The attraction of making quick bucks has always drawn the younger generation towards risky assets. For Gen Z, it’s all about the volatility and the decentralization of digital assets like NFTs and cryptocurrency that appeals. However, these are unregulated assets, which means there is hardly any investor protection. Think of it as playing slots at IceCasino – you can win major jackpots someday, and you might even have to lose on occasions. But that does not make you stop playing, right? After all, there is a high chance for you to win big the next day. On that note, let’s see how Generation Z is hooked on NFTs and cryptocurrencies.
Factors Affecting the Attraction of Cryptos and NFTs for Gen Z
There are three main factors that are drawing more and more young people to crypto and NFT trading, and they are:
- Their natural affinity towards and ease with the virtual world;
- The gamification of digital trading amidst the pandemic;
- Easy availability of trading advice from financial influencers.
Let’s take a closer look at all these factors to assess how far these are influencing Gen Z and their trading choices.
NFTs and Cryptocurrencies – A Natural Transition
Cryptocurrencies are basically digital currencies, while NFTs (non-fungible tokens) are a way to own an actual digital image, which is touted as the digital answer to the collectibles.
Nowadays, cryptocurrencies and NFTs are just a click away. They can actually trade in thousands of dollars of assets with just a few clicks. Now, Gen Z – also known as zoomers – is a generation that is born between the mid-1990s and the early 2000s. These are the people who grew up online, met friends virtually, played games online, and opened social media accounts before they even left school. So, for them, the transition to digital assets is natural.
Impact of Gamifying Crypto and NFT Trading
All the cautionary tales of different people losing huge sums of money do not seem to deter the young traders at all. Many of them get their first shot of digital assets through the ‘play-to-earn games’ that reward the players with cryptocurrencies and NFTs that they can use in the game or trade for cash. And who doesn’t want to make real money by simply playing games? That’s the dream of every gamer of Gen Z.
The ongoing pandemic has further accelerated the trend of young people trading in NFTs and cryptos. The situation brought an extreme level of volatility to the market. Now, volatility is synonymous with opportunity in this market. As Gen Z sat at home amidst the lockdown, they were introduced to gamified trading. All the factors formed the ideal condition for the crypto and NFT trading to take off.
Easy Availability of Advice from Financial Influencers
The young and amateur traders are getting the guidance they need from different platforms like Reddit, Twitter, and YouTube. There are financial influencers outlining the risks and rewards in the market in a way that is easy to understand for the new traders. From Brian Jung to Jowella Lim, these are young financial influencers in their early twenties who have millions of followers paying close attention to their advice and caution. There is also the feeling that if these influencers can do so at such a young age, “why can’t I?”
Is Trading in Digital Assets a Passion or Addiction?
Apart from financial losses, addiction is another major danger when trading in digital assets. The world of crypto never sleeps, so young people are literally sucked in it.
There is no denying that the thrill of trading in NFTs and crypto is addictive. They can watch the cryptos going down and up on their phones 24/7, and it feels like a roller-coaster ride. There are so many who have lost money in this trade in the past but are still back to trading after knowing more about it and studying it closely. It is hard to distinguish who considers it a passion and for whom it has transitioned into an addiction.
Word of Advice for Young Crypto-traders
Though the world of cryptos and NFTs is a dangerous one, it also comes with the chance to make millions. So, the plan is not to give up trading in digital assets completely but rather to be smart about it.
Understand what percentage of your money can be invested in crypto so that if things go south, you are not left behind. You can invest and reinvest your money, but set a limit beforehand on what percentage of your earnings will be dedicated to that. Although it takes a while to grasp completely, take your time to study and understand the market to make better decisions. Lastly, do not let your decisions to trade in digital assets be swayed by emotions under any circumstances.