eToro Survey: Over 70% of Millennials to Invest in Crypto if Offered by Institutions

Giant social trading platform, eToro has released the results of its market survey - which shows that over 40% of “millennial online traders” appear to have “less faith” in the performance of the traditional stock market - when compared to the digital asset market.

Significantly, 71% of millennials (born between 1981 and 1996) responding to eToro’s survey said they “would invest in crypto if it was offered by traditional financial institutions.” Other notable results from the trading firm’s poll included “half of online investors expressing interest in a crypto allocation in their 401k plans.” In the US, a 401(k) is a retirement savings plan that is “sponsored by an employer.” The plan “lets workers save and invest a piece of their paycheck before taxes are taken out.”

As explained in eToro’s press release, the company’s “nationwide survey of 1,000 online traders” revealed that 77% of Generation X respondents (those born between early-to-mid 1960s and early 1980s) “trust stock exchanges more” than cryptoasset-related investments or other alternative/emerging markets.

Losing Trust In Traditional Financial System

Commenting on the results of the survey, Guy Hirsch, eToro’s managing director, remarked:

We're seeing the beginning of a generational shift in trust from traditional stock exchanges to crypto exchanges. At the heart of this change are the asset classes themselves. Younger investors' experience with the stock market has seen a great deal of loss of trust, with the fall of Lehman Brothers because of irresponsible practices followed by the worst recession since the Great Depression.

Hirsch, a former director of innovation strategy at Samsung SDS, added that Americans also began to lose trust in the traditional financial system when they saw “their savings evaporate” - as banks received “free money through quantitative easing while their cost of living continued to rise.”

Going on to express confidence in the “immutability” feature of blockchains, Hirsch explained that distributed ledger technology (DLT)-based systems allow firms to conduct “real-time auditing” in a “cost-effective” manner. According to Hirsch, this is “why millennial and generation x” believe digital asset exchanges are “less likely to be subject to manipulation and less likely to be a place where bad actors get rewarded with taxpayer money.”

Other findings from eToro’s survey suggested that younger investors trusted crypto investments more than traditional stocks. Notably, eToro’s nationwide poll of US-based investors found that “even among millennials that [said they] don't trade crypto, one-third said they would trust crypto over the stock market.”

Over 90% Of Milllennial Traders Would Invest In Crypto If Offered By Large Institutions

Most, or 93%, of millennial crypto traders responding to eToro’s survey said “they would invest more money in [digital assets] if [they] were offered by traditional financial institutions such as TD Ameritrade, Fidelity, or Charles Schwab.” Approximately 70% of millennials participating in eToro’s poll that were not trading crypto said they would start if more institutions began providing the option to invest in digital assets.

Nearly 60% of investors from all age groups that took part in eToro’s survey said “they would invest more money in crypto if it were offered by a traditional financial institution.”

Joseph Lubin: Facebook's Libra Is a 'Centralized Wolf', Raises Privacy Issues

Ethereum co-founder Joseph Lubin recently published a blog post in which he claimed that Facebook’s cryptocurrency Libra is “a centralized wolf [disguised] in centralized sheep’s clothing.”

Lubin, a Canadian entrepreneur who’s also the founder of ConsenSys, a Brooklyn, New York-based Ethereum (ETH)-focused development studio, acknowledged that the Calibra project’s goal to send money quickly and cheaply should be a key design consideration of modern internet-based currencies.

Can Facebook Be Trusted?

However, the Princeton University graduate pointed out that most people would not be able to place enough trust in Facebook’s management - as he wrote:

Don’t I need to trust Facebook and other intermediaries to trust Libra?

Interestingly, Lubin also noted that the name of the social media giant, Facebook, is “hardly mentioned” in the Libra crypto project’s whitepaper or its technical documentation. Moreover, Lubin believes that Facebook’s new cryptocurrency project is “not eliminating” the need for “subjective” trust, which most decentralized currencies do. Instead, he thinks the social media firm’s crypto is “imploring us to trust in Libra.”

Merchants Must Trust the “Initial” Libra Network Will Operate “Responsibly”

Going on to allege that Facebook’s cryptocurrency wallet Calibra will “seek trust” as using it will require users to provide their government-issued IDs for verification, Lubin also pointed out:

It will need merchants to trust that their initial network will responsibly run nodes to validate transactions on the system.

Younger Users Prefer Decentralized Payment Protocols

The former VP of Technology at Goldman Sachs further mentioned that the younger generation prefers “payment systems built on truly decentralized protocols” - rather than having to verify their identify and share other personally identifiable information on centralized platforms like Facebook.

Concerns Regarding Users’ Financial Privacy

The ConsenSys founder also noted that Facebook, as a company, makes a lot of money off personal user data. Should the Libra project move further, as it is currently facing various regulatory challenges, then some of Lubin’s concerns might seem reasonable:

What happens when you wrap your personal finances up in this, too? That our digital identity will never merge with Libra’s financial data is a hard perception to shake. It is almost a given, even if they have the best of intentions—“accidents” and incursions happen when relying on centralized architectures.

Lubin went on to reveal that the developers at ConsenSys had already begun to review the source code shared by the Libra project’s creators. He claims that the technical documentation and other details released by Libra’s founders is quite similar in some ways to Ethereum, the world’s largest smart contract platform.

While admitting that Facebook’s project will (most likely) be “well executed, technically”, Lubin remarked:

As of today, Libra has made a bold promise, and it’s one that Facebook needs to keep. Until then, Libra is like a centralized wolf in a decentralized sheep’s clothing.