Why investing needs to be democratised


The financial crisis turned the world upside down. It shattered trust in legacy institutions and shaped a whole generation. It was shocking to see how people got scammed by bank advisors, who are not really advisors, but actually salesmen for products they don’t understand. In the meantime, Bitcoin appeared and its concept was not only mind blowing, it also captured the hearts and minds of a whole generation. This young, digital native generation does not want their parent’s “advisors” anymore. What they want is fair access to products they understand. They want to be in charge of their own personal finance. They want no-bullshit products and advice. But we still have a long way to go: Unfortunately, investing is still a pain. Investing in 2020 feels a lot like investing back in 2010. You have to put up with poor user experience, unnecessary bureaucracy and high entry costs.

The digital generation wants investing to be easy and accessible

As a user you still have to deal with a lot of bureaucracy, outdated infrastructures, bad advice from bank managers and basically the same old stuff, repackaged in an app. What you need to be aware of is that the main reason why people choose a bank is convenience. For the older generation, this means a nearby branch, while for youngsters, it means a nice looking app and great digital products. They value convenience, but young investors are also interested in technology. Nearly 50% of them say that technology is their favourite investment sector. Overall, the digital native generation is more educated about technology and its potential.

In addition to being the largest generation to date, there are also three major trends happening connected to their global aggregated net worth: First, the age group from 18 to 34 is about to enter their prime earning years, which means more liquidity and money to invest. Second, being self-employed is one of the key aspirations for this generation. 54% plan to start their own business while 27% are already self-employed. Third, they are about to inherit massive wealth from their baby boomer parents. Both potentially means further acceleration of net worth.

But more net worth and liquidity don’t solve existing problems. The digital native generation is starting to question outdated and intransparent services in the financial sector. Investing needs to be reinvented. It needs to be democratised. It should not matter at all how wealthy you are. The same access and rules for everyone. While this new generation of investors wants to invest and save money, they don’t want their parent’s investment advisors anymore. They want to reach their financial goals in a more transparent, self-determined way. They also want to invest where and whenever they want. Almost 90% of them check their smartphone within the first 15 minutes of waking up. It’s up to us now to give them the right tools.

What we learned from Bitcoin and blockchain

We at Bitpanda are on a mission. We want to rethink and reinvent investing, by providing ownership of all assets in one place. Therefore, we’re applying the three key learnings from cryptocurrencies to the traditional world of investing: transferability, availability and divisibility.

Bitcoin and blockchain technology showed us that borders don’t matter anymore for digital assets. The goal is to bring the financial world together in the same way the internet did with information. Lower the barriers, make it fair and let everyone participate. Cryptocurrencies also showed that people want to be able to trade whenever they want. No opening hours, no closed trading. Instead, 24/7, 365 days a year availability. And the digitisation of assets also allows a so far unprecedented possibility of divisibility. For example, 1 Bitcoin consists of 100 million satoshis (the smallest Bitcoin unit, think ‘cents’), so the digitisation of physical assets like gold allows us to trade, store and send really small amounts.

Bitpanda’s mission is to reinvent investing

At Bitpanda we are currently expanding our current platform to transition from the leading crypto asset broker to the leading digital investment platform. Our goal is to offer the same advantages and convenience of investing in cryptocurrencies (no or very short waiting times; 24/7 accessibility; exchangeability between different assets) to several new asset classes. We already launched Bitpanda Metals, with which we revolutionised precious metals trading by digitising physical gold and silver.

Going forward we will leverage blockchain technology, so you will be able to invest even small amounts in any asset class, participate in gains and spend fractions buying goods – at any time. Around the Bitpanda platform, a strong ecosystem will be established. Starting with Bitpanda Pro, the ecosystem will provide additional value to users by introducing new products and services. Bitpanda Pro is 100% in-house developed and has provided a highly sophisticated marketplace for crypto assets since summer 2019.

I’m convinced that this shift towards a fairer, more transparent and easily accessible world of personal finance is one of the defining advances for our generation. It’s absolutely amazing to be able to provide the tools necessary for this revolution. Society is ready to question outdated ways, and it’s time for a fresh, better approach to personal finance. Being in this industry has never been as exciting as it is now.


Author: Bitpanda