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Wednesday, December 2, 2020

Data Suggests Bitcoin Price Will Rise as Investor Demographics Shift

Bitcoin (BTC) has been trading sideways for about a month now and has been outperformed by several other altcoins like Ether (ETH) and Chainlink (LINK). The cryptocurrency also hit the lowest quantities of volatility since November 2018. 

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Moreover, Bitcoin’s trading volume in it’s USDT and USD pairs has decreased by 56% and 44%, while global crypto trading volumes in June are down by 49.3% as well, in accordance with CryptoCompare.

While some point to these key facets as the beginning of a downtrend in Bitcoin price, you can still find a few bullish scenarios to appear out for. A recent report by Stack Funds discovered that a shift in investor demographics might soon bring the price of Bitcoin to new highs. 

Utilizing data from Coindance, the report found that 50% of Bitcoin investors are millennials. Given that wealth transfer between generations is going on at a faster rate, Stack Funds believes millennials’ newly-found financial freedom may lead this younger generation of investors to place heavy buy pressure on Bitcoin. 

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The report reads:

“As the millennial generation enters into the peak age of investment maturity, we believe this tech-savvy group would propel the significant shift in investors demographics, in turn, increases the propensity of bitcoin investments.”

Bitcoin ownership by age group

Bitcoin ownership by generation. Source: Stack Funds

Are Boomers buying Bitcoin?

The report also points to growing interest in Bitcoin and digital assets among other generations, a phenomenon which can further cement Bitcoin’s position as an investment asset class. 

According to a survey of Canadian citizens, ownership among baby boomers (56-76 years old) has recently tripled. Similar results were within a recent research paper by the UK Financial Conduct Authority (FCA), which found that Bitcoin ownership by people above 35 yrs . old increased significantly. 

The shift in investment power to newer generations, and the growing interest in Bitcoin for older investors, may help push Bitcoin price to new heights. However, institutions will also play a significant role as they might provide the most accessible on-ramp for new retail and institutional investors to invest in Bitcoin. 

According to the report: 

“In our conservations with investors, we noted that part of this buying pressure reflects parents from gen X and baby boomers who are looking to invest long term for their children’s future.”

Currently, there is no shortage of alternatives for institutions of sorts to have involved and the same could be said for anyone looking to invest their retirement in BTC.

Younger investors are drawn to socially responsible investments

A recent survey from Morgan Stanley showed that over 80% of investors are looking to purchase a socially conscious manner, meaning, they prefer to put their money into projects that can produce a positive effect on the world and society.

Along making use of their greater aptitude for technology, millennials also display an elevated concern around social dilemmas like discrimnation, climate change, and possibly financial inclusion might soon become one their points of focus. 

Given the potential of cryptocurrency to handle many of the dilemmas millennials find problematic with the current financial industry, buying Bitcoin as a new asset class ticks all the right boxes.

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