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Baby Boomer’s Wealth Set to Drive the Next Bitcoin Rally

Date
11/04/2024
Written by
Lykke
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The baby boom generation is a factor that could buoy the next Bitcoin rally. Some seniors have already taken the leap and embraced crypto assets. The transfer of their massive wealth to the next generations in the coming decades is also likely to further bolster the demand for Bitcoin, Ether and other altcoins.

Baby boomers, those born between 1946 and 1964, were until recently the largest demographic cohort alive. They have not only witnessed rising economic prosperity and rapid technological progress during their lifetimes but also count as the most affluent generation ever.

In the US, the net wealth of a baby boomer household was $1.6 million in 2023, data from USA Facts shows. A quarter of this wealth is invested in real estate, half in stocks, mutual funds and retirement funds, and the final quarter in private businesses and other assets. Baby boomers and older generations account for roughly one-third of the US population but together own two-thirds of the nation’s household wealth, $96 trillion. This figure is 11 times higher than the wealth owned by Millennials, those born between 1981-1996, and younger generations, research from Galaxy Digital shows.

Millennials, however, accounted for a majority of crypto ownership, as much as 57% in 2023, despite making up just over a third of the population, data from Bankrate shows.Last year, baby boomers accounted for only 10 percent of total crypto ownership in the US.

“With the [spot Bitcoin] ETF, we have opened up the $80 trillion baby boomer giant bulk of wealth here in the United States, right? $40 trillion of that is managed by [registered investment advisers] RIAs. Broadly, they have not participated in the Bitcoin rally until now. And so as people go from 0% allocation, to 2%, 3% allocations, you’re seeing more demand than supply,” the CEO of Galaxy Digital, Mike Novogratz, said during the 2023 results call.

The US regulator has approved 11 spot Bitcoin exchange traded funds (ETFs), which make investments in the largest cryptocurrency much smoother for institutional and retail investors alike. Since their launch in mid-January, they have attracted billions of dollars in assets. On April 9, the total assets managed by these ETFs exceeded $60 billion, and experts forecast that this figure could exceed $100 billion in the long term. 

Mountain of wealth slowly passed on to the next generations

The trillions of dollars in wealth that are slowly but surely being passed down to the next generations, as the descendants of the baby boomers inherit their wealth, is another factor likely to spur growing demand for crypto assets. The cohorts benefiting from this money are the Millennials and Generation Z (1997-2012).

“The boomers will bequeath the largest inheritance in the history of the world to Millennials or younger. And they trust #Bitcoin and love crypto. Blackrock’s $9.5 trillion AUM would leak to digital assets if they didn’t do something,” CMCC Crest’s Managing Partner Willy Woo said.

“For every Charlie Munger[savvy investor, with an estimated net worth at $2.6 billion on the day of his death in November last year] – God rest his soul – who passes away, that money is finding its way to Gen Z and Millennials, and they feel much more comfortable with digital gold than old, clunky gold,” Novogratz told Bloomberg.

Millennials will hold five times as much wealth by 2030 than at the start of the decade largely due to inheritances, according to Coldwell Banker. They are estimated to inherit over $68 trillion and will need to invest this money.

At the moment, some 58 percent of US households hold stocks. As for cryptocurrency ownership, this figure has risen to 40 percent among American adults in 2024, up from 30 percent in 2023, an online survey carried out among 1,001 American adults by Security.org shows. Three-quarters of these investors hold Bitcoins, just over half own Ethers, while a quarter hold Dogecoins in their crypto portfolios.

It’s worth noting that American women are increasingly turning to crypto assets. Almost 30 percent held crypto assets this year, compared to 18 percent in 2023. A majority of USinvestors who don’t hold any digital assets intend to or at least consider buying cryptocurrencies in 2024.

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