Millennials may be skeptical of overarching financial institutions, but when it comes to cryptocurrencies, the largest generation in the U.S. eagerly embraces potential disruption, according to a new study published by Edelman.
The reason? According to the report, it’s President Trump’s Tax Cuts and Jobs Act -- signed into law last December -- that temporarily increased more people’s take-home pay.
Released in October, the report found that 25 percent of affluent millennials (anyone from the age of 24 to 38 who has at least $50,000 in investable assets or $100,000 in individual or joint income) are using or hold cryptocurrency. That’s on top of another 31 percent of millennials who expressed interest in using it.
“They’re certainly open to new technologies in the investing world, just like they currently have in the rest of the world,” Deidre Campbell, the global chair of Edelman’s Financial Services Sector said.
And when millennials are coming off of a “very solid foundation,” Campbell said they’re more inclined to invest in potentially riskier financial systems, like crypto.
About two-thirds of rich millennials said the tax overhaul “significantly” increased their take-home pay, with most using the savings to either pay off debt (44 percent), increase their retirement savings amount (43 percent) or pay off debt (43 percent).
“In fact,” she said, “They’re using the tax cuts that they got to save.”
Despite the interest in crypto, a majority of the 1,000 respondents said they found the financial system institutions to be confusing and difficult -- and noted that they inherently distrust it.
About 77 percent of the rich millennials said they believe the financial system as a whole is designed to benefit the rich and powerful at the expense of ordinary people, compared to 61 percent of the affluent Generation X who believe that.
Millennials (born between 1982 and 2000) lived through the 2008 recession, and said they fear the likelihood of another financial collapse, with about 77 percent of respondents saying they believe there will be another crisis in the near future, caused by the behavior of the financial institutions. Only 58 percent of affluent Gen X members believe another financial crisis is on the horizon.
“They’re growing up,” Campbell said. “They want to take matters into their own hands. They’re very much interested in working with companies that are making a difference in the world, but they are smart about investments, and they’re looking for companies that can get them there.”