A new report suggests that cryptocurrency and digital assets are becoming something of a staple in the lives of the upcoming generation, with potentially seismic implications for the world of finance in the future. The Holiday 2018 report released by investment bank and asset management company Piper Jaffray reveals that, for the first time ever, American teenagers polled in 2018 indicated that they preferred cryptocurrency and V-bucks — the virtual currency used in the popular video game Fortnite –to cash, gift cards, and gas money.
The preference expressed by teenagers for cryptocurrency and V-bucks over fiat and gift cards is especially significant not just because it signals an impending generational shift in adoption of digital asset frameworks, but also because it could indicate that cryptocurrencies as they currently exist are increasingly perceived as a medium of exchange, and not just a speculative investment. If teenagers now prefer to use cryptocurrencies and other digital assets in lieu of cash and gift cards, that means that the volume of crypto assets in everyday circulation is only set to grow.
Fortnite’s V-bucks payment system also represents a key incursion by digital assets into a space once dominated by fiat. The wildly popular video game, which has grossed more than $300 million on the iOS platform alone since its Apple launch in March, is effectively introducing a new generation of users to a new paradigm where they can carry out purchases and trades across a vast digital ecosystem using a medium of exchange that is only loosely tied to fiat.
Currently, the fiat to V-bucks exchange rate stands at $9.99 to 1,000 V-bucks, and while users can use the token to pay for in-game upgrades and outfits to their Fortnite characters, all refunds are made in V-bucks instead of fiat, which effectively compels users to engage further with Fortnite’s financial ecosystem. The data presented by Piper Jaffray indicates that this approach is working, as it is attracting rather than driving away teenagers and encroaching on turf once dominated exclusively by fiat.
American teenagers may be big fans of crypto, but the generation of Americans born before 1964, popularly known as “baby boomers,” are decidedly not fans of cryptocurrency and blockchain technology. In October, CCN.com reported that an article published on the official AARP website described bitcoin as “a bunch of computer code that a bunch of criminals, idealists and speculators agree is worth ‘real’ money.”
Boomers, who typically have about $24,000 in savings — about 10 times as much as millennials — could be a major source of crypto investment in the short term, but a recent Circle survey shows that less than 2.5 percent of this demographic have expressed interest in investing in crypto assets.
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Last modified: May 20, 2020 2:22 PM UTC