More Americans are becoming less interested in investing in cryptocurrency. This is according to a survey done by Bankrate in September 2022.
The report revealed that only 29% of American investors between the ages of 26 and 41 are comfortable—a sharp decline from 49% in 2021.
Generally, comfort levels dropped in investors across all generational lines. But the decline was steepest among millennials.
Why Are Investors Losing Interest?
When you think of it, a decline in crypto confidence isn’t entirely surprising. The change comes at a time when the industry continues to struggle.
Several investors can count the number of times they made huge losses instead of profits. For instance, in November 2021, about $2 trillion was wiped off the entire crypto market.
In a statement, the principal reporter at Bankrate, James Royal, described the situation as “the shine coming off bitcoins…Cryptocurrency is a high-risk game where you could lose most or all of your money, regardless of age.”
“Given the massive cryptos decline in 2022, it’s little wonder millennials – indeed, all major age groups – have become less comfortable with it.”
Why Did Millennials’ Comfort Fall the Most?
The drop in millennials was the most surprising, considering the group was more open and connected to the new technology.
Gen Xers and baby boomers also lost faith in crypto. Baby boomers dropped from 21% in 2021 to 11% in 2022. Gen Xers dropped from 37% to 21%.
Royal explained that millennials had a false image of what crypto is. According to him, many young investors first thought crypto was like a lottery or get-rich-quick scheme.
“Many young investors don’t understand what they’re buying, but they can see they’re buying but can see the price going up, and so they want in,” said Royal.
He added that people should stop considering crypto as a traditional investment. This is because cryptocurrency is very volatile and subject to price fluctuations.
Experts advise you not to invest more money than you want to lose. There is no guarantee you will make a profit.
Bankrate’s report revealed that millennials and Gen Zs were taking financial advice from the wrong sources. Instead of listening to actual investors, younger groups were more open to getting information from social media, family, or friends.
A lot of misinformation caused younger crowds to believe that crypto will make them billionaires in the future. According to a survey by Harris Poll, many youths still do. However, everything seems to be going contrary to their high expectations.
“It’s more like buying an arcade token and hoping someone will pay you more later. For this reason, legendary investors such as Warren Buffet won’t have anything to do with cryptocurrency,” said Royal.
Despite this, a few people still have unwavering hope for cryptocurrency, believing that the industry is still new and will soon get on its feet. That when that time comes, they will be filthy rich.