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Young investors fall out of love with bitcoin and meme stocks

Joanna Faith
Written By:
Joanna Faith

Two-thirds of millennials and Generation Z who own cryptocurrency or ‘meme’ stocks have either sold all or some of their investments, research has revealed.

A survey by The Royal Mint found more than half (53 per cent) of young investors felt they didn’t gain as much as they had hoped or had lost money with these ‘get rich quick’ assets.

The volatility of cryptocurrencies such as Bitcoin led the Financial Conduct Authority (FCA) to issue a warning to investors earlier this year saying they should be “prepared to lose all their money”.

Meme stocks are shares that have gone viral online and attracted an influx of investors.

GameStop and AMC Entertainment are two of the best-known examples.

These stocks often experience drastic price increases in a short space of time because of hype on forums and social media.

The research found many young people have become disillusioned with these high-risk investments and are turning their attention to lower risk assets such as gold.

More than two thirds (68 percent) of young people are considering investing in precious metals following their experience with cryptocurrencies and meme stocks, the survey found.

Many were drawn to esoteric investments because they were following those around them, rather than basing their decisions on well thought out rationale.

Data shows that Gen Z (those born after 1995) and millennials (those born between 1980 and 1995) regularly base their investing decisions on trending topics both online and on social media.

It comes as Bitcoin, the best-known cryptocurrency, crashed to its lowest level in nearly a month on Tuesday after El Salvador adopted it as legal tender, sparking riots.

Bitcoin prices fell by more than 17 per cent from from $52,000 to under $43,000 before recovering.