Crypto Winter’s Harsh Lessons May Spawn the ‘Last Unbanked Generation’

Cryptocurrency prices have been collapsing for more than half a year now, so it seems counterintuitive to say that crypto investing is a tool that can create “the first financially successful generation.”

Yet Eddie Behringer, co-founder and CEO of teen-targeted, education-focused Copper Banking, said he sees the crypto winter as an educational opportunity for his customers, whose “sweet spot” is about 15.

“The way that we do that is really by providing education behind that access,” he told PYMNTS’ Karen Webster.

And with Generation Z and Copper’s target consumers behind a lot of crypto’s growing adoption by the mainstream, Behringer said “a lot of the things that we see in this volatility are really great opportunities for us to really educate.”

That is a big part of Copper’s broader strategy, he said: to provide that financial education by providing teens with the “actual access” they need “to really be a part of the ecosystem.”

They’re also able to access it in a far safer space than going to a decentralized finance (DeFi) exchange because top exchanges like Coinbase only take customers 18 or older, Behringer said.

“At the base level, we’re onboarding the next several million consumers,” he added.

That’s not a need that is limited to young people. With just 68% of Americans considered to be financially literate on a general level, according to experts, helping people successfully invest in the newer and often complex cryptocurrency industry and its economy needs a helping hand.

Related: What History Tells Us About Finding Bitcoin’s Bottom

Education First

“Way before we offered crypto alongside banking and our fully managed investment products at MoneyLion, we launched modules on what cryptocurrency basics were,” starting with the history of bitcoin and several altcoins, MoneyLion co-founder and CEO Diwakar Choubey told Webster.

Noting that only 17% of Americans have taken a personal finance course in high school, Choubey said that even before the neobank began working with Crypto-as-a-Service provider Zero Hash to build its crypto rails, the first step was to spend “a lot of time on content creation … really discussing what this new technology is and what it may ultimately mean for society as a means of either storing money or a payments rail.”

As far as why they built out crypto services, Choubey said customer surveys found that 80% wanted access to cryptocurrencies.

Even with the 2022 crash, Choubey said “crypto has owned the zeitgeist” to the point where his customers are getting scattershot and often questionable information from social media.

See also: Dogecoin and the Siren Song of Crypto

“Our customers told us [they] want to be in the know, despite potentially having a lower take-home salary” than someone who might use an exchange like Coinbase, he said.

“We wanted to be the definitive source for having the right advice in terms of how a consumer should be thinking about, if you have $1,000 to invest, you probably should start off in your by-the-book, fully managed investment account that takes into account your risk profile, your age, your employment type, and when you may want to retire,” he added.

But once they’ve put 80% into that goal-oriented account, he noted that many want to dabble with bitcoin and ether — the cryptocurrency of the No. 2 blockchain, Ethereum.

Virtuous Circle

That’s something Zero Hash is seeing from other clients, co-founder and CEO Edward Woodford told Webster.

“We’re continuing to see demand,” he said, noting that the firm had a record number of new crypto accounts opened during early- to mid-June. “I think folks were realizing that crypto’s on sale.”

More to the point, neobanks can open crypto investing to underserved clients and communities in an easy, flexible and seamless manner they often did not have access to, Woodford said.

But it’s not just straight investing, he added. A good number of clients are seeing success with offerings like crypto roundups and rewards programs that let people buy into digital assets without actually taking money out of their wallet.

“There’s this virtuous circle piece,” he said. “Now you can round up, you can get rewarded. You can then sell those assets, you can buy, you can increase as you feel more confident and comfortable with the different pieces. It’s really about embedding it and fitting into the customer experience.”

That’s key because the goal is to keep those customers, rather than have them withdraw funds and go to Coinbase.

“Why they’re staying with you has to be the core piece,” Woodford said. “It’s around that comfort, that education,” and that they are “embedded with the brand they trust already.”

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