For those who want to make pensions sexy to Gen Z and young millennials…

Where do young people invest?

This article tells you what the smart grad about town, has been doing with the spare cash which we want to attract to long-term saving for retirement. Thanks to Ethan Wu of Unhedged  Sign up here to receive Unhedged in your inbox every weekday.

Sam Bankman-Fried should stop giving interviews. In multiple interviews this week, he offered an account of how FTX collapsed that amounted to “I had no idea what I was doing, was constantly making mistakes, and everything that could’ve possibly gone wrong did”. (The FT’s Alex Scaggs has the blow-by-blow.) His account made no sense to us. We’ll see how it holds up after John Ray, FTX’s new chief executive, talks to Congress on December 13.

Bankman-Fried, remember, was crypto’s adult in the room. How far the industry has fallen. Bank of America published this half-serious chart last month (h/t Brent Donnelly):

The whole sector is wobbling. Kraken, a major exchange, laid off 30 per cent of staff on Wednesday. Some crypto miners are defaulting on loans as bitcoin’s price sinks below its production cost; lenders are seizing their mining rigs as collateral. Digital Currency Group, a holding company that includes one of crypto’s oldest funds and most important prime brokers, is facing tough questions after Genesis, its prime broker subsidiary, got caught in a liquidity crisis last month. Genesis is reportedly considering bankruptcy.

It was in this context that we read a recent paper from the Bank for International Settlements. The authors looked at usage of over 200 different crypto-trading apps across the world from 2015-22, and their results were ugly:

  • Bitcoin’s early 2021 bull run lured in 511mn new monthly active users around the world. At bitcoin’s peak in November 2021, nearly 33mn people were trading crypto on an average day.
  • When bitcoin prices rise, smaller bitcoin holders buy and big holders sell. The most eager buyers into rising prices are the smallest, holding fewer than 1 bitcoin. Holders of 100,000 or more bitcoin, often called whales, used rising prices to cash out.
  • Some four-fifths of bitcoin investors probably lost money. This is a rough estimate based on debatable assumptions. But the high four-fifths figure reflects the fact that 73 per cent of crypto phone-traders downloaded their app when bitcoin was above $20,000. It is now below $17,000.
  • The crypto traders were disproportionately men under 35. This demographic profile fits with other research from El Salvador, finding that bitcoin adopters were largely educated, young, tech-savvy and male.

This is all to say bitcoin is mostly a speculative plaything — no surprise there. But our question is: can a bubble that burnt tens or hundreds of millions of global investors reinflate? (Ethan Wu)

I suggest that if you want to compete for young people’s money, you play the waiting game.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to For those who want to make pensions sexy to Gen Z and young millennials…

  1. con keating says:

    I can add another bubble that burst to that Bank of America graphic – index linked gilts

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