While Baby Boomers own a majority of the USA's wealth (image 1), they have a very small footprint invested into Bitcoin due to their low average sentiment towards the asset. However, over the next couple of decades, Baby Boomers will pass an estimated $70-90 trillion down to younger generations. So, when these younger generations receive their inheritances, what will they do? Will they follow the financial footsteps of their parents and put these inherited resources into traditional investment vehicles - stocks, bonds and real estate? Or, will they venture into crypto, Bitcoin and Bitcoin Mining with their newly found wealth?
To get an idea of where the inheritances will flow, let’s take a look at who will receive the money. Gen Xs stand to receive the most over the next 20 years, closely followed by millennials (image 2). As these younger generations receive an increasing share of the nation's wealth, their investment habits will shape the future of American financial markets.
Between the student debt crisis, housing costs and the shrinking middle class burdening the youth, 75% of Americans aged 21- 42 no longer believe traditional financial vehicles will provide a level of financial comfort their parents once enjoyed. This disillusionment with the American financial system makes the younger generations much more receptive to non-traditional investment vehicles. According to Galaxy's aggregated survey index, Gen X, Millennials and Gen Z are many times more likely to own crypto than Baby Boomers (image 3). While Gen Z survey data is the most inconsistent, FINRA and Coinbase data could be the most credible and suggests rates over one-third (36-39%) to own and/or be interested in crypto. The younger the generation, the more receptive they are to crypto as an investment.
As Baby Boomers distribute their inheritances to younger generations, crypto markets should see an estimated inflow of $10 billion per year. Given that the crypto market’s apex asset represents more than 50% of the total cryptocurrency market, we can estimate that over $5 billion a year will flow from Boomer inheritances straight into Bitcoin.
As discussed in a previous article, Bitcoin is a tool to escape financial hardship and as new investments flow into the asset class and prices increase, the promise of Bitcoin holds up, and further investment is then to be expected. This simple cycle will continue, as Bitcoin acceptance and adoption rates increase. Thus, as investors dive deeper into Bitcoin, they’ll likely discover the investment potential of Bitcoin mining. Bitcoin mining provides investors ownership over an asset that prints Bitcoin – an enticing investment prospect for inheritance bound younger generations.
Gen X
Since Gen X currently has the second largest share of the nation's wealth (image 1), and the second highest real estate ownership rates in the USA, they’re less likely to continue to invest into traditional wealth vehicles and more likely to deploy their inheritances into a low-stress, cash flow generative investment like Bitcoin mining.
Millennials + Gen-Z (M+Z)
Millennials surveyed continue a trend away from owning real estate and towards renting, citing excessive start-up costs, high maintenance costs and a preference for the residential flexibility offered through renting. Gen Z's are even more receptive to this idea than Millennials, citing that renting is less stressful than home ownership. Instead of spending years and thousands of dollars fixing up an old home or struggling to accumulate home equity via an expensive mortgage, M+Z could forgo home ownership altogether and no longer concentrate their wealth in a single, costly and stressful real estate investment. Instead of spending thousands on annual property taxes, M+Z's can hash away and earn Bitcoin without yearly taxes. Instead of managing (potentially problematic) renters, new Bitcoin miners can simply mine into any major mining pool and earn the closest thing to guaranteed, stress free income.
Moreover, Gen Z's who have never known a sane housing market, have developed a disdain towards rent-seeking behavior. The unique appeal of earning money from a protocol rather than financially tight families should present itself as an egalitarian form of income for the increasingly ethically investment conscious generation. Instead of allocating all of their wealth to chipping away at a mortgage, Gen Z’s can rent, invest in Bitcoin and Bitcoin mining to immediately earn equity from their investment.
In conclusion, while the Boomers amassed their wealth from traditional assets, younger generations are exceedingly likely to take new avenues and explore the investment path less taken via Bitcoin. When the Baby Boomers' inheritances cascade, younger generations will funnel billions into the Bitcoin economy, beyond any pre-existing investment strategies, and more than likely find a home in Bitcoin mining – a perfect investment endeavor for younger generations that prioritize stress management and peace of mind. While Baby Boomers may have missed out on the Bitcoin mining train, younger generations have packed their bags and eagerly await their opportunity to actively contribute to the ever-growing Bitcoin mining global hash rate.+
