Without a doubt blockchain technology and cryptocurrencies have grabbed the attention of younger more tech-savvy individuals. When shopping, gambling and even ordering your food is all done online it is not a big leap from there to “getting” a digital-only currency.
However, there is a lot of investment capital that is held by wealthy baby boomers, people who have established businesses, property portfolios, and multi-channel disposable income.
Mike Novogratz, CEO of financial services and investment management firm Galaxy Digital, believes the next Bitcoin bull rush will come from this market segment.
Bitcoin Gets the OK from Boomers
During an interview at Reuters Digital Assets Week Novogratz sang the praises of the so-called Boomer generation as the next big wave in cryptocurrency adoption.
His position is that while Boomers, those born between 1946 and 1964, are slower to adopt new technology and investment opportunities they are willing to invest more heavily than any other market segment once the new investment vehicle has generated a provable track record.
He was not shy in predicting just how sizeable an investment Bitcoin could receive saying:
“It could be as much as a trillion dollars comes over the next year from that giant group of wealth.”
As it seems Novogratz is not alone in this estimation, well-regarded US middle-market investment bank JMP Securities went on record with an investment figure of closer to $1.5 trillion. This was because US wealth management funds valued at more than $30 trillion still do not include any Bitcoin investments, a fact that they are in the process of rectifying.
Why This is Happening in 2021
No one can argue that Bitcoin has proven itself to be an incredibly valuable asset and that it has been the driving force behind most of the current engagement and adoption of blockchain technology. Yet this is not why digital currency is set to become the hottest new investment sector for Boomers.
Mature investors are generally deeply tied to institutional investment firms and banks, the recent announcements by Morgan Stanley, Goldman Sachs, and Deutsche Bank that they will be offering customer access to Bitcoin is a game-changer.
There was also the statement by Al Kelly, CEO of VISA, that Bitcoin will become “extremely mainstream”, which is why they are working to make Bitcoin-transacting available at 70 million VISA enabled stores around the world.
According to Novogratz, there is a deep-seated concern about the current state of the US economy and the overprinting of fiat notes:
“If you’re worried that the U.S. is printing too many dollars … you’re going to shift some of your savings into bitcoin.”
More mature investors have weathered several economic storms during their lifetimes and had been raised hearing about those faced by their parents and grandparents. Much like gold was once seen as a safety net against governmental mismanagement, so Bitcoin has become the new “digital gold” of this era.
The culmination of these doubts, institutional access and proven value has been the tipping point for shifting trillions of dollars from traditional investment vehicles into digital assets.