There is an increasing amount of interest in cryptocurrency trading by millennials which is not surprising.
After all, they were the ones who grew up with computers and the advances in technology and they know applications and market trends. They also are skeptical of traditional financial institutions that their parents used.
Target market for financial firms
Interest by millennials in cryptocurrency is gaining traction which has resulted in new solutions, improved tools and education geared towards these young investors.
What’s the real story?
A recent survey that was commissioned by the leading social investment broker eToro found that:
- If traditional institutions offered crypto, millennials would be more inclined to enter the crypto space. 77% said that they still have faith in the stock market, and would be more inclined to invest in crypto if well-known mainstream financial institutions offered crypto.
- That the existing crypto traders would invest more money in cryptocurrencies
- Almost half of the millennials that were surveyed declared that they trust crypto more than traditional markets, resulting in a shift of trust from stocks to crypto.
- 74% of crypto traders said that they would like to see allocation of part of their pension plan (401K) in crypto assets. 45% who don’t trade crypto said the same thing.
Managing Director at eToro U.S., Guy Hirsch said that the experience with the stock market has seen a great deal of loss of trust in the younger investors which has resulted in a generational shift from traditional stock exchanges to crypto exchanges.
He went on to say that with education on the benefits of blockchain technology there is an increase amongst investors.
According to Hirsch, there is a clear desire by people with 401k portfolios who are interested in investing in crypto assets but advisors need to get more educated and feel comfortable in offering crypto assets to their customers.
For this to happen, there are a number of regulatory and market changes that need to occur which could be aided by the approval of ETFs that track crypto assets.
An opportunity for traditional institutions
In a survey conducted by Provoke Insight, 1,000 people between the ages of 20-65 were asked about their trading and investment habits.
What’s the real story?
It revealed that 59% of all (millennials and the older generation) of them surveyed would invest in crypto if it was made available by a traditional financial institution.
The results clearly indicate that by adding crypto to their existing portfolios, traditional institutions are presented with a new opportunity of attracting new millennials and older investors.
The winning formula = Trust in traditional institutions + crypto
The outcome of the eToro survey suggests that traditional finance and crypto could have a winning formula if they combined, helping attract new customers in financial firms while boosting the crypto market.
How can you actually use this?
Education in crypto is an important aspect in trading, with the new wave happening now in crypto, so are new innovative trends.
To make sure that you are on the top of the wave, here are a few useful tips that will help you understand the ever-changing market.
The most popular option of buying cryptocurrency amongst people is to hold it for a certain amount of time and then selling it for a profit.
Now, today eToro has emerged as the top social trading platform who offer the biggest array of tools to invest in cryptocurrencies and other assets.
They have also invested in the largest selection of cryptocurrencies there is on offer in the market place with access to global crypto markets through contracts for difference (CFDs).
With CFDs, you never actually own the asset. It is based on an agreement between you and your broker and you predict the value of the asset and whether it will increase or decrease in value.
The most well-known cryptocurrency is Bitcoin which made headline news, breaking through all barriers and making some traders millionaires overnight in 2018.
But in ensuing volatile trading, the prices dropped where it has sat for almost 6 months before cryptocurrencies once again surged in price only a week ago.
Now, eToro who’s CEO firmly believes in the potential of cryptocurrencies and blockchain technology, has invested in a number of initiatives promoting cryptocurrency trading with education, marketing and increasing their portfolio on their platform.
Today, they offer the biggest selection of cryptocurrencies on their platform. They firmly believe in the future for cryptocurrencies.
Right now, we will give you a short guide of how cryptocurrency trading works. But for a more detailed guide on all aspects and the different trading strategies, techniques and advanced tools, their website has a wealth of information to make you successful.
You are also able to put your knowledge to the test without investing any money by using their free demo account.
Here, you can practice trades and familiarize yourself with their easy to use platform before investing your own money.
Understanding how it works
Here’s the deal:
Trading cryptocurrency CFDs means that you are predicting the future change in value of a certain cryptocurrency.
You are also able to open contracts on a performance of a crypto relative to a fiat currency, speculating on the currency performance. In most instances, it is the USD. As an example:
BTC/USD (Bitcoin, US dollar)
BTC/ETH (Bitcoin, Ethereum)
LTC/USD (Litecoin, US dollar)
Additionally, you will find the Swiss Franc which is also used widely in crypto cross pairs.
eToro recently added additional fiat pairs where traders today can trade the following fiat pairs:
There are a wide variety of choices! At eToro, they offer, Bitcoin, Ether (digital currency for the Ethereum blockchain), Bitcoin Cash, Ripple, Dash, Litecoin, Ethereum Classic, Stellar Lumens and NEO.
Understanding technical jargon
Below are some words that you need to be familiar with if you’re going to trade CFDs:
Going short – Means that you are selling high and buying low, you profit on the decline in price
Going long – Betting the price will rise. (Look: Both these strategies offer potential in both the rising and falling markets.)
Leverage – Allows you to buy and sell CFDs with more capital than you actually have.
Ask price – The price which you can buy a CFD.
Bid price – The price which you can sell a CFD.
Margin – The amount of money you need to deposit to open a CFD position.
Stop loss – This is a trading tool that allows you to set a predetermined price level at which your CFD position will be closed.
Take profit – With this strategy you are able to set the price level at which your position will be closed, securing any profits before the market moves against you.
So what are the benefits of cryptocurrency CFDs trading?
- You don’t have to deal with crypto exchanges or open a storage wallet
- You don’t have to actually own any crypto to trade cryptocurrencies
- Benefit from rising and falling markets
- Access to a whole range of the most popular cryptocurrencies
- Reduce potential risks with trading tools such as stop-loss and take-profit
- Magnify gains by trading on margin
- CFDs trading offers excellent support compared to crypto exchanges
Popularity in cryptocurrency trading and new technology advances in blockchain continues to rise. It is the new wave of the future and you can be too regardless if your a millennial or not.