An analysis carried out by the financial services company – Bankrate – determined that US millennials are not as enthusiastic about cryptocurrencies as they were last year.
Around 30% said they feel comfortable investing in digital assets compared to 50% in 2021.
The latest change in trends
Younger generations, including millennials and Generation Z, are among the most active demographic groups in the cryptocurrency space. A recent survey, though, revealed that the former had lost some of their passion for the sector.
James Royal – Principal Reporter at Bankrate (the company which conducted the study) – reminded that around 50% of US millennials felt comfortable investing in digital assets last year, while this figure has now shrunk to 30%.
In his view, most of the interest in 2021 was generated because of the all-time high prices of Bitcoin, Ether, and other assets. Many youngsters thought they could “make a lot of money quickly,” and that is why they entered the ecosystem, Royals explained.
Bankrate’s employee went further, arguing that cryptocurrency investments rely on “the greater fool theory,” where one can earn profits only by selling their holdings to someone who is willing to pay a higher price than the initial. As a result, “legendary investors such as Warren Buffett” are critics of the asset class, Royals claimed.
He advised Americans to focus on the stock market, especially the S&P 500 Index, if they want to preserve their wealth during times of financial crisis:
“Buying an S&P 500 index fund regularly and then holding on through thick and thin has built the fortunes of many American millionaires.”
And while the trends in the USA seem to have changed in the past several months, residents of other countries (where the economy is in a state of knockdown) have displayed significant interest in cryptocurrencies.
For example, the worrying inflation rate and the political turmoil in Argentina and Turkey have pushed some people into investing in digital assets, particularly stablecoins.
Millennials prefer crypto to mutual funds
Another analysis conducted this summer by the investing firm Alto estimated that around 40% of Americans aged between 26 and 41 have some exposure to cryptocurrencies. The same amount of people admitted investing in individual stocks, while less than 35% own mutual funds.
Interestingly, in November 2021, when bitcoin was trading near its all-time high price of $69,000, 36% of millennials said they wanted to receive half of their salaries in crypto assets instead of fiat.
Back then, Nigel Green – CEO and Founder of deVere Group – explained the youngers’ enthusiasm with the fact that they are most intrigued by technology innovations and are the ones to understand the “massive potential of digital currencies.”