Why are older people using crypto?
There’s a stereotype that sits alongside your typical crypto user. Young, male, tech-savvy. But there’s more and more evidence emerging that suggests that this isn’t the case anymore. Last month, we worked with the Stellar Development Foundation to release our second research report, looking into crypto adoption and usage. To say that the findings were intriguing is an understatement.
Although there were a huge number of influences and factors at play, our results showed a clear correlation between age and both crypto awareness and usage.
With Age Comes Wisdom
Our first survey in 2020 turned over an important finding, showing that people of all ages are more aware of and using crypto than we thought. In this year’s survey, our research showed that it was older people that were far more likely to have heard of crypto, with those aged 65+ the most likely.
A potential reason for this could be down to the information that older people are exposed and reading. Given that older people are at later stages of their careers, their likely to have larger incomes and savings that they’re looking to invest in the run up to their retirement.
In an era of low interest rates and the threat of a global recession looming, these same people are probably looking elsewhere to diversify their assets. For consumers that may have otherwise turned to the (now struggling) stock market, research online might instead suggest investing some of their savings into crypto for a longer-term investment, such as Bitcoin ETFs or blockchain-based companies.
Risk-Takers vs. Risk-Averse
However, awareness and usage do not necessarily go hand-in-hand. Despite older people being more crypto-aware, our survey shows that they are also far less likely to own or have owned crypto.
"Do your research” is a common piece of advice given to crypto newbies, but this may also be a huge determining factor in why older people choose not to purchase crypto. Unfortunately, crypto has had its fair share of negative coverage in mainstream media that focus on things like the falling BTC price, or people losing access to their wallets.
Older people are notoriously a lot more risk-averse, and with exposure to this kind of material, they’ll probably be pretty easily influenced and put off using crypto altogether. Similarly, given that older generations often place more trust in traditional financial institutions that’ve been using for years, they’re likely to be more sceptical of any alternative financial institutions, currencies or forms of investments.
Our research clearly shows some of their major concerns; namely volatility, safety, cost, and a lack of knowledge on how to use it. Seemingly, older age groups tended to have more issues surrounding security. Since we’re talking about where to invest people’s hard-earned money, it’s unsurprising that they might be worried about the decision.
FOMO in the Crypto World
Despite the fact that there are now over 80 million crypto wallet holders globally, a survey by Cardify suggests that over 1 in 3 people know very little about the currency but choose to invest anyway. This may largely account for the risk-taking nature of a lot of younger people.
FOMO is a real thing, and it’s a huge issue for Millennials these days. With many arguing that crypto is the future of the global economy, and a cool thing to be a part of since well-known celebrities such as Kanye West and Paris Hilton are showing their support, it’s no wonder that young people are wanting to get involved.
Don’t Invest More than you can Afford
In and out of the crypto world, any financial advisors top tip is to make sure you don’t invest more than you can afford to lose. With that being said, regardless of your age, it makes sense that those with a larger income or savings are likely to invest more into crypto. Our survey clearly shows that older generations that do choose to invest are likely to put more in, with the amount generally reflecting the socioeconomic development of the country they live in.
The Truth about Volatility, Security, Cost & Understanding
The good news is that a lot of the concerns raised by different age groups are purely based on rumours, speculation and a lack of education. In reality, there are huge benefits to crypto that outweigh any risks, namely crypto’s low costs and faster transaction speeds, making it a great option for cross-border transfers and an alternative form of investment for any age. Nevertheless, fears around the safety and security of crypto need not be an issue, nor an inability to use the technology, since forward-thinking, innovative apps like Wirex are making it easy for everyday users of all ages to access crypto. Developing regulatory frameworks overseeing the crypto space and improvements in secure technology are also helping to ensure that customer’s crypto funds are kept safe.
HODL! Even if volatility is a concern, there’s a lot of research suggesting that holding crypto over a longer period of time is where the real value is. Nevertheless, stablecoins are a form of digital currency pegged to a stable, traditional asset, that help remove this volatility issue, allowing users to take advantage of crypto’s benefits without the downside.
The above highlights the important role that crypto companies have in educating consumers, young and old, to feel empowered to take advantage of and realise a fully digital economy.
You can read more about the Wirex and Stellar report here, and over the next few weeks, we’ll be releasing even more insights into the brand-new research from within this report.