The CEO of Bitcoin exchange Amber has claimed that millennials are turning to Bitcoin because they have lost faith in banks. Speaking to Yahoo! Finance, Aleksandar Svetski said that the 2008 financial crash made young people realize that banks were not infallible, and that seeing them get a multi-billion-dollar bailout while their savings tanked has caused them to look seriously at financial alternatives like cryptocurrencies.
Bitcoin Is not Just for the Young
Svetski cites a number of surveys and studies to back up his claim, including recent findings that “a third of millennials have noted that they’d prefer to hold Bitcoin over shares” and that millennials are five times more likely to say that Bitcoin is the best way to save for the future than older adults are.
Svetski adds that it is not just young people who are buying into Bitcoin, but traditional investors too:
We experienced this first hand at a recent Investor conference. A number of traditional investors, all who are familiar with currencies and precious metals such as gold were enquiring into how to buy and hold some Bitcoin for the very same reasons as they hold gold and other international currencies.
Erosion of Trust in Traditional Banks
Svetski puts the reason for this growth in interest and ownership of cryptocurrency down to one thing – an erosion of trust in traditional banking. The fall of banking giants like Lehman Brothers in 2008 and the consequential bailing out of other troubled firms did not go unnoticed among young people at the time, says Svetski, as the banks “got free money through quantitative easing while the average person’s cost of living continued to rise.”
This has resulted, Svetski says, in a realisation of the fragility of the seemingly impervious financial system, which has led to a move towards “trusting math [Bitcoin]…over trusting the establishment.”
The Future is Decentralized
The world is becoming increasingly cashless, and as a result the idea of digital money is no longer as scary, especially to young people who embrace change. As a result, a move towards a decentralized system where banks are no longer needed becomes more and more viable with every passing generation.
With this knowledge, it’s no surprise that the older investors like Warren Buffett and Charlie Munger, who together own massive amounts of shares in banks and insurance companies, are suspicious of cryptocurrencies – they fear change, both on an ideological as well as a financial level.
Young people are not drawn to following in the footsteps of people like Buffett and Munger, they are drawn to the ideas of Elon Musk, Jack Dorsey, and Mark Zuckerberg, tech pioneers who are, in the case of the second two, actively pushing the adoption of cryptocurrency.
This combination of a lack of trust in the old order and the arrival of the best opportunity for change since banking began is why a decentralized future is brighter and more possible now than at any time in history.