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Bitcoin and the broader blockchain industry have captured a lot of attention in recent months and years. Cryptocurrencies are now more mainstream than ever, thanks in part to their astounding price success and acknowledgement from respected institutions all over the planet.
However, if you look closer, you’ll see that’s a bit of an exaggeration. Going universal means that everything is well-known and common in all populations. Is this so with Bitcoin? Latest news, however, would say otherwise.
A few months ago, Blockchain Capital conducted a survey and discovered that 56 percent of people in the 18-34 age group and 57 percent of people in the 35-44 age group responded in the affirmative when asked if Bitcoin would be used by the majority of people in the next ten years. What exactly does this entail? That is, the younger generation is more positive about the prospects of cryptos, which is consistent with polls that show the same age is the asset class’s most vocal supporter.
Although what the results mean in the short term is often emphasised, what this suggests in the long term is frequently overlooked. Over all, the results indicate that inflows to Bitcoin and other cryptocurrencies are very likely to increase dramatically over the next 10-15 years.
The same was highlighted by Ecoinometrics’ latest report, with the same finding that in the next decade or so, “the large bump of people who are currently aged 20 to 40 years old are going to move into the age zone at which their income is expected to peak.”
Simply put, the group most interested in Bitcoin and cryptos would have higher earnings and, as a result, more funds to spend in the asset class in 10 years or so. Indeed, one might argue that even though they do not have high incomes, many people in this age group would want to invest in cryptos because their interest in conventional financial institutions and markets is at an all-time low.
Just wait, there’s more. Although rising wealth will be a factor in the near future, so will inheritance. In what will be the greatest generational wealth transition in history, the highlighted population is projected to inherit up to $68 trillion. With millennials estimated to have five times their current income by 2030, they will be the wealthiest generation after the Baby Boomers.
Consider this: $68 trillion. Bitcoin’s market value was just under $1 trillion at the time of publication, even less than Gold’s market cap of $10-$11 trillion. No one wants these millennials to spend all of their wealth in cryptocurrencies, but it is worth considering the business effect if this age demographic spends only 5% of their money in this asset class.
With such large amounts of new investment entering the economy, the prices of cryptocurrencies such as Bitcoin will surge, bringing the total market cap similar to that of gold. As a consequence, in many respects, rather than systemic entry, this may be the single most significant determinant of the market’s fortunes.
This claim is reinforced by another result in Blockchain Capital’s crypto-adoption study. According to the same, we have crossed the “learning phase,” with the “conviction phase” gaining popularity lately. We will soon be in the “adoption phase,” which means greater inflows into the industry as a result of increasing recognition, due to a variety of factors such as institutional entry, generational capital changes, and shifting demographics.
However, when discussing age groups and shifting trends, it is worth noting a recent FCA survey that reported that young traders are trading in Bitcoin for the “thrill.” According to Panxora’s Gavin Smith, such a broad statement is erroneous. He explained,
“…. the younger generation of investors is hungry for information and knowledge that will help them manage the risk in their portfolios, unlike older generations of investors who often rely on a 3rd party to make their decisions for them. There are a number of studies that show the time to invest in riskier assets is when an investor is young because they can carry losses for longer if the investment performs poorly for a while.”
As a result, it should come as no surprise if changing demographics surface as the next huge tailwind for Bitcoin and the rest of the crypto-market.