Cryptocurrencies, NFT Top Assets for Young Millionaires: New Survey

Close to 50 percent of millennial millionaires have at least a quarter of their wealth in cryptocurrencies, says a new survey.

According to the study dubbed, online Millionaire Survey, which was conducted between April and May by the  Spectrem Group alongside CNBC, noted that the boom in the crypto market continues to create wealth for young early adopters.

Of the young 750 investors with at least 1 million Dollars in investible assets surveyed, 47 percent have over 25 percent of their wealth in cryptocurrencies. More than a third of these millennial millionaires have at least half their wealth in crypto.

The findings portray a new generational divide in wealth creation from crypto. Younger investors who spotted the trend early on are able to earn vast fortunes and grow their existing investments from the surge in the prices of bitcoin, Ethereum, and other digital currencies.

The survey, based on data from American millionaires, noted that 83 percent of the US’s millionaires have none of their wealth in crypto, and only 1 in 10 keeps more than 10 percent of their wealth in crypto assets. The same cannot be said for Africa where despite the upsurge of cryptocurrency usage, concerns over regulations still hamper its growth.

ALSO READ: Kenya’s Slow Regulatory Response Hindering Cryptocurrency Growth

Nevertheless, a report released in September 2020 showed that cryptocurrency transfers reached a peak of 316 million Dollars in June. Three countries that accounted for most of the transactions were Nigeria, South Africa, and Kenya.

However, since there are currently no regulators for cryptocurrency in most African countries, and the severe risk for ordinary investors is high, millionaires in the continent are yet to convert some of their wealth to cryptocurrency. The concern is mainly because there is no escape route or way of getting the money back once the virtual currency crashes or there is some scam.

Meanwhile, younger investors who jumped on the trend early are reaping good profits as older investors still hold doubt.

“The younger investors jumped on it early when it was not as well known. These investors were more intellectually engaged with the idea even though it was new. Older investors and the boomers were largely saying ‘Is this legit?” said George Walper, president of Spectrem Group.

ALSO READ: 50,000 SMEs To Be Equipped With Much-Needed Digital Skills

The importance of crypto to young millionaires could shift the wealth management industry, as private banks, brokers, and wealth management firms continue to entertain the idea. With this trend, there is a likelihood that in the coming years, the key to attracting the next generation of wealthy clients could be more about crypto than traditional stocks, bonds, private equity, and hedge funds.

“We’re already seeing the industry responding,” Walper said. ’We see more and more providers offering access to crypto investing. It’s changing fast.”

The study further stated that the generational divide among millionaires is even starker when it comes to nonfungible tokens (NFT’s).

“Most millionaires say they don’t know what an NFT is, and more than a third say they are an “overhyped fad.” Yet two-thirds of millennial millionaires say NFTs “are the next big thing,” the survey read.

Nearly half of millennial millionaires surveyed own NFTs, and 40 percent say they don’t currently own an NFT but have “considered” it. That compares with 98 percent of baby boomer millionaires who say they don’t own any NFTs and aren’t considering it.

ALSO READ: Bitcoin’s Wild Price Moves Stem From Its Design — You’ll Need Strong Nerves To Trade

“NFTs have only recently started to be part of the media coverage,” Walper said. “So, the older generations are further behind on the understanding.”

Like cryptocurrencies, the NFT mania has taken over the world, particularly the younger generation. In Kenya, however, only a few individuals have set up NFTs and most people are still grappling to define what the term means.

NFTs are the latest cryptocurrency objects to go mainstream. They represent a subset of cryptocurrencies issued on blockchain technology. Unlike other cryptocurrencies such as Bitcoin or Ethereum, they are unique, and, therefore, “non-fungible”.

According to CNN, NFTs transform digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain.

A good example of an NFT is Jack Dorsey’s – CEO of Twitter – first-ever tweet which read “just setting up my twttr.” The Tweet sold for a whopping 2.9 million dollars in an auction.

Meanwhile, Kenya’s Marathoner, Eliud Kipchoge, became the first Kenyan professional athlete to launch his own set of NFTs on April 3^rd, 2021.

ALSO READ: Coinbase Is Unlike Any Market Debut Wall Street Has Ever Seen

His first two sets of NFTs included the digital representations of his career milestone on the Ethereum blockchain. They were digitally signed and officially approved by the marathoner himself and were backed by Momentible.io.

Momentible partnered with non-fungible tokens (NFTs) marketplace OpenSea to release the Eliud Kipchoge’s digital trading cards featuring his career highlights.

The auction for bidding Eliud Kipchoge’s NFTs ran for 5 days and the first set of the NFTs was sold for 14.8837 in Ethereum currency, which is approximately 3.3 million shillings. This set included the digital representation of Eliud Kipchoge’s 2019 moment when he became the first person on earth to run a full marathon under the magical 2-hour mark.

The second set of the NFTs was sold for 3.1 in Ethereum currency, equivalent to 690 thousand. This set of the NFT featured Eliud Kipchoge’s beautiful moment when crushed the old-world record on the marathon, one of the oldest competitions in sports history.

ALSO READ: $365 Billion Wiped Off Cryptocurrency Market By Musk

Apart from Eliud Kipchoge, Kenyan artists are also venturing into the market to sell their work. Kenyan-based award-winning photographer and filmmaker, Rich Allela, also auctioned one of the continent’s first crypto art collections using non-fungible tokens (NFTs).  His work, which was facilitated by Picha Images, a digital media company that launched one of the first crypto art NFTs on the continent. The auction was also hosted by OpenSea.

While cryptocurrencies and NFTs remain the most exciting aspect of blockchain technology, their real potential cuts across several issues plaguing the continent, including corruption. Africa might still be scratching the surface on what blockchain technology can achieve, but if governments could harness the benefits of traceability that the technology offers, it could be an avenue for creating accountability in all sectors.