The U.S. Baby Boomers.
They certainly garnered a lot of attention. No generation had as much impact upon society, for better or worse, than this group. Of course, their work is not done as there are still millions in the labor force, occupying powerful positions.
One thing they were able to do is amass a great deal of wealth. It is estimated that, as they die off, around $83 trillion will be inherited by their GenX and Millennial kids. That is a lot of cheddar moving around.
Boomers were born between 1946 and 1964. The first wave is turning 78 this year. What we are seeing is the first part of this generation is starting to die off.
These circumstances present an enormous opportunity for cryptocurrency. Here we have the technological advancement combining with demographics.
Generated using Venice.ai
The Perfect Storm: $83 Trillion Wealth Transfer
When looking at this, we start with the demographics.
What do we know about the Baby Boomers? Overall, as compared to later generations, they are technology averse. This is especially true for the first half.
In looking at the statistics, we know the Boomers are not major adopters of cryptocurrency. It is something in line with most technologies; this group is not really the trailblazers.
Much of this makes sense. A fair portion of their lives were spend with technological change being rather slow. Sure, there are societal improvements through different products such as mobile phones, cameras, and VCRs. All of these impacted how we worked and were entertained.
That said, it is nothing compared to what we are dealing with today.
Even when it comes to money, the Boomers are likely to utilize credit cards. They did not, however, jump on payment apps such as PayPal or Apple Pay. Cryptocurrency is following a similar path.
Naturally, the second half of the Boomers are a bit more tech savvy. They embraced computing earlier, putting up less resistance. Nevertheless, they are still trailing the ensuing generations.
Here is where the perfect storm is being created.
The Tokenization Of Everything Plus Wealth
We have long discussed the tokenization of everything. This is a concept that is starting to emerge as we see the onset of real world assets being tokenized.
It will take a while before this becomes the norm. Time is not, however, the friend of the Boomers.
Here is what the present situation looks like for this generation:
Based upon the current pace, over the next 5 years, 10.5 million Boomers will depart. It is actually a bit higher since the deaths per day accelerate as time passes.
Where does all that money go?
Essentially, we are looking at the money shifting from those who are not crypto friendly into the hands of those who could be.
The impact of this could be enormous.
“The inheritance of baby boomers’ wealth is not only the largest transfer of assets in world history; it will also have a transformative effect on female and next-generation inheritors. Wealthy donors will pass a staggering $18 trillion, roughly equivalent to the annual GDP of China, to beneficiaries by 2030.”
We know all of this is not cash. It is an assortment of assets that are being passed on. We also cannot forget the government will be there with its hand out, looking to take what it can.
The point is we are dealing with a large sum. How much of this could end up in crypto related assets? Considering that many within the younger generations do not trust the stock market, we could see the holdings of mom's holding of Coca-Cola for Bitcoin.
To give us an idea of how big this can be, the entire crypto market capitalization, according to CoinGecko, is $2.5 trillion. What if, over that time, $1 trillion in cash flowed in? Do you see the impact on the total pricing?
It is a situation where money is flowing into already existing assets. This is nothing more than buy demand. It is separate from venture capital or other money invested for development and business building.
When dealing with situations like this, it is best to look at things through the eyes of the applicable generation. Millennials and GenZ look at investments much different than the Boomers.
This is going to have a major impact. My guess is cryptocurrency benefits a great deal.
It is a perfect storm.