Fintech Amazement, Why Millennials and Gen Z are investing in cryptocurrencies and NFTs, despite the risks

Fintech Amazement, Why Millennials and Gen Z are investing in cryptocurrencies and NFTs, despite the risks

Fintech – Is one of the recent tech companies to join the NFT Art revolution as they see the potential NFT Tokens have. NFT Art is a non fungible token created on the Etherum Blockchain, which is tradable but not replaceable & secured by proof signatures.  

 

NFT Art: The younger generations are very attracted to the world of digital finance: they consider it more accessible than traditional finance. It also happens in Italy, a country with poor financial literacy and practically no regulation

 

The fascination with cryptocurrencies and new blockchain-based technologies has captured Millennials and Generation Z. Many young people are proving inclined to invest in decentralized finance - also known as DeFi, Decentralized Finance - that is, an experimental form of the financial system that does not base on go-between but offers direct customer access to the market.

 

Those who bet on Bitcoin, Ethereum, and other altcoins, however, do not necessarily seek immediate profit, usually also set long-term goals: many are convinced that cryptocurrencies and the blockchain are the future of finance.

 

The Financial Times published a long article signed by Lucy Kellaway to talk about the extraordinary spread of the crypto world among UK school children. «It is not difficult to understand how it happened: there is the cool language of technology and the hype created by social networks. Digital currencies are anti-government and rebellious; they promise easy, instant money. Bitcoin has gone from 600 to 45 thousand dollars in five years, an increase of 7,400%, and for the mind of inexperienced teenagers this is the necessary proof that growth will flow into the future too, “the business newspaper states.

 

The reality described by the Financial Times is already present also in Italy. "The Millennials, plus, mainly Age group Z are becoming familiar to the industry of crypto, a tiny bit by nature and a little because many young people are pushed to invest in technologies that are closest to their way of living and seeing the world, certainly more similar to cryptocurrencies and blockchain compared to more traditional investment options », Alessio Semoli, president of Prana Ventures (the first Italian Operational Venture Capital, which supports entrepreneurs in the digital sector), tells Linkiesta.

 

The interest of these generations in cryptocurrencies is not just a trend. The prospect offered by a sector that promises new job opportunities also has something to do with it: already today many companies are looking for experts in Nft (Non-Fungible Token),

 

Less than a month ago GameStop posted a job posting looking for a senior software engineer for a possible NFT Art platform. The announcement followed a similar offer from Reddit: The American social news aggregation and discussion site was looking for a senior software engineer for a platform that features "NFT Art-supported digital assets." Plus, nearly during the  same time, Amazon Web platforms was seeking for a financial services specialist who would work with senior figures in large companies to "disrupt the way digital assets are exchanged."

 

If on the one hand, some decide to build a future in the world of cryptocurrencies and blockchains, on the other hand, some want to invest in the sector by imagining simpler investments and safe returns.

 

“Kids are so passionate about this new world that they can often get their parents or other adults, many of whom are financially inexperienced, to create an account for them. Some obtain the coin at ATMs or swap Amazon gift sets for bitcoin. However, even the meek are not constantly worthy of the fact that they are threatening cash that their household could not afford to lose, “writes the Financial Times.

 

NFTS - One of the greatest risks in this field is high accessibility: traditional investment paths generally have higher entry barriers - at least in the collective imagination - while anyone can enter the digital market (again because this is the way this world is painted).

 

And in this respect, Italy suffers a considerable delay. "According to recent research by the Bank of Italy, Italians on average have little knowledge in financial skills, and an OECD survey places us in the penultimate place in the list of 26 countries", says Alessio Semoli.

 

High accessibility and low financial literacy create a potentially very dangerous mix.

 

For this reason, the experts of Prana Ventures and other companies in the sector are organizing Live Talks for the age group of Gen Z and Millennials, with new formats dedicated to Nft, Cryptocurrency, and Blockchain.

 

"Cryptocurrency is an outlay that can offer important gains in a fast period, which is why it is highly sought after, but it is a very risky instrument due to its volatility and the lack of clear rules on its use", explains Semoli. "On the other hand, however - he continues - we must be aware that at a global level we will sooner or later have to deal with this new finance in which Bitcoin has a market capitalization of over 1000 billion dollars. From my point of view, knowledge and awareness are the necessary tools for anything, especially in technology and even more so in the case of the encounter between new technologies and finance ".

 

Among other things, in Italy, as in many other countries (almost all), at the legislative level there is still no specific financial and fiscal regulation of cryptocurrencies: currently, there are regulations that see cryptocurrencies as a foreign currency, so the investment is considered as if it were a stock exchange transaction and is taxed at the capital gain level at 26%, only for transactions exceeding a value of 51,645 Euros.

 

Also, the leader of Consob, Paolo Savona, recently stated that "States and administrations should make an effort to be able to integrate cryptocurrencies into their institutional and regulatory framework, overcoming the inadequacy of their knowledge".

 

A few weeks ago, many investors in the sector witnessed the dangers of a still little-known environment. On October 20, an unofficial NFT Art token - a digital token - of the TV series "Squid Game" (the South Korean hit series) was created which was supposed to allow access to “pay-to-play" - a game online that can be accessed after purchasing the token.

 

After growing by 310,000%, reaching a value of $ 2,861, with a market cap of $ 2.1 million, on Monday, November 1, the value of the token plummeted to $ 0.003 because Twitter temporarily limited the cryptocurrency account for "activity.

 

Suspicious"

 

The operation turned out to be a great "rug pulls": in essence, the developers of the cryptocurrency abandoned the project and ran away with the investors' money.

 

Evidence of the threat of investing in something that is not well known, without definite rules to keep to, with a large amount of cash at stake!