Interest in Bitcoin and cryptocurrency is at all-time highs
But is anyone paying attention to the risks? Not young adults.
Photo by Thought Catalog
It seems like everyone is talking about Bitcoin these days. Maybe that’s because Bitcoin, the first cryptocurrency, has been hitting record highs, nearing $100,000 as of November 2024, while doubling in value throughout the year. Launched in 2009, Bitcoin introduced a revolutionary way to conduct transactions without relying on banks or governments. Yet, its rise has also highlighted a critical issue: a lack of awareness about its risks.
How does Bitcoin work?
Bitcoin functions as a digital currency independent of central banks. Each Bitcoin can be divided into smaller units, called Satoshis, making it accessible even for small-scale investors. It’s now accepted for a wide range of purchases, from art to technology, and even luxury items.
However, cryptocurrency’s decentralized nature means there’s no safety net for investors. Transactions are irreversible, and the market is rife with volatility and susceptibility to fraud, making it a high-risk investment option.
Popularity among young adults
Cryptocurrency is especially popular with younger generations. In the U.S., 40% of adults now own crypto, up from 30% in 2023, with the largest age group of owners being 25 to 34 years old. Similarly, in Canada, 20- to 24-year-olds are the most active crypto investors. Many young investors are heavily influenced by social media, where platforms like TikTok and YouTube are their primary sources of financial information.
Social media as the new financial advisor
Social media has become a go-to for financial advice. According to Yahoo Finance, Gen Z turns to platforms like TikTok for tips on spending and Reddit for investment ideas. But while these sources might be engaging, they often lack credibility and accountability. The rise of unverified “experts” and influencers can lead to misinformation and, in some cases, disastrous financial decisions.
Warren Buffet, one of the smartest investors and richest people in the world has no faith in crypto investing. At Berkshire Hathaway’s annual meeting in 2022, Buffet famously said, “I wouldn’t pay $25 for all the Bitcoin in the world”
Gen Z investors: High risk, high FOMO
According to FINRA, Gen Z investors are the most likely to take above-average financial risks. Nearly half admit to making investments driven by a fear of missing out (FOMO). While this risk tolerance can sometimes pay off, it often leads to poor financial outcomes, particularly for those without a solid understanding of market dynamics.
The role of financial literacy
This brings us to the crux of the issue: financial literacy. In North America, financial literacy rates remain low, and this is especially concerning when paired with the high stakes of crypto investing. Without a clear understanding of the risks, young investors are leaping into the market unprepared. This is where we think credit unions can step in.
Why credit unions should lead
Credit unions hold a unique position in North America as trusted community financial institutions. They combine local reach with a fiduciary duty to serve their members’ best interests. With the right programs, credit unions can educate their members about financial risks and opportunities, including the complex world of cryptocurrency.
And this is where we come in. Currency Marketing offers a range of professionally curated financial literacy topics within a program called It’s a Money Thing—designed to both engage and inform. From understanding investment vehicles to managing debt and navigating income loss, these topics can equip members with the tools they need to make informed decisions. To date, we’ve partnered with over 200 credit unions to bring these valuable insights to members and communities.
Here are just six of the 48 professionally developed learning topics from our program that can help those thinking of taking a step into crypto investing, covering topics such as:
Interested in learning more? Book a demo and I'd be happy to show you how our program works.
Tim McAlpine is the Founder & CEO of Currency Marketing. He is best known for developing the It's a Money Thing Financial Education Program that credit unions from around North America are using to connect with new young adult members. He is also a driving force behind CUES Emerge, an emerging leader program that combines online learning, peer collaboration and an exciting competition component.
