How Gen Z is hooked on cryptocurrency and NFTs

Young people have always been attracted to invest in risky assets because of the lure of making a quick buck. Digital assets such as cryptocurrencies and NFTs appeal to Generation Z because of their volatility. There is little investor protection because they are unregulated.

"All my friends were talking about it so one day I just decided to jump in and see if I can make some money."

He only needed his phone and assets to trade.

The age group born between the mid- 1990s to early-2000s is called Generation Z. They grew up playing games and meeting friends online, so the transition is natural.

Cryptocurrencies are digital currencies while a non-fungible token is a way of owning an original digital image.

Over a year ago, he bought $1,000 worth of Bitcoin and immediately made 10% of it. He decided to increase his holdings. The price fell after that.

I did the complete opposite of buying low and selling high. He says that he lets his emotions get the better of him.

He lost a thousand dollars before he could pull his money out and re-strategise.

The loss was much bigger for another trader. He lost half a million dollars the year after making six figures.

He says he lost everything because he thought he was the king of trading.

He had a few hundred dollars left in his bank account.

I almost went into depression. I had suicidal thoughts.

He is worried about the boom in trading among young people.

A lot of them will lose money at the end of the day.

Young traders seem to ignore cautionary tales of people losing a lot of money.

For many, the first taste of digital assets are through play-to-earn games, which reward players with NFTs and cryptocurrencies that can be used within the game itself, or traded for cash.

A trader in Malaysia who goes by the name of YellowPanther says that every kid wants to make money playing games.

He quit his job as a marketing executive to trade full time after he started trading NFTs.

The day job took a long time and the pay was low. He says he took the leap of faith after seeing a big opportunity in the NFT space.

Resh Chandran is a 29-year-old who offers training in conventional stocks, cryptocurrencies and NFT trading in Singapore.

Mr Chandran introduces investors to mostly Filipino gaming players who play on their behalf for a fee in one of the most popular play-to-earn games.

He warns that the space is a wild wild west.

The growing trend of young people trading cryptocurrencies and NFTs has been accelerated by the Pandemic.

There was an extreme level of volatility in the marketplace, so when you have it, you also have opportunities in the market, according to a professor of finance.

Young people were at home and it was almost a trading game. The factors created a perfect condition for this to happen.

Advice is readily available on platforms such as YouTube and Twitter for young traders.

Brian Jung has one million subscribers on his channel, but he is known to talk more cautiously about the risks.

Image source, Brian Jung

I have to make sure that I am careful about what I say to my audience because the last thing I want is for people to get hurt from these types of videos.

Brian believes his background affects how he invests and talks about money.

He says that his family always struggled financially so he always has a frugal mindset.

My parents still work at the US Post Office and my dad works in a warehouse, so one hour of their time is still equivalent to dollar value. I see what that is worth regardless of how much I make.

Gaining financial freedom was one of the reasons why 22-year-old Jowella Lim decided to trade in thecryptocurrencies.

Jowella enjoys being at the forefront of this new technology, as well as the opportunities to make money.

She believes that governments will help legitimise the industry by regulating it.

Regulators have to eventually compromise and realise that this is a tech they cannot ignore, especially when it is penetrating this society.

Financial losses are not the only danger of addiction.

Mr Chamdran says people get sucked into the market because it never sleeps.

Andy Leach, an addiction therapist in Singapore, says he has seen a jump in young male clients getting addicted to the thrill of trading NFTs.

He says that you can watch the process of Bitcoins going up and down on your phone 24/7.

After studying the market more closely, both Paxton and Kelvin are back trading.

I asked if he thought he was addicted.