An analysis conducted by the financial services company, Bankrate, determined that American millennials are not as excited about cryptocurrencies as they were last year.
About 30% said they feel comfortable investing in digital assets compared to 50% in 2021.
The latest trend change
Younger generations, including millennials and Gen Z, are among the most active demographics in the cryptocurrency space. A recent survey, however, revealed that the former had lost some of their passion for the sector.
James Royal, senior reporter at Bankrate (the company that conducted the study), recalled that about 50% of American millennials felt comfortable investing in digital assets last year, while this figure has been reduced to 30%.
In his view, most of the interest in 2021 was generated due to the historically high prices of Bitcoin, Ether and other assets. Many young people thought they could “make a lot of money fast,” and that’s why they entered the ecosystem, Royals explained.
The Bankrate employee went further, arguing that cryptocurrency investments are based on the “biggest fool theory,” where you can only make a profit by selling your holdings to someone who is willing to pay a higher price than the initial As a result, “legendary investors like Warren Buffett” are critical of the asset class, Royals said.
He advised Americans to focus on the stock market, especially the S&P 500 index, if they want to preserve their wealth in times of financial crisis:
“Buying an S&P 500 index fund regularly and then holding on has built the fortunes of many American millionaires.”
And although trends in the US seem to have changed in recent months, residents of other countries (where the economy is in a state of crisis) have shown significant interest in cryptocurrencies.
For example, the worrying rate of inflation and political turmoil in Argentina and Turkey have pushed some people to invest in digital assets, especially stablecoins.
Millennials prefer cryptocurrencies to mutual funds
Another analysis conducted this summer by investment firm Alto estimated that about 40% of Americans between the ages of 26 and 41 have some exposure to cryptocurrencies. The same amount of people admitted to 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.
At the time, Nigel Green, CEO and founder of deVere Group, explained the enthusiasm of young people to the fact that they are most intrigued by technological innovations and are the ones who understand the “massive potential of digital currencies”.
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