Damien is 22 years old, he likes soccer, his studies, parties, social networks, good music, in short, he has everything of the young man of 2023. Or almost.

For Damien has the distinction of owning only crypto-currencies. "98% of my wealth is in cryptos," he tells us. In other words, only 2% of his money is available in euros.

This student from Lyon started to get interested in cryptos in 2017, during the previous Bull Market. At the time, bitcoin went from $1,000 to almost $20,000 in less than a year, and he took the opportunity to enter the market with "a few hundred euros."

Like many investors, he lost a lot of his stake between 2018 and 2019, but he had a runaway success with the rise of the markets during the Covid crisis. Today, at only 22 years old, he owns about 300,000 euros in cryptos 😅

To give you an idea, this represents about twice the average net wealth of a French household (150,000 euros)!

We agree, Damien is obviously not a representative case of young Europeans of his generation; he is a bit of a UFO 👾

Except that "UFOs" like Damien, we see more and more of them in the four corners of France - and of Europe.

Why such a phenomenon?

How do these young people invest?

And above all, what impact will this have on traditional finance?

That's what we at The Big Whale wanted to understand 🐳

To do this, we spoke with dozens of young people who have also jumped into the crypto world and talk more about decentralized finance than life insurance or popular savings books.

Some of them are known in the ecosystem, others preferred to remain anonymous.

We also reached out to banks and fintechs to find out what they think about this new generation and what they are doing, or not doing, to adapt to them and attract them.

But before going any further, we must understand what motivates these young people!

The reasons are actually many:

There is obviously the desire to make money 🤑. Like their elders, these investors who are all between 16 and 25 years old also want to make THE right move and, depending on their ambitions and background, afford a vacation, pay for studies, or even "put the daronne (mom, ed. note) in the clear" as some say. The pattern is the same, except that the playing field is that of cryptos.

Until a few months ago, it was possible to find DeFi (decentralized finance) protocols that offered you more than 10% return... monthly! "It's obviously tempting", laughs Hugo, 23 years old. But also very risky. The fall of Terra-Luna and the succession of scandals that followed are the best example.

Price and transparency

Beyond the financial appeal, young people are also seduced by the crypto world, which corresponds to their aspirations and seems "simpler" to them.

When we talk about simplicity, it is not at the level of technical use - crypto is still a complicated universe - but at the level of freedom of decision making.

"With cryptos, I do what I want with my money. I don't have to account for it or ask my bank for permission," says Noé, who is one of the co-founders of White Loop Capital, a French fund that invests in Web3 projects.

It is also possible to trade at any time of the day or night. "There are no opening hours like in traditional financial markets," Simon insists.

Many also stress the importance of transparency in the crypto world. Thanks to the blockchain, everything is traceable, transactions are visible, and there are no hidden fees. "Nothing is free in crypto, but we know what we're paying for, and that's very important," stresses Hugo, who uses DeFi and stablecoins whenever he can to do without euros as much as possible.

"The bank fees are too high for the level of services we receive," says Simon, who still has a bank account because "it's essential" to get paid for his internship.

How many young people are there in France and in Europe? Hundreds of thousands, millions? It's hard to know. What is certain is that their number is constantly increasing 🚀

According to various studies, including those of the Association for the Development of Digital Assets (Adan), 15% of 18-35 year olds have already bought and sold cryptocurrencies. For the 18-25 year old category, this figure could exceed 20% according to some estimates! And the trend is not about to reverse.

For the moment, traditional finance is not too worried about these figures. When questioned, most banks, who did not wish to comment, recognize the phenomenon.

"Something is happening, that's a certainty," explains a banker, while qualifying: "Is this the beginning of a financial revolution?" Not in the short term, obviously.

A risk for the banks?

Today, cryptos and DeFi are just a drop in the financial ocean, and the income of banks comes mainly from older categories, especially those over 50, that is, those who have wealth, financial and real estate.

But the banks would be wrong to underestimate the phenomenon. Because if Damien, Noé and the other young "aliens" of the crypto are not very numerous today, and especially not very powerful financially, they are going to grow, and their patrimony with... "We are going to have to adapt to this new deal", one recognizes on the side of a big French bank.

Some players, especially on the fintech side, have already started to adapt. This is the case of Trade Republic: the German investment app, which claims just over 2 million users in Europe, has recently accelerated on cryptos, especially to attract this younger generation.

"We want to allow these new investors to go to both traditional markets, i.e. equity markets, and also to cryptos," explains Matthias Baccino, head of France at Trade Republic.

Others think that this new generation will eventually come back to the "right path" and leave cryptos nicely. "You'll see that when it comes to buying a house or preparing for retirement, most will prefer to go to the good old banks because it's more reassuring," laughs one banker.

Is he wrong?

Only the years to come will tell.