A new survey data revealed an interesting finding – about 40% of millennials would support investing in crypto assets in the event of a recession. Famous multi-asset investment and social network platform eToro conducted the survey on generational investment from July 18 to July 31 among 1,000 online investors in the US and shared the survey result with a popular online crypto media on Sept 10.

The respondents were aged between 20 and 65 years and thus covered Generation X, millennials, and Generation Z. As expected, more than two-thirds of US investors are worried about a recession which may be partly due to the recent trade war with China. As a result, they are interested in converting part of their stock portfolios to safer investments or hedge with digital assets, commodities or properties.

Why the possible recession?

Reliable data indicates that the US may face another recession soon. The worse news is that the economy of several other first-world countries may be affected as well. This might lead to another global economic slowdown. Japan is already experiencing a recession, and it has made a dirty trade dispute with South Korea. The indecision on Brexit has shaken the UK’s economy.

Similar economic crises occurred in Italy, Germany, Hong Kong, Singapore, Argentina, Brazil, and Mexico as a result of political instability or trade disputes with other countries. However, the biggest economic event this year is the trade war between China and the US. China’s growth rate has slowed down as Donald Trump launched the trade war just after China surpassed the US in terms of economy size. According to the American Enterprise Institute’s economic policy studies director Michael Strain, A major reason for the increased risk of recession is President Trump’s greatly ill-judged trade war. If the president could reach a feasible deal with Xi Jinping, the risk of recession would drop significantly.

Crypto becoming a favourite asset

Investors have to consider several economic aspects while conducting their business. Also, these economic factors affect different age groups differently. The survey conducted by eToro found that 40% of the millennials would prefer to invest in crypto in case a recession occurs. On the other hand, half of Generation Z are interested in real estate in that situation and 38% of Generation X prefer commodities. In the discussion, Guy Hirsch, managing director of eToro U.S., said:

“We believe that if a recession were to occur, we’d see shrinking stock portfolios and growth in other asset classes like crypto, as well as new fractional ownership models. Historically, these investment opportunities have been limited to high net worth and institutional investors, but innovation is unlocking these opportunities for everyday investors and clearly, these results indicate that the demand is there.”

Fractional ownership seems to be a safer option

A recession would turn investors’ eyes towards fractional ownership and unconventional types of assets. In the survey, 92% of those most concerned about a recession said that they would invest in famous artworks, private startups, and landmark buildings. About 55% of the respondents would sell a portion of their stock portfolio and go for fractional ownership with the money.

They believe that these new asset types are less likely to be affected by an economic slowdown. Hirsch believes that investors want more freedom than the current financial status parameters to allow and this would inspire younger investors to participate in the market.

Earlier surveys show consistent results

A recent survey by Huru India revealed that high net-worth persons in India are more likely to invest in digital currencies. Cryptocurrencies seem to be the fourth most preferred asset in general. However, nearly half of the respondents were unaware of cryptocurrencies. Another survey data published in July this year shows that 9% of American millennials prefer crypto as a long-term investment option.

In general, crypto assets are the seventh most popular investment choice among Americans. Real estate is still the most favorite investment sector despite the 2008 real estate crash and potential recession this year.