REGARDED by some as risky, cryptocurrency are seducing Millennials and the Gen-Z demographic population set, a top executive of an insurer told the BusinessMirror.
Jean Olivia De Castro, head of the Fixed Income of Manulife Investment Management and Trust Corp., told the BusinessMirror that 60 percent of the respondents in their latest study said they are engaged in investing in cryptocurrency.
The report is titled, “Know Your Ys and Zs: A closer look at the financial and mental well-being of Filipino Millennials and Generation Z in the time of COVID-19.” It was based on a survey of 500 respondents across the Philippines between April and May this year.
De Castro said they conducted the poll to further understand the attitudes, behaviors and habits of younger generations toward finance and personal well-being, as well as actions they are taking to achieve financial independence and improve mental wellness.
De Castro said Millennials—those born between 1981 and 1996—and the Gen Z—those who succeeded Millennials—also prioritize getting an insurance. She said this bodes well for companies like Manulife as their market base expands.
Likewise, buying insurance also enables the youth to avail of the products at more affordable rates, De Castro added.
“It is also noteworthy for us that both generations are also curious about cryptocurrency,” she told the BusinessMirror adding that cryptocurrency is the third among the investment products these demographic sets “are most interested in.”
De Castro noted that more than 40 percent of Filipino Millennials also own pension and retirement products while 29 percent own Unit Investment Trust Funds (UITFs).
Being digital natives, de Castro said it is not surprising that a big number of Millennials and Gen Z are comfortable investing in cryptocurrency. They grew up with the Internet as a constant companion and their reliance on their handheld devices was heightened by lockdown measures, she added.
“Being a digital product, it [cryptocurrency] is really right up their alley,” De Castro told the BusinessMirror.
However, she said financial advisers also caution Millennials and Gen Z “to take more time to understand the risk that comes with it as [cryptocurrency] is subject to more volatility compared to traditional investment funds.”
De Castro said the firm urges investors in cryptocurrency to speak with a financial advisor who can guide them to understand and guide them on the unpredictability of crypto.
“It is an unregulated type of currency whose value is more influenced by speculation, leading to more volatility. It’s really important that they educate themselves in order to protect themselves from the whims of the market,” she told the BusinessMirror.
De Castro added the youth factor is one of the reasons why both Millennials and Gen Z stay invested in cryptocurrency.
Time is on their side, she said, adding that members of these demographic sets can afford to lose a little money on their younger days. And they still can have 20 years, 30 years and 40 years down the road to be able to recover, De Castro added.
“It’s opposed to if you’re nearing retirement age and that’s when you get hit with a loss; and it’s harder to recover from that,” she told the BusinessMirror. “That’s why, typically, the risk profile of the younger ones is generally more aggressive; and they do get to these riskier assets.”