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Millennial Investors Are Increasingly Uncomfortable With Cryptocurrency

By on September 29, 2022 0

The popularity of cryptocurrency with American investors is on the decline.

In 2022, only about 21% of Americans feel comfortable investing in cryptocurrency, according to Bankrate’s September survey. That’s down from 35% in 2021.

Although comfort levels have fallen among investors of all generations, the decline has been most pronounced among millennials. Nearly 30% of US investors aged 26-41 feel comfortable in 2022, up from nearly 50% in 2021.

The decline is unsurprising, considering nearly $2 trillion has been wiped from the entire crypto market since November 2021.

“Traders of any asset are fans of fair weather, and with major cryptocurrencies such as Bitcoin and Ethereum down more than 70% from their all-time highs, it’s no wonder the ‘Shininess has come off of these coins,’ James Royal, senior reporter at Bankrate, tells CNBC Make It.

“The drop in crypto prices is not helping the cause of attracting more people to crypto,” he adds.

Initially, many young investors’ interest in crypto was due to the “lottery ticket atmosphere” where it seemed like you could make a lot of money quickly, Royal says: “A lot of young investors don’t understand this. they buy, but they can see the price go up, and so they want to participate.”

However, the price of popular digital currencies such as bitcoin has struggled to reach its 2021 highs. Bitcoin has been trading between $18,000 and $25,000 since June, down from its high of over $65,000 in November 2021 .

“The only way to make money is to sell it to someone more optimistic or dumber than you,” Royal says. For this reason, he adds, crypto should not be considered a traditional investment.

“It’s more like buying an arcade token and hoping someone pays you later. That’s why legendary investors like Warren Buffett won’t have anything to do with cryptocurrency. “, he says.

Cryptocurrency is considered a highly volatile asset subject to unpredictable price fluctuations. Financial experts generally advise against investing more money in cryptocurrency than you are willing to potentially lose, as there is no guarantee of making a profit.

If you’re looking for a less speculative investment, you have plenty of proven options: “Buying an S&P 500 index fund steadily and then holding it through thick and thin has built the fortunes of many American millionaires,” Royal says.

“Sure, some people win the lottery, but wealth is built over time and it’s accessible to those who can be disciplined investors,” he adds.

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