The Blog

Follow the ‘New Money’ – UK PLC Must Embrace Gen Zennials to Get in on New Wave of Crypto Millionaires

By Ms Millennial Money, Sarah Penney

UK capital markets have long relied on institutional investment, and as a result, UK PLC have priorisitsed engagement with institutional investors over retail. Mostly, this has made financial sense and institutions have offered a steady stream of capital.  

However, over the last 25 years, this stream has all but dried up. Investment coming from pension funds and insurance companies, previously the pumps behind the UK PLC machine, has seen an historic decline.  

In 2000, 39% of the UK stock market was owned by pensions and insurance companies – by 2021, this had reduced to 6% and in 2023 there was a further reduction to 4%. UK pension schemes, specifically, have reduced their exposure to UK equities by 70% since 1997, removing around £400bn from the market.  

According to the ONS, the proportion of UK shares held by UK residents fell 1.2 percentage points from 2020 to the end of 2022, to 10.8%, whereas the number of UK retail investors investing in US companies is increasing. A recent study found that 37% of regular UK investors plan to increase the value of their trading in US-listed stocks over the next three years – 6% say they will increase the value of their US portfolios dramatically.  

The reduction of investment into UK markets has wide-ranging knock-on effects – including underinvestment in housing, energy, water and transport, as well as a decline in innovative companies choosing to list in the UK.  

So far in 2024, there have been just 10 listings on the London stock market, raising £584.6m, down 47% by proceeds compared to the same period in 2023. This is a problem for both the UK government and UK companies. 

One initiative the government is hoping will help to combat the decline is a new regulated stock exchange system, which will enable the trade on shares in private companies. The platform, known as Pisces – the Private Intermittent Securities and Capital Exchange System — is designed to help support the pipeline of future listings on the public markets. 

While Pisces could prove to be an interesting initiative and could help to drive some excitement in UK markets, we see engagement with retail investors and the increase in investment from individuals as the key to making UK Capital Markets great again!  

Generating interest from retail, particularly the nextgen, ‘Gen Zennial’ investors, who make up 28% of all UK retail investors, will be crucial to injecting dynamism into the market.  

UK PLC have a big role to play here, and our concern is that Investor Relations departments aren’t yet looking in the right places to bring in new money.  

The default is to go to the institutions, and then to traditional private wealth – people who these days are often asset rich but cash poor. We need to flip this status quo. 

The 2024 Crypto Wealth Report (published in May 2024) revealed there are now over 173,000 individuals around the world who hold $1 million or more in crypto assets – a 95% increase from 2023 (and not including the new crypto millionaires created from the post-US elections bull run). The jump has been even more significant amongst Bitcoin-specific millionaires, with a 111% increase in the last year, to 85,400. 

We can assume that a high proportion of these crypto millionaires belong to the Millennial and Gen Z generations as a huge 34% of 24-35 years olds own crypto.  

So, it’s a no-brainer for companies to tap this generation of investors, but do they know how? 

Embracing alternative media and meeting nextgen investors where they are is the key. Gen Zennials are digital natives and like to find community online, meaning there are vast networks of online communities discussing finance, investing and trading.  

For a long time, these networks were seen as ‘underground’, but having grown in volume, and with the discussions moving into forums such as eToro and Trading 212, this is no longer the case – the ‘underground’ has moved ‘above ground’, and perhaps the ‘above ground’, traditional media, is in danger of moving ‘underground’? 

Investor Relations and Public Relations teams need to understand and embrace alternative media to be able to engage and attract this wave of ‘new money’.  

Instead of relying on old and comfortable communications practices, companies will need to think more ‘degen’ and engage on a level that resonates. Look at Elon Musk and Tesla. Tesla’s Notice of AGM is given via Substack and communication with investors is made directly, via social media. The UK’s regulatory environment will need to recognise this shift and evolve, but before this happens there are opportunities for companies to embrace nextgen retail and adapt to their methods and means of communication. By thinking beyond the traditional confines of communication and engagement, by getting on the same level as nextgen retail, UK PLC will open themselves up to the millions being generated by Gen Zennial investors.  

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