Author: The Rhythm of Bitcoin
Translation: Flash Chan
Source: Crypto Valley
In the coming decades, millennials will be the richest generation in history. They have started to switch to unconventional banking. BTC is considered a beneficiary of the "great wealth transfer" of our time, and banks should be worried about it.
Millennials are the population born between 1981 and 1996, and they are roughly 22 to 37 years of age. They will be a key determinant of the future of BTC and other crypto assets.
According to the US Census Bureau's population projections, millennials will surpass the richest baby boomers in history and become the largest adult generation in the United States. This is an important moment for a simple reason: money. Baby boomers have enjoyed record long-term economic expansion, which has created a period of prosperity in which wealth is accumulated. They will pass a huge $ 68 trillion in wealth to their children, the largest wealth transfer ever.
- Silent generation: born 1928-1945 (ages 73-90);
- Baby Boomers: 1946-1964 (ages 54-72);
- Generation X: born in 1965-1980 (ages 38-53);
- Millennials: born 1981-1996 (ages 22-37);
- Generation Z: 1997-present (0-22 years);
It happens faster than you think. Millennials' disposable income is expected to grow to $ 7 trillion over the next decade, and by 2030, their wealth will be five times what they are now.
Millennials have so much wealth, what are they planning to do with that money? It's simple, either spent or saved. But how will banks adapt to this change? The answer is not as simple as it was in previous generations, because the banking industry now clearly has mistrust.
According to the Millennial Disruption Index, a three-year study of 10,000 millennials, most millennials (71%) say they would rather go to the dentist than to Willing to listen to anything the bank says. This mistrust is not entirely unjustified.
Millennials can be born as early as 1981. Their lives and ideas were defined by events in early 2000. At the time, they were all big enough to experience and understand the events of 9/11, but also to emerge from the 2008 recession as young people. The first decade of the new millennium is full of instability. The banking industry bears the brunt.
The global financial crisis of 2008 has sounded the alarm, especially for millennials. These seemingly stable institutions have helped many people realize the "American Dream" of owning a home, a car, and a family, but they have also left millions in debt. Banks know that most of this money can never be repaid. The worst result of this greed is that taxpayers have to rescue them to prevent the entire system from collapsing.
The financial crisis of 2008 was the worst financial disaster since the Great Depression, and it had devastated millions of American families. Family wealth totaling more than $ 13 trillion has disappeared, 11 million people have been displaced, and 9 million Americans have lost their jobs.
Even the largest brokerage company in the world, Merrill Lynch, which had more than $ 2.2 trillion in client assets, was not spared and collapsed almost overnight (finally acquired by Bank of America). If an institution can disappear in an instant and take away other parts of the entire financial system, then it is not difficult for us to understand the concerns of millennials and the mistrust of the same system.
The incident does not have to be as dramatic as Merrill ’s failure and rescue, so that people can gradually develop mistrust. Wells Fargo was later arrested and opened 2 million deposit and credit accounts in the name of the customer without the customer's consent. These fake accounts are designed to help meet the company's bonus quota. Wells Fargo's response was to fight in court until they were forced to pay a small fee, and then posted this ad almost ten years later:
Sorry, you have failed our trust.
Millennials have made it clear that they do not accept any apologies. A Harvard study found that only 14% of millennials believe “all or most of the time” that Wall Street will do the right thing. At the same time, 83% of Americans believe that Wall Street is no more ethical than it was in 2008.
Banks are such a place, they lend you an umbrella in good weather, and then ask to return it when it starts to rain.
Obviously, traditional banking is far from the perfect solution. Millennials are too risky to believe in a system that has been proven to fail.
Past events have highlighted the instability of banks, and it's no wonder millennials are considering other forms of wealth storage. The majority (68%) of millennials will strongly consider leaving their traditional banking relationships in favor of tech companies' digital banking and payment services-products from Facebook, Google, Apple and Amazon. In sharp contrast, only 32% of baby boomers are prepared to make the same transition.
This is not to say that all millennials dislike their banks. According to a survey by Scratch, about half (53%) believe that there is no place to store personal assets other than a bank. They accepted this traditional system because there seemed to be no better alternative.
Although not as large as the four tech giants mentioned above, as of the first quarter of 2019, PayPal's Venmo app had 40 million users, and Square's Cash App had 15 million users. It's no surprise that one-third of millennials think they don't need a bank at all in the future.
This inherent mistrust of institutions has laid the foundation for a new way of investing. A survey by eToro shows that millennials believe crypto assets are an asset more than traditional Wall Street stocks. This survey by independent research firm Provoke Insights interviewed 1,000 U.S. online investors aged 20 to 65 and asked them about stock exchanges, crypto asset exchanges, and the 401K plan (a fund (Style pension insurance system), 43% of millennial respondents said they trust crypto asset exchanges more than American stock exchanges.
Putting aside trust, some millennials are using crypto assets, and more people may use them in the future. A quarter (25%) of American millennials hold or use crypto assets, they are between 24 and 38 years old, have a personal or family income of $ 100,000, or have $ 50,000 in investable assets. Another 31% are interested in using crypto assets. A study conducted by Blockchain Capital found that 9% of the population owns BTC, with 18% of those aged 18-34. Millennials have chosen systems based on mathematics and code over traditional institutions. This gap is almost double or even triple the previous generation.
Millennials are a generation that has been and is heavily influenced by technology. From this generation, innovation has grown exponentially. Most people may have grown up using both a landline phone and an iPhone. "The world is at your fingertips" is no longer just the slogan of AOL. The concept of Internet of Everything has shaped an entire generation. Millennials behave and experience differently from previous generations, who have experienced digital education like never before. They grew up in an era of technological change, globalization, and economic collapse. This makes it difficult for leaders and institutions to see the world from their perspective.
Their ability to use, apply, and understand different technologies sets them apart from other generations. After all, they were the first to grow up surrounded by digital technology. This includes broadband internet, home computers, video games, social media and smartphones. According to the Pew Research Center, more than 90% of millennials (93%) own smartphones, compared to 90% of Generation X, 68% of baby boomers, and 40% of silent generations.
Millennials are already reshaping the economy. One of the important changes is the shift to digital. The transition from traditional sports events to e-sports is a perfect example of this generation's transformation. The history of sports can be traced back to the era of civilization before BC. It is not surprising that they are still very popular today. However, the rise of esports is surprising, at least for older generations. Millennials are the overwhelming majority of audiences in the esports industry, with a 73% share.
It is important to recognize the scale of these video games and digital media in recent years. A major reason against the BTC value proposition is that it exists only in digital form, which is intangible to most people. Millennials are not worried. If anything, this is a selling point for BTC as an asset.
E-sports is the fastest growing sport in the world. Last year, e-sports events beat almost all sports events in the United States.
League of Legends is one of the most popular video games in the world. Every year, Riot Games hosts competitions with teams from around the world. This year's semi-final attracted 4 million viewers, not counting the huge Chinese audience.
The popularity of esports is a global phenomenon and they will continue to gain attention. Last year, the championship for this event had 200 million spectators in China and millions in other countries. Just 10 years ago, the founders of the sport didn't even intend to host e-sports tournaments, and they thought that people didn't need to watch video games. In 2011, about 1,000 fans participated in their tournament for the first time, and now the tournament has hundreds of millions of young spectators.
But it's not just about watching these video games. These games involve unique built-in currencies. These are purely digital currency, and this pure virtual currency can be used to exchange other goods or equipment. Through it, people can freely buy and sell and participate in transactions.
Initially, virtual currencies were completely internal to the gaming environment. Many games have now evolved to allow players to buy more "game coins" with real-world money, which can buy goods and services in the game.
Fortnite is a relatively new video game with annual revenue of $ 2.4 billion last year. Although this number is amazing, it is even more incredible that the game is completely free. But to buy "game" content, such as buying different outfits for your character, you need to exchange dollars for the company's virtual currency. The vast majority of the company's revenue comes from the sale of the virtual currency they created. And, Fortnite is not the only entity that makes money by selling game currency:
- National Football League: 141 million;
- E-sports: 84 million;
- Major League Baseball: 79 million;
- NBA: 63 million;
- National Hockey Federation: 32 million;
- Major League Soccer: 16 million;
We are in the digital age, and electronic money is inevitable.
The distance from virtual currency to crypto assets is smaller than many people realize. BTC shares many characteristics with currencies that the younger generation is used to. Here is a simplified comparison between BTC and banks:
1. First, go to the bank during the bank's business hours, which is difficult to match with the typical nine to five working hours.
2. Show your ID. Many people may not even have one, because it takes time and resources, at least in the United States.
3. Give them your Social Security number. This number is easy for identity theft because you will need it for your whole life.
4. Hidden fees are charged because you did not meet the minimum deposit or any other factor.
5. Take out an initial deposit.
6. Show proof of address.
7. Try to read ten pages of legal documents and sign to waive your right to privacy. If funds are lost, sign to waive their responsibility.
8. Wait a week for your funds to be processed simply because the teller who processed your order has forgotten it.
9. Where or how your funds will be used, although you have given full trust to the bank.
Honestly, this description is a bit exaggerated, it is just to emphasize the differences in millennial habits. BTC is just like the Internet, providing immediate feedback, just like the Internet without borders. Millennials want on-call services with just one click, without any restrictions.
When it comes to the "huge wealth transfer" of baby boomers to millennials, we can be sure that BTC is positioned as a tool to store new wealth. Millennials are showing a strong trend, embracing the digital age with open arms, while dismissing the traditional financial system.
- League of Legends-$ 1.4 billion;
- Arena of Valor in the West-$ 1.3 billion;
- Pokemon Go-$ 1.1 billion;
- Candy Crush Saga-$ 1 billion;