Millennials, as might be expected, are pretty much on top of the digital universe—so maybe it shouldn’t come as any surprise that some are actually saving for their retirement that way: with digital currency.
Forbes reports on some millennials who are investing in bitcoin and other cryptocurrencies as the medium in which to stash their retirement savings. And, according to the report, “experts say that could shake the foundation that this country’s financial institutions have built their empires on.”
The article quotes Roshaan Khan, a 20-year-old senior at Virginia Commonwealth University who recently invested in both bitcoin and ethereum (another form of cryptocurrency), saying, “All of my net worth is in cryptocurrencies, because I see them as the best way to escalate my ability to be financially secure and pay off my student loans. I like the idea of decentralization, the fact that there’s a lot less corruption and political ties. That idea appeals to me … Not having to go through banks. Having financial control over our lives again.”
And according to Andreas M. Antonopoulos, the author of Mastering Bitcoin and The Internet of Money, this attitude is not surprising. Antonopoulos chalks up millennials’ attitude toward cryptocurrency as the result of betrayal.
He’s quoted saying, “When you talk to millennials who have been thoroughly disappointed by every single social institution—the government, the church, the politics, the parties—they can’t trust anyone anymore. They remember 2008, because it was the first big crash they’ve had, and many millennials have been unable to find work. They watched no bankers go to jail.”
Emil Thorsplass, a 24-year-old musician from Norway, explains in the report that “it feels better” to invest and reinvest in new technology. He adds, “I still have my regular pension fund and my bills still have to be paid through a bank account, but cryptocurrency investments have become a central part of saving for me.”
The risk of cryptocurrency isn’t turning these young people off. Instead, they’re taking a chance because they’re young enough to do so—and because it’s exciting.
Still, one wonders if they appreciate the finer legal points, such as being liable for taxes on any conventional money made by investing in cryptocurrency.
And then there are other risks—such as a Chinese crackdown on cryptocurrencies that extended a bitcoin losing streak. Bloomberg reports that China plans to ban the trading of virtual currencies on its domestic exchanges, and even though the currency has been riding high this year there’s plenty of skepticism about its actual worth.
In fact, no less a person than Jamie Dimon, CEO of JPMorgan Chase & Co., has called the cryptocurrency a “fraud,” saying in a Bloomberg report that it’s “worse than tulip bulbs” and threatening to fire any employee trading bitcoin for being “stupid.”
Dimon also characterized it as useful to people with no other options—“if you were a drug dealer, a murderer”—before admitting that his daughter has purchased bitcoin.