How Gen Z is hooked on cryptocurrency and NFTs


Paxton See Tow, 20, started trading cryptocurrencies due to the hype around digital currencies

The lure of making a quick buck has always enticed young people to invest in risky assets. For Generation Z, what appeals is the volatility, and decentralized nature, of digital assets like cryptocurrencies and NFTs. But they are not regulated, which means there is little protection for investors.

“All my friends talked about [cryptocurrency] so one day I decided why not go in and see if I could make some money,” says 20-year-old Paxton See Tow.

All you needed was your phone and trading thousands of dollars worth of 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 Singapore dollars ($743; £739) worth of Bitcoin, one of the most popular cryptocurrencies, giving him an immediate 10% profit. He decided to quadruple his portfolio. But then the price fell.

“There’s always the saying ‘buy low, sell high,’ but I did the opposite. I let my emotions get the best of me,” he says.

He had lost a thousand dollars, plus all the money he had invested, before he could get his money out and restrategize.

For another older trader, Kelvin Kong, the loss was much greater. After earning six figures in 2017, he lost more than half a million dollars the following year.

Kelvin Kong

Kelvin Kong Lost Half a Million Dollars in Crypto in 2018

“I lost everything,” he says. “I thought I was the king of the trade and my head got really big so I thought nothing could bring me down and I just kept buying,” he says.

In the end, he only had a few hundred dollars left in his bank account.

“I think I almost went into depression. I had suicidal thoughts.”

He is concerned about the rise of cryptocurrency and NFT trading among young people.

“Many of them will lose money at the end of the day,” he adds.

Gamification of commerce

But warning stories of people losing big money don’t seem to deter young traders.

For many, the first taste of digital assets is through “play to win games” that reward players with NFTs and cryptocurrencies that can then be used within the game itself or exchanged for cash.

“All kids want to make money playing games,” says a 23-year-old trader from Malaysia who goes by the name YellowPanther. “That is the dream of my generation.”

A month after he started trading with NFT last August, he decided to quit his job as a marketing executive to trade with them full time.

“The day job was very time consuming, eight to nine hours a day, and the pay was pretty low. I saw a great opportunity in the [NFT] space and took the leap of faith,” he says.

YellowPanther now works with Resh Chandran, 29, who offers conventional stock, crypto and NFT trading training in Singapore.

Resh in his office

Resh Chandran describes himself as a financial educator

Using Axie Infinity, one of the most popular “play to win” games, Mr. Chandran introduces investors to mostly Filipino players who play on his behalf for a fee.

But he warns that space is a “wild 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 opportunity in the market,” says Lily Fang, a finance professor at INSEAD business school.

“Young people were at home and it’s almost a gamification of commerce. All of these factors created a perfect condition for this to take off.”

financial influencers

For many young aspiring traders, tips are available on platforms like YouTube, Twitter, and Reddit.

Brian Jung, 23, boasts a million followers on YouTube, but compared to other crypto influencers, he is known to speak more cautiously about risks.

“I really have to make sure I’m careful what I say to my audience because the last thing I want is for people to get hurt by these kinds of videos,” he tells the BBC.

Brian’s family immigrated from South Korea to the US and he believes his background affects the way he invests and talks about money.

“Our family 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 an hour of his time is still worth the dollar. I see what it’s worth, regardless of how much income I’m making.” properly now.”

Gaining financial freedom is also what attracted 22-year-old Jowella Lim, a rare trader, to the world of cryptocurrencies.

But in addition to the opportunities to earn money, Jowella enjoys being at the forefront of this new technology.

Jowella in orchard

Jowella Lim, 22, believes regulation will help legitimize cryptocurrencies

As governments around the world look to regulate the industry, she believes they will help legitimize cryptocurrencies and NFTs.

“Regulators eventually have to compromise and realize that this is a technology they can’t ignore, especially when it’s constantly penetrating this society,” he adds.

Addiction or passion?

Aside from financial losses, another big danger is addiction.

“The cryptocurrency market never sleeps, so people literally get sucked into it,” says Mr. Chamdran.

Andy Leach, an addiction therapist in Singapore, says he has seen a rise in young clients, particularly men, becoming addicted to the thrill of trading cryptocurrencies and NFTs.

“You have the ability to watch Bitcoin go up and down and basically this process, this roller coaster ride, the ups and downs, is available on your phone 24/7,” he says.

Despite having lost money in the cryptocurrency market in the past, both Paxton and Kelvin have returned to trading after taking a closer look.

I asked Kelvin if he thinks he might be addicted. “You can put it that way,” he smiles. “But I would call it passion.”