Cryptocurrency is such a top asset for young adults, many expect it to finance their golden years.
A survey of 4,000 investors across the country from Investopedia found that 38% of millennials own some form of cryptocurrency, and 28% of millennials expect crypto to help fund their retirement, according to Investopedia CEO Caleb Silver told Yahoo Finance Live (video above).
"That shocked me a little bit just because the expectations are so big,” Silver said.
But Silver noted while many millennials embrace cryptocurrency, they also don't know much about how the digital currency works.
“Most of the people we surveyed — and I don't care if it was Gen Z, millennials, or boomers — don't know very much about cryptocurrency, how it works, how to trade in it, or what it's backed by, and it's not backed by much," Silver said. "So a lot of people have some high hopes for an asset that's not proven, that's not backed by gold, not backed by the dollar, and not correlated with other assets. So that's a very big issue."
The Investopedia survey found that 39% of young adults get financial advice from YouTube and 25% from TikTok. Silver noted that many millennials are getting their advice from social media, but should exercise caution before making investment decisions.
“There's plenty of good content out there," Silver said. "But there's plenty of not-so-good content out there either."
Silver said that even though the survey shows young investors believe there is a bitcoin bubble, they still want to invest in crypto. Silver noted that many people have a fear of missing out, so they buy crypto whether it’s a good investment or not.
“Our animal spirits tell us that we want to be involved, and we want to keep buying no matter what's going on, and we want to make sure we don't miss out on the next big stock or the next big cryptocurrency that's going to take off," Silver said. "At the same time, we always feel like there's a bubble and things are overpriced."
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Silver stressed the need for investors to learn about responsible financial planning and gain financial literacy to build their portfolios.
“It's got to start with education, not trying to pick the hot next Dogecoin or the next stock that's going to go to the moon per se, but building that balanced portfolio, paying attention to fundamentals, being balanced across what you purchase and what you put into your portfolio," Silver said. "And then your plan by age. And that's where responsible financial planning comes in. I don't care if you're 21 or 61, you still need to know the fundamentals and the basics, so you don't knock yourself off the path.”
Ella Vincent is the personal finance reporter for Yahoo Money. Follow her on Twitter at @bookgirlchicago.