Bitcoin-Powered Generation Z to Rule Over Millennials
Sociologists have been trying to separate Generation Z from millennials for years. However, the young people’s intertwining behaviors, interests, and creeds made the task difficult, if not confusing.
The year 2020 seems to be the turning point in dissociation between members of consecutive generations. Global events, technological advances, and even Bitcoin are among the factors that influence this much-expected step in societal evolution.
The Present-Day Context
The ongoing COVID-19 pandemic and the subsequent, unavoidable economic crisis will shape the future of Generation Z. Their life choices will most likely differ significantly from those of their predecessors. When it comes to finance and consumption, they have a difficult yet exciting task to redefine behavior, financial understanding, and, ultimately, long-term profitability.
While the elderly are already bemoaning the bad hand dealt for the youngsters, things do not look so bleak for the “Gen Zers.”
A pre-pandemic survey showed that over 20% of affluent millennials and adult-age Gen Zers have invested in cryptocurrencies. It might not seem much, but it is a staggering figure when you compare it to the crypto investments made by the rest of the wealthy population represented by only 3% of its members.
Another 2019 survey revealed that more than 60% of people aged 18-34 were familiar with Bitcoin, cryptocurrencies, and other digital assets.
In 2020, financial experts have noticed a sudden surge in people’s interest in Bitcoin and other alternatives to the traditional financial system. Google Trends reports a steady increase in browser searches for the word “Bitcoin” throughout 2020.
The Coronavirus crisis opened the lid on a Pandora’s Box full of issues and risks that haunt our outdated understanding of finance and the economy in general.
Traditional banks function on rigid mechanisms that have lost their meaning in today’s increasingly digital world. Their operations are slow and restricted by central authority-imposed regulations. They fail to understand network interconnectivity or to provide their clients with more control over their assets.
If they had been paying attention, they would have known that Generation Z is all about speed, diversity, mobility, the power to the individual, and networking.
The advent of cryptocurrency and blockchain technology fits perfectly with the new generation of adults. As a matter of fact, it suits them so well that they may gain a considerable advantage over their “next-of-kin” generation, the millennials.
Generation Cohorts in a Nutshell
You may have heard about Gen Zers and Millennials in various contexts, at least in the last two decades. If you don’t know what they stand for, they may sound like alien species colonizing our planet. So, we’ll try to define them briefly before we delve into their financial perspectives.
According to social researchers and popular media, our society consists of several demographic cohorts defined by their birth year and the one when they reach adulthood. These periods usually span between 15 and 20 years, and they vary slightly depending on statistics, research, historical events, and technological progress. Here are the most important ones:
- The Silent Generation born between 1925 and 1939
- The Baby Boomers born between 1940 and 1959
- Generation X born between 1960 and 1979
- Generation Y, a.k.a. The Millennials born between 1980 and 1994
- Generation Z, a.k.a. Gen Zers born between 1995 and 2010
- Generation Alpha born between 2010 and 2025 (TBD)
According to in-depth social research, the differences between generations are obvious to the outside observer, and the ones between millennials and Gen Zers are growingly noticeable.
Generation Z vs. Millennials
The millennials were born when the world was going through full-fledging globalization. Throughout their childhood and early adulthood, they experienced a period of predominantly economic stability and peace. They witnessed the emergence of the internet and smart technologies, and they grew up valuing self-growth experiences, travel, and flagship brands.
Generation Z members were born when the digital era was already established, which is why they are often referred to as digital natives. They grew up experiencing social media, virtual reality, and mobile technology as everyday realities. Gen Zers are contemporary with the concept of “uniqueness in diversity.” They value dialogue, political correctness and have a pragmatic life approach.
There isn’t a case of which generation is better. But, there are economic realities that impact the values and behaviors of each demographic.
For example, millennials, the youngest of whom are 26, have experienced a relatively peaceful economic reality throughout their lives. They even followed Generation X’s steps and built their potential life trajectories on student loans, mortgages, and consumer loans. Most of them are either married with children or on the brink of making these decisions.
Gen Zers are mostly the children of Gen Xers. They have seen their parents struggle with the 2008 financial crisis and the slow, often awkward adoption of new technologies. The oldest digital natives are barely 25, but most of them are in high school and have to face the radical changes imposed by COVID-19.
From a tender age, they experience canceled school, lockdown, delayed exams, and annulled events. Life as they knew it, or at least as they were expecting it to turn out, has been called off. Furthermore, during one of the most defining periods of their lives, they have to build their future in an uncertain economic environment.
According to the International Labor Organization, thanks to the Coronavirus pandemic, we face global economic fallout much worse than the Great Depression. The world economy is expected to suffer the equivalent of 400 million full-time jobs in lost work hours. Overwhelming government debt, deferred bankruptcies, and widespread poverty will define our world for many years to come.
Why Gen Zers Have the Upper Hand
It may seem like the digital natives have their work cut out for them. In the eyes of many, they are a lost generation that was left with nothing but the shortest straw to draw.
However, it doesn’t have to be that way. There is a silver lining for Generation Z, which may very well bear Bitcoin’s name.
Gen Zers and millennials account together for more than 60% of the global population. Their financial choices will shape the world of tomorrow. The up-and-coming Generation Alpha depends massively on their predecessors’ ability to make bold yet lucid economic decisions.
Millennials are barely starting to pay off student loans, mortgage debts, and consumer credit. Most of them are scared of losing their jobs, and rightly so. They witness industries that they have studied for vanishing in today’s economy. The lifelong careers that they started preparing for in high school are impossible to build. In the worst cases, they have to battle through the economic collapse while building a family.
On the other hand, most Gen Zers are still attending high school. They have yet to make hard financial decisions. They can still take their time to pick a career, a job, or a life partner. Furthermore, they are evolving in a cultural mindset that values versatility, pragmatism, and innovation.
With this in mind, it is easy to see why Generation Z finds it easy to embrace cryptocurrency and other digital assets. Alternative economic opportunities like Bitcoin investments, Decentralized Finance (DeFi), and blockchain applications appear superior options to those offered by the traditional financial system.
There are already successful examples of teenage millionaires who had the visionary idea of investing in Bitcoin and other blockchain-based assets. The cryptocurrency market is willing and able to welcome digital natives’ investments who wish to diversify their financial opportunities before the entire economy comes crashing down.
The side effects of the current pandemic and subsequent economic crisis will be seen and felt for many years to come. Generation Z will most likely have to face more mental health deterioration than their predecessors. However, if they manage to overcome it, they can set up a new paradigm for money, economy, and financial stability.