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What should millennials invest in — stocks or cryptocurrency?

What should millennials invest in  — stocks or cryptocurrency? (PHOTO: Getty Commercial)
What should millennials invest in — stocks or cryptocurrency? (PHOTO: Getty Commercial) (hobo_018 via Getty Images)

SINGAPORE — Stocks may be the most well-known and simplest type of investment, but cryptocurrency seems to be the next big thing in recent years too. What then, should millennials choose to invest in — stocks or cryptocurrency? And is there a better option?

This is part of a series where Yahoo Finance Singapore will focus on different aspects of millennials and their finances. In this first part, we discover whether it’s better for millennials to invest in stocks or cryptocurrency.

Diversification as the baseline

First things first, it is important to know what you are dabbling in. Investing in stocks can include a variety of investment instruments such as exchange-traded funds, index funds, government bonds, futures, warrants, and commodities trading. They are usually done through investing a small sum of money every month.


Meanwhile, cryptocurrencies are digital assets that people can use as investments or for online purchases. How it works is basically exchanging real currency to buy “coins” or “tokens” of a certain kind of cryptocurrency.

Hence, the short answer to whether stocks or cryptocurrency is a better investment is that it depends on what your financial needs and wants are. In fact, the financial experts that Yahoo Finance Singapore spoke to advised that millennials should actually invest in both stocks and cryptocurrency.

“Ultimately, your financial portfolio should be diversified and you can always choose to invest in both of stocks and crypto because they serve different functions,” said Catherine Seah, 22, a student financial advisor.

Echoing a similar tune, Asheesh Chanda, CEO of Kristal.AI, a digital-first private wealth platform in Singapore, said: “Investing should be seen as being a variety of modes of transport for people to reach their goals. Each mode offers certain benefits and incurs certain costs.”

For example, if you can only afford to invest a small sum every month, then investing in stocks is the way to go as it is low-cost and an effective way of accessing markets. Otherwise, if you are more risk-taking, then cryptocurrency might be a better option for long-term gain.

Stocks as the safer option?

Yet, it seems that most millennials are still leaning towards investing in stocks given without dabbling much in cryptocurrency.

According to brokerage firm Tiger Brokers, 45% of their Gen Z investors prefer long-term stocks like Apple, Boeing, and Carnival. Other data from an OCBC Financial Wellness Survey also find that about every four in 10 millennials who invest admitted that they speculated excessively in the hope of making a quick buck.

For instance, marketing specialist Gideon Lai, 28, has been investing in stocks over the last two years, after thinking of how to gain further cash and make the most of his buck.

However, he also cautions: “It is one thing to see your returns grow, but another to be greedy. I think it is important to draw a balance especially if you don’t really have solid financial knowledge.”

Similarly, 22-year-old Colette Low, a private university undergraduate, decided to dabble in stocks investment because she sees it as a “good long-term investment”. Low, who has been investing around S$5000 a year since she was 19, added that she makes most of her financial decisions after reading up about them online via social media.

“I think stocks are already considered a less risky option since they don’t require much financial commitment. It also helps that it is easy to buy and we can take advantage of the situation whenever the economy grows,” said Low.

As a guideline, experts don’t recommend young investors to stake their important life goals on investments solely.

"For a young person, the best place to grow your money is in capital markets, i.e., stocks and bonds, which have well rewarded investors over time," said Chuin Ting Weber, CEO of MoneyOwl, a bionic financial advisor.

Cryptocurrency the future?

Despite that, it seems that cryptocurrency is also making waves globally as a possible investment option for youths. According to a Bankrate survey in June 2021, millennials (aged 25-40) expressed the most comfort of all age groups with cryptocurrency, with 49% of them being somewhat comfortable with investing in crypto assets such as Bitcoin.

In fact, other survey data from financial site Capitalize revealed that 54% of millennials say that they are intending to include cryptocurrency as part of their retirement strategy.

Fresh graduate Reuben Tay, 25, is one of those as he believes that cryptocurrency is the way of the future given how the cryptocurrency technology is built on security that can allow users and owners to remain private and anonymous during transactions.

“I feel that cryptocurrency allows for more digital access and ownership. Even people who have no access to traditional banks can enter the financial system with the help of cryptocurrency,” Tay said.

And while it is a high risk gamble where there is a strong chance you could lose all your money, Tay believes that the payoff would be worth it as long as you know what you’re doing.

“It is important before investing in bitcoin or other cryptocurrencies to go in with your eyes open and always double check to make sure that you’re not falling for a scam or fake promises of high returns,” shared Tay.

In fact, with the cryptocurrency industry booming, it seems that companies are jumping on the bandwagon to allow for people to be more familiar with cryptocurrency payments.

For instance, local ride-hailing company Ryde will be accepting crypto payments through Bitcoin from the third quarter of 2022. Ryde users will have the flexibility to choose from a growing list of over 70 currencies and 10 blockchain networks to pay.

“We want to deploy non-fungible tokens in a way that generates more real world value, especially for the rapidly growing market segment of Singaporeans who hold crypto”, says Terence Zou, founder & CEO of Ryde.