Cryptocurrencies are no longer a mysterious object, to be doubted, for young Italians.
1.4 million of our fellow countrymen, either as individuals or in the form of companies, hold two billion euros in cryptocurrencies. As we wrote a few days ago, the number of investors in these assets has doubled, in the past two years. The clientele approaching crypto is predominantly young. 64% are in fact aged between 18 and 39.
Young people are less afraid of the volatility and risks associated with this type of asset
The reason why young people would be more attracted than older investors is probably their less fear of the future, at least from a financial point of view.
These days, we have before our eyes an unmistakable example of volatility. The queen of cryptocurrencies, Bitcoin, has been on a rollercoaster ride for a few weeks now. It has lost up to 50% from its highs and, given the high unpredictability of the moment, forecasts for the short term are being cautious. In the medium to long term, however, there are those who see the light.
An optimistic view
According to Gianluca Sommariva, ceo of the Genovese startup Hodli, cryptocurrency asset manager:
"In the short term, the cryptocurrency market will continue to be influenced by global macroeconomic factors and phases of volatility. In the medium to long term, the combination of structural deleveraging, greater regulatory clarity and dialogue with the institutional world could foster a more sustainable development of the entire crypto ecosystem. The current phase reflects a market that is maturing and tends to curb speculative excesses, with a greater focus on quality and a structured dialogue with the regulated world."
In these words lies the reason why many young people choose to invest in cryptocurrencies despite the momentum. Expecting upturns at the end of this interlocutory phase between traditional and decentralised finance, they have no qualms about investing. The most optimistic current of thought on the future of DeFi argues that, once the MiCA regulation is in place, much of this extreme volatility will recede and the new assets will more closely resemble traditional ones.
Young people, numbers, and cryptocurrencies
In all likelihood, young people also invest because they fear the possible quantum computer revolution less. Because beyond the risk of devaluation, which an investor must be willing to take on, there is a more insidious one on the horizon.
The question that has been mounting throughout the financial world in recent months concerns the possible future of cryptocurrencies. Will they be able to evolve and increase their security in order not to be overwhelmed by the advent of quantum computers? Indeed, there are those who believe that next-generation hardware, the power ceiling of which we do not yet know, may be able to breach the secret codes that protect them, allowing attackers to access safes and raid them.
This potential destructive force is what makes quantum computing a possible threat. Blockchains use cryptographic algorithms to protect transactions. It is suspected that a sufficiently powerful quantum computer could decipher them in seconds. So, again, it is legitimate to ask whether it makes sense, in this day and age, to invest in assets that could be stolen.
The optimist, however, is unlikely to be frightened off by this possibility. Firstly because he does not know whether quantum technology will really reach such potential. Secondly, because it is not clear to anyone when these machines will be on our desks, and thirdly, because if quantum computers really do prove capable of breaching cryptography and compromising the security of cryptocurrencies, it is not only investors who would be at risk.
