Millennials who got rich on Bitcoin are unlikely to bet their fortunes on alts this time, argues Glassnode expert James Check.
The days of big gains on obscure memecoins during a cryptocurrency bull run could be coming to an end, according to Glassnode senior analyst James Check.
The on-chain markets expert predicted on Tuesday that a large cohort of younger Bitcoin holders may now be holding on to significant sums of money that they are less willing to risk on more speculative assets. “People are less and less willing to turn to shitcoins because they know they will succeed simply by holding on to their bitcoins,” Check wrote on Twitter. “Don’t blow it. They bet on memes here and there, but only to the same extent they bet on football.”
Check claimed that the main source of demand for shitcoins so far has come from “crypto-native millennials”, who are now moving from the “get rich” phase to the “stay rich” phase of their financial lives.
This theory is supported by numerous surveys showing that cryptocurrency ownership and support is over-represented among 18-40 year olds. For example, a Grayscale survey published on Tuesday found that 62% of Generation Z consider cryptocurrencies to be “the future of finance”.
That said, the analyst believes that the investment community has matured since the last bull market and can distinguish winners, such as Bitcoin, from altcoins that generate “no serious demand”. Altcoin holders could therefore struggle to find buyers for their largely speculative tokens. “We may not be far from the last gasp of alts,” he wrote. “Millennials and Generation Z are asking subsequent generations to buy their shitcoins, and this is no different from baby boomers asking them to buy overpriced houses.”
However, the analyst’s latest thesis has yet to be verified. While Bitcoin jumped 50% earlier this year after its own ETFs were accepted in the US, memecoins with no explicit utility, such as DOGE, SHIB, PEPE and WIF, have risen even further. It’s an oft-repeated phenomenon that Bitwise CIO Matt Hougan has previously described as the “wealth effect”. When long-term Bitcoin holders get rich as demand for BTC increases, they tend to cash in on the profits and feel comfortable using them to bet on riskier assets.
Because altcoins have much lower volumes and market caps than BTC, it doesn’t take much money to drive their price up dramatically, Hougan observed. Check himself often drew attention to the massive selling adopted by long-term Bitcoin holders earlier this year, indicating profit-taking behaviour reminiscent of many previous bull markets. By early May, long-term Bitcoin holders appeared to have returned to holding their assets, requiring “higher prices to motivate sales”, according to Check.
