Gen Y-Not? Older Millennials Have Highest Appetite for Risk in Trading

Three Times More Likely to Have a High-Appetite for Risk Than Over 55s

NEW YORK, Feb. 13, 2023 /PRNewswire/ -- Older Millennials aged 35-44 see themselves as the risk takers of crypto trading, according to a survey conducted in November 2022 into the attitudes and habits of over 2,000 US traders. 22% said they had a high appetite for risk, nearly three times the rate of traders aged 55 and older (8%).

Greater volatility in the financial markets means opportunities for big gains but also higher risks. Cryptocurrencies are highly volatile and often move faster than traditional currencies.

This attitude towards risk as a whole is also reflected in the motivations of Older Millennials to trade crypto. 27% of the age group said that they trade crypto for the possibility to make quick gains to improve their current lifestyles. This is in stark contrast to the 43% of traders aged 55+ who see it as a possibility to boost their savings and retirement funds.

The findings come as part of the State of Crypto report released by OANDA, a global leader in online multi-asset trading services. Jessica Beckstead, Managing Director of North America & US CEO at OANDA believes that: "Digital assets can help traders diversify from traditional financial assets such as fiat currencies or equities. Unlike fiat money, most cryptocurrencies don't see their value diluted through inflation, but they remain highly speculative and unpredictable.

There's no doubt that crypto can be volatile, but for some traders, that volatility provides a thrill - more volatility can mean significant gains, but also higher risks. Given this volatility, traders may want to consider using features such as stop losses to protect their profits and manage their risk."

While the risk appetite of traders is linked to their level of tolerance for handling the impact of volatility in a rational manner, there are other factors at play.

The generational divide uncovered in this survey, appears to highlight a wider link between trading behaviour and socio-cultural factors affecting traders. When asked about optimism on trading returns in 2023, for example, divorced people were among the most pessimistic – with only 65% optimistic versus 82% of married people.

The motivation of traders when investing in crypto varied greatly for those with children and without as well. 21% of respondents with dependents said they had a high appetite for risk compared to just 11% of those without children. Posing the question: are parents keener to take the risk to get the chance to secure the future of their families?

Professor Brendan Burchell, Professor of Social Sciences at the University of Cambridge, UK, commented on the impact of the data:

"This new US data is consistent with existing knowledge on crypto-traders. For instance, the different routes for entering crypto-trading, be it sports gambling for younger traders or through more conventional investing of savings for older investors. Thus, it advances our understanding. It is impossible to comprehend the impact of crypto-trading on individual traders without understanding those differences.

"This survey conducted by OANDA is therefore invaluable in starting to understand the multifaceted differences between types of traders and their reasons for investing, their level of market optimism and their reactions to large variations in prices. After a dearth of good, empirical evidence on the behavior of traders in cryptocurrencies, we can now begin to delve into the fundamental differences between their behavior compared to the psychology of trading traditional shares. "

For full access to the report, please visit OANDA: State of Crypto. Jessica Beckstead is available for interviews and further comment. Please direct requests to [email protected] or [email protected] 

For more information on trading cryptocurrencies with OANDA visit: https://www.oanda.com/us-en/trading/cryptocurrencies/

Note to editors: 

About OANDA

Founded in 1996, OANDA was the first company to share exchange rate data free of charge on the Internet, launching an FX trading platform that helped pioneer the development of web-based currency trading five years later. Today, the OANDA group, which includes OANDA Corporation and other subsidiaries of OANDA Global Corporation, provides online multi-asset trading, currency data and analytics to retail and corporate clients around the globe, demonstrating an unrivalled expertise in foreign exchange. With regulated entities in nine of the world's most active financial markets, OANDA remains dedicated to transforming how the world interacts with trading, enabling clients to trade global market indices, commodities, treasuries, precious metals and currencies on one of the fastest trading platforms in the market.

DISCLOSURES

OANDA CORPORATION IS A MEMBER OF NFA AND IS SUBJECT TO NFA'S REGULATORY OVERSIGHT AND EXAMINATIONS. HOWEVER, YOU SHOULD BE AWARE THAT NFA DOES NOT HAVE REGULATORY OVERSIGHT AUTHORITY OVER UNDERLYING OR SPOT VIRTUAL CURRENCY PRODUCTS OR TRANSACTIONS OR VIRTUAL CURRENCY EXCHANGES, CUSTODIANS OR MARKETS.

SOURCE OANDA