Prince Harry was branded a "race traitor" and pictured with a gun to his head in an image posted online by an extremist teenager.
The image of the Duke of Sussex, against a blood-spattered background and featuring a swastika, was shared on a far-right social media platform last year.
Michal Szewczuk, who was charged with two counts of encouraging terrorism and five counts of possession of terrorist material, searched " Meghan Markle ", "Prince Harry" and "pointing gun" before creating the image and sharing it in August.
It included the phrase "See Ya Later Race Traitor".
The 19-year-old, of Bramley, Leeds, sipped water and gave no reaction in the dock at the Old Bailey, while quotes from his blog justifying the rape of women and children to further an Aryan race were read aloud to the court.
He is being sentenced alongside Oskar Dunn-Koczorowski, 18, for encouraging terrorism by posting images or links to Gab, a social media platform which attracts mainly far-right users, last summer.
Dunn-Koczorowski, whose posts included support for far-right terrorist Anders Breivik and the threat of ethnic cleansing of Albanians, demonstrated a "highly radicalised and violent mindset", the court heard.
Prosecutor Naomi Parsons said the posts, made across three accounts by the two teenagers "convey a message of the threat of and/or use of serious violence against others, in order to advance a political, ideological and racial cause (neo-Nazism) and in this way encourage terrorism".
She told the court targets included Jewish people, non-white people and anyone "perceived to be complicit in the perpetuation of multi-culturalism".
Dunn-Koczorowski, 18, from London, is being sentenced for two counts of encouraging terrorism.
Szewczuk, who was arrested in December at his halls of residence during his first year studying computer science at Portsmouth University, pleaded guilty in April to possession of documents including the White Resistance Manual and the al Qaida Manual.
Dunn-Koczorowski, who was arrested at his west London home on the same day last year, admitted the charges against him in December.
The teenagers were remanded in custody as Judge Poulet adjourned sentencing until Tuesday morning.
