Crypto Crash: Bankrate September Survey: Millennials’ Confidence in Crypto Market Falls | news

• Confidence in cryptocurrencies is falling
• “Faith test” in the crisis
• Insufficient information about crypto investments

A general trend can be seen from Bankrate’s September survey of Americans’ adoption and investment behavior in the crypto market: Compared to the previous year, investor confidence in the crypto market decreased by 35 percent across all generations. The generation of millennials stands out in particular, where trust has even dropped by 50 percent.

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Test of faith for fair weather fans

One reason for the significant drop in investor confidence can certainly be found in the drop in the price of cyber currencies. Because at the time of last year’s survey, the crypto market was in a real boom phase shortly before its all-time high. “It’s much easier to be enthusiastic and believe in something when you see the value steadily increasing,” Greg McBride, senior financial analyst at Bankrate, is quoted in the report as saying. “But the true test of faith comes when push comes to shove, and many investors have realized that they are now thinking differently about investing in cryptocurrencies.”

James Royal, chief reporter at Bankrate, told CNBC Make It that falling crypto prices are definitely a hindrance to attracting new investors to the crypto market.Down more than 70% from their all-time highs, it’s no wonder these coins have lost their luster. .”

Lack of information about a complex and volatile market

Cryptocurrencies are considered highly volatile and can be subject to unpredictable price fluctuations, as the past year has shown. Bank rate experts write that many investors, especially young investors, got carried away by the crypto euphoria and the promise of “fast money” without understanding the crypto market. This has been put into perspective in light of recent crashes.

The quality of information from social media, which is increasingly perceived as insufficient, could have contributed to the withdrawal of young investors from the crypto market. Interested parties must rely solely on the statements of the influencers without receiving well-founded information. It is therefore not surprising that after the complex events surrounding the Terra LUNA crash in early May 2022 and the chain reaction it triggered, the demand for reliable information is increasing. According to the Bankrate survey, 70 percent consider financial advisors to be a reliable source of information, compared to only 21 percent of social media platforms. Studies from recent years have drawn the opposite picture: behind friends and family, social media was the most popular source of information for younger generations.

Compared to traditional investments such as stocks or real estate, cryptocurrencies do not generate any cash flow, which is why crypto traders must always rely on the “bigger fool theory,” according to the Bankrate report. “The only way you can make money on this is to sell it to someone who is more optimistic or stupid than you are,” James Royal told CNBC.

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