A top executive of a crypto asset management firm says the financial struggles experienced by most Americans are driving them to seek greater risks in altcoins for a chance to see gains.
Ikigai CIO Travis Kling says on the social media platform X that he sees a “palpable component of financial nihilism” in American society.
According to Kling, the American dream is no longer as easy to achieve as it once was and it is pushing young Americans to venture into riskier crypto assets like memecoins.
“The idea that the cost of living is strangling most Americans; that upward mobility opportunity is out of reach for increasingly more people; that median home prices divided by median income are at a completely untenable level.
All of that is true, so you need to really swing for the fences.
Why not put $500 into a memecoin that could 50x, knowing that you could likely lose most or all of it? It’s not like the $500 is enough to make any difference anyway…
That mindset, which is becoming pervasive in America, is financial nihilism. This is the zeitgeist for young Americans, you’re naïve to think otherwise. And it’s a huge driver of sh*tcoining.”
Kling points out that two dominant trends are guiding the thinking of traders who are chasing higher yields in altcoins. The first one 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’s cheap to BTC. SOL is a buy because it’s cheap to ETH. APT and INJ are buys because they’re cheap to SOL. SUI, SEI and TIA are buys because they’re cheap to APT and INJ. The absolute valuation levels are ignored. Fundamentals are ignored. Buy the thing because it’s cheap to the other thing.”
The second trend involves airdrops. According to Kling, traders are participating in crypto networks they believe will reward them with free tokens.
“Airdrops were huge in 2023, one of the biggest narratives of the year in alts. ARB, JTO, BLUR, friend.tech. In 2023, savvy on-chain market participants received stimmy checks from crypto that would make the US government blush. The smallest airdrop sent out by JTO was worth $8,500… Let that sink in…
Who cares what the valuation is when you get it for free? Never had a setup like that before.”
The Ikigai CIO ends his analysis of financial nihilism in America by saying that people are willing to enter the crypto markets even though they don’t trust the…