Are NFTs the Next Impact-Investing Craze for Millennials?

By Diego Balan, CIO of Metarex

With 40 percent of millennials already invested in cryptocurrency, there’s a unique opportunity for NFTs to pique the interest of the 2008 financial crash generation. Millennials, or anyone born between 1981 and 1996, hold different perspectives on money management than their parents, with only 4 percent of baby boomers holding crypto and more than three-quarters of Gen X owning none, according to CNBC. By understanding millennial values, NFT projects have insight into what their audience wants and can gear their products accordingly.

So what’s at the heart of millennials' values? The short answer is sustainability. Millennials are twice as likely as Baby Boomers to change their habits to hinder environmental impact. Being sustainable doesn’t only involve bringing reusable shopping bags to the supermarket, but ensuring their revenue and investments match their eco-friendly lifestyle. By leveraging millennial-centric values, NFT creators have a golden opportunity to attract investors who already have one foot in the door.

It’s the sustainability, stupid

Back in 1992, toward the end of the time span in which millennials were born, James Carville coined the phrase, “It’s the economy, stupid,” while advising Bill Clinton during his successful run for the presidency. That sentiment targeted the parents of millennials, but when tweaked it rings truer than ever today.

Some 40 percent of millennials would take a pay cut to work for a sustainable company. This makes for a stark contrast with their predecessors: Less than a quarter of Gen X and only 17 percent of Baby Boomers thought their employers should be sustainable, according to Fast Company. Considering millennials are the largest working generation and account for 35 percent of the total U.S. workforce, with around 56 million employed in the U.S. as of January, a large percent of the workforce seeks sustainability in employers.

The same millennial employees who care about sustainability are also the ones looking to invest their money. A whopping 95 percent of millennials want their investments to generate positive social and environmental outcomes alongside financial returns. Naturally, millennials love impact investing, which hits the sweet spot of being sustainable and lucrative.

At the same time, thanks to broker apps, millennials can start investing in just a few taps. Investing has become more accessible and urgent during the pandemic period, with apps like Robinhood Markets (NASDAQ:HOOD) streamlining trading, and an astounding 13 million amateur stock traders downloading its platform during the pandemic era.

As the younger generation goes on an investment boom, NFTs can play off the millennials’ interest in impact investing.

NFTs are investments that count

The NFT marketplace exploded over the last year from $100 million in 2020 to $22 billion in 2021, and can easily be geared towards millennials interest through investing in NFT projects that are both lucrative and make an impact, such as Ellen Degeneres’s World Central Kitchen NFTs, where all the proceeds went to donating money to the food relief organization. Socially responsible NFT projects like Blazed Cat, where 10 percent of the proceeds are donated to Mental Health America, also have enormous potential to pique investment interest from millennials.

One of the challenges in tackling any kind of sustainability initiative is to make sure all the money is going to the right place—and that’s what Decentralized Autonomous Organizations (DAO) are for. Using blockchain technology for verification and transparency, DAOs will play a major role in promoting sustainability in the NFT space. One such example is PleasrDAO, which actually buys culturally significant art pieces that place an emphasis on charity.

The announcement of ETH 2.0 ushers in a new era of possibilities for sustainable NFTs. By switching from proof-of-work to proof-of-stake, NFTs become even more environmentally conscious through reducing processing emissions. Certain NFT projects are already aware of their carbon footprint, like digital artist Beeple who says he’ll be able to offset emissions by investing in renewable energy or technology that sucks CO2 out of the atmosphere, creating an opportunity for a new era of millennial investment.

Both the pieces are in place for NFTs to become the next big impact investment fad for millennials. They want to invest in projects that make a difference and simultaneously grow their money. By putting the pieces together, NFTs stand a strong chance of taking the millennial impact investment world by storm.

About the Author:

Diego is the CIO of Metarex, the world’s first collection of dinosaur-fossil NFTs, and CEO & co-founder of Accesshoy and TicketHoy Live, with operations worldwide. He is an advisor on multiple blockchain-based startups and a mentor in the Blockchain Technology Institute. Diego’s expertise extends to live streaming, with more than 800 digital events broadcast live under his executive direction. He is a well-known and respected team builder and business developer with a focus on new revenue generation. Diego is also a known promoter of social impact projects and events and is currently serving as the CIO of Xave Market & Xave World Metaverse.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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