A survey conducted by Nibud and Rabobank shows that bitcoin is a popular investment product among young people in the Netherlands. Yet traditional investments such as stocks and bonds are chosen even more often than the digital currency.
The study consists of a survey that was completed by 1,568 respondents between the ages of 18 and 30. This shows that 27 percent of young adults in the Netherlands invest in cryptocurrencies such as bitcoin. This is slightly less than the 31 percent who have investments in shares, bonds, funds and/or index trackers. Ten percent of young people only invest in cryptocurrencies such as bitcoin. Investing is also much more popular among men (38 percent) than among women (24 percent).
One reason young people give for investing is to build up wealth. Because the savings interest rate is historically low, achieving a higher return with investments sounds attractive. Yet young people still save a lot. 86 percent of young adults have savings in a bank account or cash.
In the United Kingdom, investing in cryptocurrency among young people is also popular. 45% of all UK young investors start their investment career by buying crypto. Bitcoin is also the most chosen crypto currency there. As many as 1 in 5 British young adults between the ages of 18 and 29 have ever invested in bitcoin.
Furthermore, 27% of respondents said they have used their credit card to invest in a cryptocurrency such as bitcoin. A worrying development according to British stock exchange watchdog FCA. The FCA has therefore started a campaign to make young people aware of the risks of investing.
Bitcoin as a savings
Young adults, on average, find investing in cryptocurrencies such as bitcoin riskier than investing in traditional investment products. Incidentally, the Nibud study does not distinguish between bitcoin and other crypto currencies. This is a pity because there is a big difference between these two.
Bitcoin is the first cryptocurrency to have a number of features that many other coins do not have. The innovative thing about Bitcoin is that it is decentralized; it is digital money where there is emphatically no central party in control. The network exists independently and on its own. This makes the network secure and the scarcity of bitcoin reliable. After all, there is no one who can print more bitcoins.
Most cryptocurrencies use the same blockchain architecture as Bitcoin, but that is not enough to create a reliable, secure and decentralized network. Often there is a company or developer team that is in control. We wrote before about the differences between bitcoin and other cryptocurrencies.
The research sees cryptocurrency as a risky investment. Many bitcoiners think differently about this. For them, bitcoin has unique monetary properties that make it more attractive to save than euros. Bitcoins are less subject to inflation and thanks to the decentralized network, trust in an intermediary such as a bank is not necessary. With Bitcoin you have everything under control. The business community is also increasingly looking at it that way; they use bitcoin as an anti-inflation tool. In an earlier article, we took a closer look at how bitcoin can protect against currency depreciation.
A popular investment strategy among bitcoiners is to make periodic and automated purchases. This way you are less affected by the volatility and you do not have to ‘time’ the market. This is possible from small amounts with bits, the new service from Bitonic.
Parliamentary questions
The research did not go unnoticed in politics. Member of Parliament Tom van der Lee of Groenlinks has asked parliamentary questions about the large number of young people who invest en masse in cryptos. He thinks it is undesirable that the younger generation is exposed to advertising about cryptocurrencies and investing, without substantial information about the risks.
We can (hopefully) expect the answers to these parliamentary questions within three weeks.
Investing in Bitcoin involves risk and volatility. It is therefore important to gain some basic knowledge first. For example, read our quick guide for beginners
