In the face of market turmoil, investor faith in cyptos, even the staunchest defenders, is beginning to falter. In any case, for American investors, the popularity of cryptocurrency is on the decline. A completely understandable situation against the backdrop of the dizzying decline in the prices of major assets such as Bitcoin (BTC) or Ethereum (ETH).
Crypto Investors: A Crisis of Confidence Among Millennials
The first half of 2022 was very difficult for the crypto market. This year, bitcoin and ethereum have lost almost 50% of their value. Despite some brief gains, the crypto market as a whole is clearly stagnant. Without certainty, experts say cryptocurrency prices may fall further before a sustained recovery. Given this, cryptocurrency as an investment tool is losing popularity among American crypto investors.
In any case, this is confirmed by a recent study by Bankrate (an American provider of online financial data and content). According to the results of the study, this distance is more pronounced among millennials. If 49% of this Generation Y were favorable (or very favorable) to invest in crypto in 2021, this percentage dropped to 29% this year. However, this generational segment is very connected and especially open to new technologies (including cryptocurrencies).
Baby boomers are also beginning to recede
Baby boomer investors are also skeptical, but to a lesser extent. Among crypto investors in this age group, 21% believe the ecosystem is trustworthy. This year, only 11% are convinced. For Gen X, the numbers drop from 37% to 21%. Across all generations, 35% of US investors still believe in the potential of cryptocurrencies as an investment vehicle in 2021. This year, only 21% have some degree of confidence in the ecosystem.
The loss of values of digital assets is highlighted again. On this matter, Greg McBride, Bankrate’s chief financial analyst, said, “It’s a lot easier to be excited and believe in something when you see the value keep growing.” Now that the market is struggling, crypto investors have a different view on investing in digital assets.
Younger generations are more optimistic
The younger generations (Z by the way and the latest generation Y) still believe in crypto even after the crash. During the investigation, Bankrate tried to find out why. It appears that this group of investors is still operating on a “buzz”. In other words, they rely more on information provided on social networks, by friends and family, than on the advice of investment experts. This way of taking things “lightly” partly explains this optimism.
In comparison, older investors fear the volatility of crypto. At the same time, they feel the lack of regulation and transparency is holding them back. For their part, young crypto investors are not aware of the stakes of their investments. James Royal, a senior reporter at Bankrate, says, “A lot of young investors don’t understand what they’re buying, but they see the price going up and they want to participate.”
Although the perception of some crypto investors has changed somewhat, digital assets are still the new investment vehicle in the making. Just keep in mind that this is not a lottery. Wealth is built over time and speculation requires real discipline.
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I stumbled into the cryptosphere and witnessed the birth of a new era, that of DeFi. It’s all about economic freedom, transparency and opportunities available to everyone. It is a universe that deserves to be known.