Updated: Oct 4, 2020
According to a report by Coldwell Banker Global, Millennials are set to inherit as much as $68 trillion over the next decade. It’s the largest transfer of wealth in history, and in my opinion, a lot of that money is going to find its way into digital assets. In this article, you will learn why I think this is so, why this obvious catalyst has been overlooked, and why you should educate/position yourself to take advantage of this massive incoming wave of fresh capital into a rather new asset class.
Coming from a Millennial with lots of professional Millennial friends and contacts, one thing that I can assure you is that the majority of us place major value on our individual sovereignty. Millennials are a generation that has been molded by recessionary forces. With COVID-19 sending unemployment levels to an historic all time high, Millennials, having already been through a post-9/11 recession and yet another following the 2008 global financial crisis, now face yet another episode of what the Washington Post has identified as “slower economic growth since entering the workforce than any other generation in U.S. history.”
Millennial enthusiasm for digital assets is a function of less risk aversion and tech savviness among younger people. In addition to that, the Millennial generation could see digital assets as an alternative to a volatile economic structure that has repeatedly failed them and their loved ones. With this in mind, it should be obvious that the demographic most likely to be early adopters of new innovation is also the one most in need of an escape route to the freedom and flexibility digital assets can grant.
As the first generation to grow up with digital technology at their fingertips, Millennials have different ways of thinking and operating by default. Technology is seamlessly woven into day-to-day life in a way that feels completely natural. Millennials do everything from ordering food and getting a taxi to finding employment and booking vacations differently from their parents and grandparents. Digital assets factor into this nicely. So Bitcoin (BTC) makes a lot of sense to them, and it’s more natural for them to accept that it has value compared to older generations. However, when you look at how Baby Boomers and Gen-X’s grew up, they were used to being able to hold their assets in their hands (gold, stock and bond certificates). This understandably makes it harder for them to wrap their heads around the idea of placing real value on a piece of software or code. They can’t physically hold it in their hands nor can a financial institution they trust, which is part of the reason why you’ll hear this class of individuals claim that BTC has no real “Tangible” value. Bear with them, eventually they’ll have no choice but to hop on the bandwagon.
Now, I know you’re probably thinking “Millennials don’t have any real money”. Given that the media portrays Millennials as the poorest generation, it makes perfect sense why you would have this belief. The average Millennial has around $30,000 in debt and an average net worth of just $7,000. They make up 23% of the population but only owns 3% of the wealth here in the U.S. However, if you just look at that data alone, you’ll miss the big picture.
Nearly 35% of U.S. labor force participants are Millennials, making them the largest generation in the country, according to a Pew Research Center analysis of U.S. Census Bureau data. Since the beginning of 2020, Millennials have invested heavily into the stock market. They’ve opened more than 3 million new brokerage accounts since January. Their buying (in part) has helped propel powerhouses like Apple and Tesla to new all-time highs. Citing Charles Schwab’s Q4 2019 data, BlockFi found that the publicly listed Grayscale Bitcoin Trust (GBTC) was the 5th largest stock holding for Millennials, behind only Amazon, Apple, Tesla and Facebook, while it wasn’t even among the top 10 for Baby Boomers.
With all of this information in mind, it’s pretty easy to realize that Millennials will be a brand new source of massive demand in crypto, just like they’ve been a massive new source of demand in stock investing. But, just in case it’s not clear to you, lets list a few more enlightening statistics. Today, only 9% of the U.S. population owns bitcoin. But around 50% of those who do own it are millennials. According to a survey by Bitcoinist, almost half of U.S. millennials (ages 24–39) trust cryptocurrency exchanges more than America’s stock exchanges. A report by global research firm Edelman found that about 25% of the Millennials here in the U.S. who earn at least $100,000 in individual or joint income, or own $50,000 worth of investable assets, admitted to either using or holding cryptocurrencies. Further, the report also stated another 31% expressed interest in using cryptos. And studies show millennials prefer to own BTC over gold.
In addition to all of these important statistics, the essential infrastructure is being built to make it extremely easy to buy and sell crypto for the masses, which will be necessary for mainstream adoption. Currently, GBTC is the only fully registered, fully tradable way to buy bitcoin in a brokerage account (outside of futures). (Personally, I recommend buying BTC directly from an exchange instead of GBTC because the trust trades at a 40%-plus premium to the price of BTC). Pretty soon, those same Millennials will be able to buy just about any crypto asset they want directly from their brokerage accounts the same way they’re buying Apple and Tesla now without having to pay a 40% premium like they do with GBTC. That means if buying just stays the same, Millennials will be able to buy 40% more BTC with the same amount of funds.
Furthermore, it was officially confirmed in June that CVS, Rite Aid, and 7-Eleven will roll out BTC ATMs in all of their U.S. stores (20,000 locations total). This will give the massive amount of customers these stores get on a daily basis to buy BTC with cash, without needing a bank account. It was also confirmed in June that PayPal and its subsidiary Venmo plan to roll out direct sales of crypto to its 325 million users. And guess what… The majority of users on both platforms are Millennials!
The Great Wealth Transfer is going to place north of $68 trillion over the next decade or so into the pockets of Millennials from their parents and grandparents. Once this happens, I expect Millennials to invest into what they know and trust, and that is obviously digital assets. Let’s crunch some conservative numbers, If just 20% of the $68 trillion they’re set to inherit goes into crypto ($14 trillion), the entire crypto market could go up 50x. And it won’t be just BTC that’ll appreciate. Just like Google, Netflix, Facebook, and Tesla have all benefited from the surge of Millennial investments, a number of altcoins will also benefit from the massive Millennial buying that’s ahead.
In closing, I recommend that you go and speak with a few Millennials after reading this article. I think you’ll be pleasantly surprised at what you hear. It would be best in my opinion to “Get with the program” and learn about this fascinating technology. Not just to make money, but just to learn and get familiar with it because blockchain technology will undoubtedly play a huge role in shaping our day to day lives in the future. As usual, I’ll end this article with one of my favorite quotes as it pertains to this topic; “The most creative people willing to work in the shadows of uncertainty.”