A top executive at a crypto asset management company says the financial struggles most Americans face are driving them to seek bigger risks in altcoins for a chance at profits.
Ikigai CIO Travis Kling says on social media platform X that he sees a “tangible element of financial nihilism” in American society.
According to Kling, the American dream is no longer as easy to achieve as it used to be and is still the case today Push pushing young Americans to venture into riskier crypto assets like memecoins.
“The idea that the cost of living is holding back most Americans; that the possibility of upward mobility is out of reach for more and more people; that average house prices divided by average income are at a completely unsustainable level.
That’s all true, so you should really swing for the fences.
Why not put $500 into a memecoin that could go 50x, knowing you could probably lose most or all of it? It’s not like $500 is enough to make any difference anyway…
That mentality, which is becoming pervasive in America, is financial nihilism. This is the spirit of the times for young Americans, you are naive to think otherwise. And it is a huge driver of sh*tcoining.”
Blade points out that two dominant trends are driving the thinking of traders chasing higher returns in altcoins. The first is relative valuation or the idea that it is better to accumulate one crypto asset over another just because it is cheaper.
“ETH is a buy because it is cheap to BTC. SOL is a buy because it is cheap for ETH. APT and INJ are buys because they are cheap for SOL. SUI, SEI and TIA are buys because they are cheap for APT and INJ. The absolute valuation levels are ignored. Fundamental issues are ignored. Buy the thing because it’s cheap for the other thing.”
The second tendency implies air droplets. According to Kling, traders participate in crypto networks that they believe will reward them with free tokens.
“Airdrops were huge in 2023, one of the biggest stories of the year in alts. ARB, JTO, BLUR, friend.tech. In 2023, savvy market participants on the stimmy chain received crypto checks that would make the US government blush. The smallest airdrop broadcast by JTO was worth $8,500… Let that sink in…
Who cares what the appraisal is if you get it for free? I’ve never had a setup like this before.”
The Ikigai CIO ends his analysis of financial nihilism in America by saying that people are willing to enter the crypto markets even if they don’t trust the asset class.
“One last point on financial nihilism and crypto. Americans don’t trust crypto. Three in four who are familiar with crypto do not trust the safety of trading in crypto. 40% of crypto investors have no confidence in crypto. And yet, if you were to survey those same investors and ask them about higher prices, I would give you high odds that the majority would expect higher prices. Don’t believe it, but prices are going up. A lack of pretension. Let’s start sh*tcoining.
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Generated image: Midjourney