Why do young people prefer Digital Money?

“Why do young people prefer Digital Money?” This can be expressed more straightforwardly as: “Why do young people like Cryptocurrency Trading?” The term “Cryptocurrency Trading” is not seen as a positive phrase by many. It often implies “speculation,” “aggressiveness,” “high risk,” and an unrealistic desire to get rich quickly. However, the young people's preference for Crypto Assets seems to be unstoppable. According to the latest report released by Crypto.com: The number of global coin holders was 106 million in January 2021, and it increased to 221 million by August 2021. It's worth noting that in May 2020, there were only 66 million Crypto Asset holders. The popularity of Digital Money is evident as it doubles every six months.

01 Why do young people prefer Digital Money?

Why is this the case? The older generation always likes to advise the young people to take it slow, but little do they know that by following their path, young people may not be able to achieve the same returns no matter how hard they work.

Take the most realistic example. In the past 20 years, real estate in first-tier cities in China has surged. Taking Shenzhen as an example: the average property price was 5,500 yuan in 2001; now (in 2021), the average property price in Shenzhen is 60,000 yuan. It seems that in just 20 years, it has increased tenfold, which doesn’t seem remarkable. But in reality, real estate investment is not simply about buying a house and waiting for appreciation. For example, in 2015, real estate in Shenzhen had a price increase of 40%; that is, a house valued at 2 million yuan increased to 2.8 million yuan in a year. Buying a house usually comes with leverage, typically requiring only a 30% down payment. So for a house worth 2 million yuan, the buyer only pays 600,000 yuan in principal. Adding the total input from the monthly mortgage payment for a year, it is less than 700,000 yuan, while the market value has increased by 800,000 yuan in a year. That means it’s not just a 40% gain, but rather 114%. Is that all? Not at all.

The relaxed credit policy in real estate allows homebuyers who benefit from rising housing prices to again finance with the bank using their property. They can borrow part of the down payment from the appreciation of the house and continue to buy more properties. For instance, if a house has appreciated to 2.8 million yuan, the loan is only 1.4 million yuan. Thus, through various means, they can obtain an additional loan of 1 million yuan from the bank to continue buying a property valued at 3 million yuan. Moreover, in 2016, real estate in Shenzhen continued to rise by 20%.

By this time, the person who originally had a principal of 600,000 yuan now has real estate worth 6.8 million yuan. Even if we simply and roughly subtract the first mortgage loan of 1.4 million yuan and the debt of 3 million yuan for the second property, they still made a profit of 2.4 million yuan. Compared to the initial principal of 600,000 yuan, it has quadrupled in 2 years. Doesn't it sound exaggerated? But in reality, this process has been played out by countless property investors in China's first-tier cities, which have been on an upward trend for the past 20 years. The significant rise in 2020 doubled the value of these properties. Where's the promised relationship between returns and risks?

Now, when it comes to buying a house, let alone the returns, young people might not even be able to touch the tiles of properties in first-tier cities because the threshold is too high. Even if prices rise, it is just a carnival for big capital.

Not only China's real estate, but also the US stock market: over the past 100 years, representatives of old money have made a fortune in the US stock market, and a Buffett has emerged in the market. Is it possible to see another Buffett in the 21st century? Almost impossible. The so-called winning track and rules are essentially just the “dividend of the times.”

So why do young people prefer digital money? A straightforward viewpoint is that young people are flipping the table and no longer adhering to old money. Is digital money the era dividend of this generation of young people?

02 Does digital money belong to the era dividend of this generation of young people?

Data presentation is the most authentic and reliable. According to AssetDash's data, in 2021, the global asset market capitalization rankings showed that the cryptocurrency Bitcoin surged to 7th place; surpassing the new energy vehicle giant Tesla and ousting the Tencent empire, which took over 20 years to build. And Bitcoin has only been around for 12 years since its real inception.

Launched in 2015, Ethereum has already entered the top 20 of the global market value rankings, with a market cap of over 411 billion dollars, surpassing the global retail giant Walmart in just 6 years.

Not only the market capitalization, but someone has also calculated the annual investment return rates of major global asset classes over the past 10 years:

Bitcoin increased 55 times in just one year in 2013, and more than 13 times in 2017, with a staggering growth rate. Not only was the annual increase high, but over a period of 10 years: in 8 out of those 10 years, the investment return rate of Bitcoin outperformed other assets, leading globally. It is only in the years of “no losses” and the drawdown rate that Bitcoin slightly lagged behind the US large-cap stock index and the NASDAQ-100 index. Meanwhile, gold, which is claimed to be a global safe-haven asset, has its return rate almost drowned in this table.

If this still can't convince you, let's take a look at the compound annual growth rate. The highest market capitalization in the global stock market belongs to Apple Inc., which can be considered the best representative of listed companies. What is its compound annual growth rate? Apple went public on December 12, 1980, with an initial market capitalization of $1.778 billion. As of the writing date (September 9, 2021), its market capitalization reached $2.5652 trillion. The compound annual growth rate over 40 years is 19.94%. Similarly, the legendary investor Warren Buffett, who has reaped the benefits of the U.S. national power and stock market growth, has an annual compound growth rate of only 20%. This means that even in the traditional mainstream investment market, investing in the world's top listed companies with the highest investment levels, a 20% annual compound growth rate is the ceiling.

In the field of Crypto Assets, the market leader Bitcoin has a compound annual growth rate of over 200% over the past 12 years, which is more than 10 times that of investing in publicly listed companies.

03 Digital Money is obviously more beneficial than traditional mainstream investment markets.

So why do young people prefer digital money? Data shows it very clearly: digital money obviously has more dividends than traditional mainstream investment markets. **$HIGH **$LIGHT