Cryptocurrency is a digital asset that can be used as a medium of exchange and savings. This generation of young people is known to embrace all digital assets. Even when it comes to investing, most of them prefer to do something online or through an app, rather than filling out voluminous documents.

Ten years ago, cryptocurrency appeared as a digital currency—an alternative to our current financial system. This means that cryptocurrency can be bought, sold, exchanged, or stored only in digital form. It is now a new asset class in the investment world. The cryptocurrency market is open 24 hours a day, 7 days a week, and 365 days a year. It is not necessary to wait for business hours to trade or invest in an asset.

These factors indicate that cryptocurrency as an asset class fits perfectly into the lifestyle of Generation Y. Here are the main reasons why young people need to invest in cryptocurrencies:

High and Fast Returns

Millennials are a very ambitious generation. They are looking for investments that bring high returns in a shorter time frame. While there aren't many assets that quickly generate high returns, cryptocurrency is an exception.

Since its inception in 2009, the cryptocurrency has grown in value and managed to surpass gold as the main asset class. Historically, bitcoin, which is the most popular cryptocurrency, has mostly outperformed the market, with the exception of 2018.

In the last year alone, Bitcoin has grown by 400% 3, while Ethereum (the second largest cryptocurrency) has grown by 1,000%. For example, if you invested £1,000 in Bitcoins in early 2020, their value would now rise to £4,000.

On the other hand, the well-known shares of Reliance Industries Ltd have yielded 30.34% over the past year 5. Let's say you have invested £1,000 in RIL, then you will get £1,303.

Other investments, such as term deposits, savings at the post office, etc., yield an average return of only about 7%, which does not even exceed inflation in the long run.

Replenishment of the retirement portfolio

Cryptocurrency is very unstable. This is evidenced by the fact that sometimes its 30-day gains, or losses can exceed 100%. This means that the risk and return are relatively high. Nevertheless, they are a great addition to the millennials' retirement portfolio.

First, millennials are the generation that doesn't have access to a pension from their employers. Even those who work in the government are unlikely to receive a pension after retirement. Ergo, they need to look for investments that can generate income for a comfortable retirement.

Second, it's the younger generation, which means they can afford to take risks. They have more time to try out new assets and gain investment experience. In addition, research has shown that the pandemic has increased Generation Y's propensity to take risks than ever before.