The lasting impact of the 2008 financial collapse has stretched far beyond the stock market and banking sectors. Globally, there has been a social erosion of trust in those self-serving financial institutions that enabled the collapse of the global economy. This distrust has persisted through the fallout, steadily evolving into the unequal and uncertain economic environment that has defined a generation.
From the collapse and the inequality it exacerbated, millions around the world have sought alternative means of protecting and growing their assets, away from the stifling control of centralized institutions. They have a hope for a new generation of finance that operates with transparency and fairness for all. People now see cryptocurrencies and digitized assets, powered by the decentralized, distributed, and immutable power of blockchains, to be the building blocks of this new and more equitable financial ecosystem.
Research has shown that year after year, Millennials have begun placing more trust in digital assets than in the centralized institutions that have previously dominated the financial ecosystem. In fact, eToro’s 2019 survey of 1,000 online traders found that 43% of Millennial online traders trust crypto exchanges more than U.S. stock exchanges. Even among Millennials respondents that do not trade digital assets, one-third said they would trust crypto over stocks (eToro).
The same institutions that eroded societies' trust years ago have lagged far behind the more nimble and responsive innovators delivering this next generation of finance. Instead, thousands of de-novo applications, platforms, and protocols have brought the potential for financial ownership to the masses and addressed the needs of a conscious, digital, and independent generation.
It is unsurprising that institutions have not been the ones developing these capabilities. They have historically been slow to develop consortiums that meet customer demand. Instead of understanding and developing the technologies built to disrupt them, institutions have labeled digital assets as risky, unproven, and fraudulent. Nevertheless, the viability of blockchains have continued to prove themselves with each implementation. The potential for a next generation of immutable record keeping has led to adoption and investment in the future of these capabilities. For early adopters, the returns have been generous. But for discerning investors, returns are not guaranteed by early adoption but the capabilities to quickly spot, interpret, and take action on emerging market trends.
Cryptocurrency investors rely on market sentiment, technical analysis, and operational processes to develop their own trust while seeking returns. But cryptocurrencies and digital assets are no longer relegated to the fringes of pioneering first movers with limited resources. Instead, they are equipped with an arsenal of tools to manage their digital portfolio. As the financial ecosystem adopts Digital Assets as a viable solution, their place in the next generation of finance has become clear through proven use cases of their technological capabilities. People trade cryptocurrencies because they have access to the resources they need to find success; resources that were limited in the previous generation of finance.
As these technologies grow, mature, and become embedded pillars of this next generation of finance, investors have developed, adopted, and speculated on the potential of these digital assets. This speculative nature of adoption and investment will remain. In the same way that people invest in stocks, bonds and other traditional asset classes (while still in line with their desired returns and risk tolerance), a new generation of investors and adopters have found these potentials for returns and development in digital assets as well.
Millions around the world trade digital assets not only for the pursuit of significant gains. Digital asset and cryptocurrency traders recognize that they are actively progressing the adoption and development of a democratized financial future. Those participating in the cryptocurrency ecosystem today are laying the foundation for the economic system of the future, built on trust and transparency where secrecy and deceit reigned.
Daniel Pinto - Market Analyst @ TradingBull.io
