Bitcoin: The great wealth transfer might be coming sooner than expected
The latest Bitcoin bull run pushed crypto to the fringes of mainstream investing, at the very least. The exponential price surge, coupled with mounting institutional interest, was reflective of the general perception that digital assets are a valuable addition to investment portfolios. Moreover, it is not just big-ticket investors but even comparatively smaller portfolio holders that are looking into Bitcoin investments and the interest is only growing by the minute.
A new study by Washington-based analytics firm Gallup revealed that Bitcoin investments by American adults having more than $10,000 in traditional investment vehicles tripled over the last three years. It went from a 2% to 6% portfolio allocation, a finding which suggested that Bitcoin is slowly reaching general acceptance and entering the maintenance market.
The second-quarter Gallup Investor Optimism Index survey further revealed that young adult investors are more likely to indulge in Bitcoin investments. It was also found that 13% of those between 18 and 49 owned Bitcoin, compared to just 3% in 2018.
However, it has been harder for BTC to make inlands with older investors as only 3% of those above 50 own the digital asset. The number has, however, tripled from 3 years back when it was a mere 1%. Even so, this figure is indicative of the general hesitancy that veteran investors have about cryptocurrencies.
There is also a visible gender disparity between investors as it was found that out of those surveyed, male BTC investors amounted to 11% while only 3% are female. This, alas, is in line with the general consensus from previous reports about female investors lagging behind. That being said, some reversal was being seen of late, with the same underlined by data from trading websites like eToro and Robinhood.
Overall, the critical tide for crypto seemed to be turning as those who believed they would never be interested in buying crypto dropped from 72% to 58% between 2018 and 2021. Similarly, the risk perception associated with crypto too declined considerably over the same time even as it was still viewed with suspicion by most.
In any case, the proportion of surveyed investors calling it “very dangerous” declined from 75% to 60%, even as 35% thought it is “considerably dangerous” and only 5% viewed it as carrying no dangers.
The aforementioned report concluded by stating,
“Large investments in bitcoin by well-known companies such as Tesla, Square, and Morgan Stanley may be giving it more mainstream credibility.”
Nevertheless, the disparity between younger and older investors is not surprising. Millennials are known to be the most enthusiastic about crypto as they are at a point in life where they can take risks and are more embracing of new technology. Moreover, the 2008 financial crisis was an eye-opener for many of them, and they are still struggling to retain their trust in the current financial and banking systems.
The Gallup report’s findings have given impetus to the belief that the greatest generational wealth transfer in which millennials are set to inherit $68 trillion from older generations will be beneficial for Bitcoin. It is considered unlikely that gold, which has already fallen in popularity, and other stocks and investments will receive the bulk of this wealth as more millennials and Gen Z shift towards unconventional banking.
In fact, it was found in a recent CNBC survey that half of the surveyed millennial millionaires had invested at least 25% of their wealth into cryptocurrencies, while over a third of them had over 50% investments in crypto. Other surveys have also found that millennials are more likely to trust their dentist than banks and Wall Street.
As more millennials transfer their wealth from traditional banking to crypto, this impending wealth transfer might just be one of the biggest revolutions that financial history has ever seen as it will see wealth change hands not just across generations but through financial institutions and systems altogether.