project. Of course transparency in itself is not enough as it should also have the proper legality from the right country to help oversee that their plans and development are in accordance with the law and will benefit its holders.
5. Is the project actually solving a problem?
The greatest driver in value for anything is in solving a problem as it is generally quite useless to have the crypto with the latest technology but nobody wants to use it. Bitcoin as mentioned before gained its value because it managed to solve a lot of problems that occur with the traditional financial system, that is why it remains the best performing crypto asset. Find the greatest benefit that a crypto asset is offering and check if it is a problem worth solving.
6. Does the developer team have what it takes to carry the project into the future?
Of course the developer team plays a big role in the actions taken by the project forward and that is why you should check if the team has the competence to carry out the task. Vitalik Buterin may be the idea behind Ethereum but the next phase of its journey which is Ethereum 2.0 wouldn’t be possible without the team. A great team should always be able to seek to innovate themselves with the change in time so find that in the crypto asset you are searching for.
7. Will it be accepted as a payment system?
Although cryptocurrency has been viewed as a commodity lately, the main idea behind every cryptocurrency is to be used as a payment system. For it to be used as a payment system, people need to trust it first so that is why utility is so important in the crypto space because it gives the project credibility to be utilized over their fiat counterparts. That is why your crypto asset should not only have massive value but people need to use it also.
We in Nagaya Technologies Pte. Ltd believes that there is still so much untapped potential in the crypto space for it to grow exponentially in the future. Which is why we created the world’s first hybrid crypto asset called Nagaya that is relatively more stable with the tendency to increase overtime. We hope that by the combination of a gold backup, subsidiary projects, transparency and legality will create a more sustainable value for all of you our long term HODLers. For more information regarding on the latest updates on Nagaya and our whitepaper, you can visit us at nagaya.io
Or you can talk to us at t.me/nagayaofficial