In the face of market turmoil, investors’ faith in cyptos, even the strongest advocates, is beginning to waver. For American investors in any case, the popularity of cryptocurrency is in decline. A completely understandable situation in the face of the vertiginous fall in the prices of the main assets such as bitcoin (BTC) or Ethereum (ETH).
Crypto Investors: A Crisis of Confidence Among Millennials
The first half of 2022 has been very tough for the crypto market. This year, bitcoin and ethereum have lost almost 50% of their value. Despite some brief rallies, the crypto market as a whole is clearly at a standstill. Without certainty, experts say that crypto prices could fall further ahead of a sustained recovery. In the face of this, cryptocurrency as an investment vehicle is losing popularity among American crypto investors.
In any case, this is what a recent study by Bankrate (American supplier of online financial data and content) confirms. According to the research findings, this detachment is more pronounced among millennials. If 49% of this generation Y were favorable (or very favorable) to investing in cryptos in 2021, this rate fell to 29% this year. This generational slice is however very connected and particularly open to new technologies (including cryptocurrencies).
Baby boomers are also starting to step back
Baby-boomer investors are also skeptical, but to a lesser extent. Among crypto investors in this age bracket, 21% felt the ecosystem was trustworthy. This year, only 11% are convinced. For Generation X, the numbers drop from 37% to 21%. Across all generations, 35% of American investors still believed in the potential of cryptos as an investment vehicle in 2021. This year, only 21% place some degree of trust in the ecosystem.
Once again, the loss of digital asset values is singled out. On this point, Greg McBride, chief financial analyst at Bankrate, said, “It’s a lot easier to get excited and believe in something when you see the value continually increasing.” Now that the market is struggling, crypto investors have a different view of investing in digital assets.
Younger generations are more optimistic
The younger generations (the Z among others and the latest generation Y) still believe in crypto even after the crash. During its investigation, Bankrate tried to find out why. It would seem that this fringe of investors still works on the “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 are scared off by the volatility of crypto. At the same time, they perceive a lack of regulation and transparency, which is holding them back. For their part, young crypto investors are not really aware of the stakes of their investments. James Royal, Senior Reporter at Bankrate says, “A lot of young investors don’t understand what they’re buying, but they can see the price going up, and so they want to participate.”
Although the perception of some crypto investors has been altered somewhat, digital assets are still the new vehicle investment 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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