Since the creation of cryptocurrency, its markets have been largely driven by millennials, as well as…

Since the inception of cryptocurrency, its markets have been largely led by millennials, as well as younger members of GenX and, more recently, members of Generation Z. However, thanks to the introduction of exchange-traded funds (ETFs), it has come to be dominated by these eroded younger generations.

ETFs are spurring greater participation among baby boomers, the world’s richest demographic. They control approximately $68 trillion in assets in the United States alone – the largest of any demographic group. As investors, they were generally overexposed to stocks and real estate, of which they owned the largest share. The cryptocurrency sector is an underweight sector.

In the United States, half of the investment companies that manage their wealth have access to new Bitcoin (BTC) ETFs. The influx of experienced investors will continue to bring new dynamics – including higher prices, different investment styles and increased stability.

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Bitcoin ETFs attracted more than $15 billion in investments in June, reflecting confidence in Bitcoin and arguably the broader cryptocurrency sector. Although this is modest compared to traditional assets, the approval of the ETF has universalized access. As some experts recommend allocating 1-5% of Bitcoin in investment portfolios, the products offered by asset managers and big banks ensure that baby boomers can easily invest in platforms that actually hold their wealth , avoiding the need for trade that does not diversify.

Bringing new wealth and control

Research suggests that baby boomers are here to stay. why not? Bitcoin has a constant supply and has been the best performing asset of the last decade. Cryptocurrencies have become a valuable means of diversification, leading to increased interest and price discovery through both institutional investors acting on behalf of their clients and individual investors directly allocating their funds.

Contrary to popular belief, baby boomers might be better crypto investors than their younger counterparts. A study conducted by Bybit and Toluna shows that 34% of baby boomers spend “a few days” on due diligence before investing, 50% more than younger generations.

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In North America, 64% of investors spend less than two hours researching before investing. (Meme coins, anyone?) Baby boomers, especially those who are retired, have more time to conduct in-depth research, making them more knowledgeable and patient investors. Instead, baby boomers who pay more attention to technical factors related to the token economy, utilities, and competitive landscape will produce better investment results than younger investors who often prioritize factors of reputation.

In a February interview with Bloomberg, Galaxy Digital CEO Mike Novogratz reiterated his long-standing prediction that the market value of Bitcoin – around $1.3 trillion as of June – would surpass around $15 trillion gold, partly thanks to investments by baby boomers.

Bitcoin and gold prices from January 2015 to June 2023. Source: Journal of Risk and Financial Management

“This is probably the first time in the history of Bitcoin that we have discovered a real price,” Novogratz said. “For every Charlie Munger – may he rest in peace – who dies, that money goes to Gen Z and Millennials, and they feel more comfortable with digital gold than old gold.”

Beyond direct purchases, the impact of intergenerational wealth transfer is another factor likely to determine the next market cycle. With trillions of dollars expected to be inherited, cryptocurrencies will rise because the main beneficiaries of this wealth are digitally literate, although predictions are different. By 2030, it is estimated that millennials will own five times more wealth than at the start of the decade.

Baby boomers are likely to be game changers in the cryptocurrency space because of the wealth they possess; The fact that they were slow to arrive on the market; And because they take more time to find out before investing. Their more rigorous research and investment methods bring much-needed stability to the industry.

After all, it’s hard to see the same investors risking their capital on memecoins and focusing on stablecoins instead, and that’s a positive development. At an industry level, the development of new altcoin ETFs, asset managers operating in this space and the size of these companies, as well as the economic transfer of wealth from baby boomers, will drive an increase in demand for crypto -currencies.

Robert Quarterly-Janeiro He is the chief strategy officer at Bitrue, a cryptocurrency exchange focused on Asia and Europe. He has worked at hedge fund consultancy Sussex Partners, investment bank Santander, venture capital studio CCV, London School of Economics, Black Square International and financial consultancy QR&P investment.

This article is intended for general information purposes and is not intended and should not be relied upon as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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