“All my friends were talking about [criptomoeda], so one day I decided why not go in and see if I can make some money,” says 20-year-old Paxton See Tow. All he needed was his phone and trading thousands of dollars in assets was just a click away. Generation Z – also known as Zoomers – is the age group born between the mid-1990s and early 2000s.
They grew up online, playing games and meeting friends virtually, so the transition is natural. Cryptocurrencies are digital currencies, while a “non-fungible token” (NFT) is a way to own an original digital image, touted as the digital answer to collectibles.
Just over a year ago, Paxton bought $1,000 worth of Bitcoin – one of the most popular cryptocurrencies – which gave him a 10% profit right away. He decided to quadruple his portfolio. But then the price dropped.
“There’s always the saying ‘buy low, sell high’, but I did the opposite. I let my emotions take over me,” he says. He had lost a thousand dollars, on top of all the money he had invested, before he could withdraw his money and restrategize.
For another older trader, Kelvin Kong, the loss was much greater. After making six figures in 2017, he lost over half a million dollars the following year.
“I thought I was the king of trading and my head got too big, so I thought nothing could bring me down and kept buying,” he says. In the end, he only had a few hundred dollars in his bank account.
“I think I almost went into depression. I had suicidal thoughts.” The boom in cryptocurrency and NFT trading among young people worries him. “Many of them are going to lose money at the end of the day,” he adds.
trading gamification
But the stories of people losing large amounts of money don’t seem to deter young traders. For many, the first taste of digital assets is through “play-to-win games,” which reward players with NFTs and cryptocurrencies that can be used in-game or traded for cash.
“Every kid wants to make money playing games,” says a 23-year-old Malaysian trader who goes by the name YellowPanther. “This is the dream of my generation.” A month after he started trading NFTs last August, he decided to quit his job as a marketing executive to trade them full-time.
“Daily work took a lot of time – eight to nine hours a day – and the pay was quite low. I saw a great opportunity in space [NFT] and I took a leap of faith,” he says. YellowPanther now works with 29-year-old Resh Chandran, who offers training in conventional stocks, cryptocurrencies and NFT trading in Singapore.
Using Axie Infinity, one of the most popular “games to win”, Chandran introduces investors to primarily Filipino players who play on their behalf for a fee. But he warns that space is a “wild west”. The pandemic has only accelerated this growing trend of young people trading cryptocurrencies and NFTs.
“There was an extreme level of volatility in the market, so when you have volatility, you also have opportunities in the market,” says Lily Fang, professor of finance at the INSEAD business school. “Young people were at home and it’s almost a gamification of negotiation. All these factors created a perfect condition for this to take off.”
financial influencers
For many young traders, advice is readily available on platforms like YouTube, Twitter and Reddit. Brian Jung, 23, has a million followers on YouTube, but compared to other crypto influencers, he is known to speak more cautiously about the risks.
“I really have to be careful what I say to my audience, because the last thing I want is for people to get hurt by these types of videos,” he told the BBC.
Brian’s family emigrated to the United States from South Korea and he believes his past affects the way he invests and talks about money.
“Our family has always struggled financially, so I always have this frugal mindset,” he says. “My mom still works at the US Post Office and my dad works in a warehouse, so I know that an hour of their time is still equivalent to dollar value. I see what it’s worth regardless of the income I’m making right now.”
Gaining financial freedom is also what attracted 22-year-old Jowella Lim – a rare trader – to the world of cryptocurrencies. But aside from the money-making opportunities, Jowella enjoys being at the forefront of this new technology.
Gen Z addiction or passion?
In addition to financial losses, another great danger is addiction. “The cryptocurrency market never sleeps, so people literally get sucked into it,” says Chandran.
Andy Leach of Visions by Promises addiction clinic in Singapore says he has seen a leap in young clients – particularly male ones – becoming addicted to the thrill of trading cryptocurrencies and NFTs.
“You have the ability to watch Bitcoin go up and down and basically that process, that roller coaster ride, the ups and downs, is available on your phone 24/7,” he says.
Despite losing money on the cryptocurrency market in the past, Paxton and Kelvin returned to trading after studying it more closely. I asked Kelvin if he thinks he might be addicted. “You can put it that way,” he smiles. “But I would call it passion.”
Translated matter from BBC – Mariko Oi.
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