By Josiah Wilmoth
A top strategist at TD Ameritrade said that he believes soaring interest in cryptocurrencies could help brokerage firms attract millennial investors to traditional stock trading.
Cryptocurrencies the ‘Greatest Opportunity’ to Attract Millennials to Trading
The stock market’s present bull run began nearly a decade ago when the youngest millennials were in grade school and the oldest had only recently entered the professional workforce. Despite experiencing this prolonged period of appreciation, however, the vast majority of millennials are wary of investing in stocks.
TD Ameritrade chief market strategist J.J. Kinahan said that cryptocurrencies could be the antidote to this phobia.
“People complain that we haven’t gotten millennials to trade. Maybe this isn’t the product I’d like people to start with, but this is the greatest opportunity we’ve had in the market to get people who weren’t traditionally interested in the market,” Kinahan said in an interview with CNBC’s “Closing Bell.”
A survey conducted in July 2017 found that just 13 percent of millennials would choose stocks as their first option for long-term investing. Respondents in this age group were far more likely than baby boomers and their parents’ generation to choose cash over stocks for long-term investments. They were also the age group most that displayed the most affinity for gold.
‘Silly’ to Tell Millennials ‘You’re Wrong’
Despite this cautious approach to traditional investment products, millennials have embraced the volatile cryptocurrency markets at a far greater rate than any other age group.
A survey conducted by venture capital firm Blockchain Capital found that approximately 30 percent of millennials would prefer to own $1,000 worth of bitcoin versus $1,000 worth of stocks or government bonds.
As Strategic Coin reported, TD Ameritrade was one of the earlier brokerage firms begin processing bitcoin futures trades for its clients.
Kinahan said that traditionally, TD Ameritrade advises clients to use 10 percent of their investment capital to speculate on high-risk assets and products — a group that would include cryptocurrencies — but millennials often want to invest as much as 90 percent in speculatory investments.
“Do I agree with that? Not necessarily, but for us to say ‘you’re wrong’ is silly,” he said.
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Featured Image Source: Alyssa Schukar/The World-Herald