The Blog

Ms Millennial Money Reviews: $LIBRA’s Fall and the Phoenix of NextGen Retail 

By Sarah Penney, Ms Millennial Money 

Despite the intelligence, strength, and community spirit young retail investors have demonstrated – the GameStop rally is just one example (read my review here) – nextgen retail still struggles against the ‘dumb money’ stereotype perpetuated by institutions and mainstream media. High-profile scams like the recent $LIBRA memecoin rug pull don’t help, reinforcing unhelpful narratives and painting mostly young crypto investors as reckless and uninformed. 

By underestimating the next generation of retail investors, companies risk alienating a significant source of liquidity and shareholder support. We’re already seeing the results – retail share ownership in the UK is down 11%, not to be taken lightly! 

Young retail investors are keen to seek out opportunities that both excite them and set them up for financial freedom. They have their fingers in many pies, influencing markets in ways that institutions may be overlooking. It’s time to shake off the ‘dumb money’ stereotype and take notice of how retail is reshaping markets. 

Memecoins: Killing Team Crypto? 

The recent $LIBRA scandal exemplifies how a few bad actors can damage the reputation of cryptocurrencies. Promoted by Argentine President Javier Milei, $LIBRA quickly surged to a market cap of about $4.5 billion, only to collapse after developers withdrew $80 to $100 million. This incident has left the President facing accusations of fraud and fighting for his political life, as well as leaving many retail investors with heavy losses, fuelling negative perceptions of crypto investors in the media. 

However, as TEA’s Gen Z Ambassador Niam Patel points out, it’s important to recognise that memecoins are a very small segment of the cryptocurrency market and should not be confused with more established coins like Bitcoin and Ethereum.  

Memecoins appeal to a sub-section of the crypto fanbase—some see them as a get-rich-quick scheme, while others enjoy the community and see them as a bit of fun. In his rounds of crypto YouTube, following the $LIBRA scandal, one of the coin’s creators, Hayden Davis, candidly acknowledged that memecoins are largely a gamble and should be viewed as such by investors.  

We must understand that the crypto universe is just that: a diverse market offering opportunities for those with varying risk appetites. 

The Savvy Shift Among Young Investors  

We could stray into dangerous territory by letting the memecoin phenomenon paint all crypto investors with the same brush. Crypto is more mainstream than it’s ever been and will continue to rise, powered by big financial players like Larry Fink and BlackRock, indicating its increasing legitimacy. As Niam told me, money will continue to legitimise crypto until it’s fully mainstream.  

Over 170,000 investors have already become millionaires through crypto, with the majority aged 18-40, and by the end of last year, over 7 million people in the UK held crypto assets. 

Embracing New Investment Strategies  

But don’t get it wrong – not all young investors are obsessed by crypto. A recent report from Interactive Investor (ii) shows that Gen Z and Millennial investors are proving to be very successful in the Capital Markets too, shifting from the traditional investment approaches of watch and wait toward proactive, multifaceted approaches. ii’s data suggests a nuanced attitude towards risk is coupled with a keen grasp of the markets – Millennials were the top-performing age group on the platform, outperforming key benchmarks.  

Portfolio performance is combined with another widely reported trend – UK investors shifting their focus to foreign markets. ii reported steady outflows from the UK to other markets over the last five years, as well as a growing interest in passive vs actively managed funds. 

Again, it’s important not to write off this trend as the decision of ‘dumb money’. UK companies and UK capital markets leaders must recognise this shift and seize the opportunity to attract back the 11% of retail investors who are exploring other markets – plus their children and grandchildren! 

Opportunities for UK Companies 

Engagement is key. Retail investors are eager for exciting opportunities. This is a prime moment for companies to tap into the growing interest in investing, fuelled by the buzz around crypto. Instead of seeing crypto as an underground world to be feared, it could be viewed as an indicator that the next generation is more engaged in their finances than ever. They want to grow their bags and are keen to explore diverse opportunities to do so.  

It’s time to follow the ‘smart money’ and capture the retail dollar! 

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