Blockchain Boomers — The Next Wave of Retail Investors?

Among certain internet investment communities, ‘boomers’ have become both an ironic meme, and the struggling millennial's financial bogeymen. But with decreasing barriers to entry, boomers could be about to bring greater prosperity to the blockchain space. For now though, they’re still waiting in the wings.

The Boomer Generation

Baby boomers are the generation preceding ‘Generation X’, generally accepted as being born during the mid 1940’s — 1960’s.

Born in the decades following the devastation of the Second World War, boomers have often been seen as a revolutionary force for progress; ushering in libertarian and pioneering ideals such as Woodstock, the Civil Rights and Environmental Movements — and of course the first moon walk.

A sizable transect of the Western population to say the least — in the UK alone boomers account for 80% of individual wealth, buy 80% of luxury cars, and splash out on over 80% of all cruises. In the U.S. the situation is much the same. There are over 77 million baby boomers, controlling over 70% of the total disposable income.

In the tech industry, there’s a few boomers who may be worth mentioning. Tim Berners-Lee, the engineer and pioneer who invented the internet, Steve Jobs, co-founder and CEO of Apple, and Bill Gates, founder of Microsoft, were all born in 1955 — which places them right in the middle of our baby boomer demographic. Born in 1964, even Amazon boss Jeff Bezos scrapes into the baby boomer generation, and the creative force these and others of their generation have brought to the technology industry is profound to say the least.

By 2030, every single boomer ever born will be over the age of 65, shifting the population demographics so dramatically that in the U.S. at least, boomers will for the first time outnumber children. Now, even in retirement, baby boomers are revolutionizing our demographic landscape.

So with the next major libertarian revolution in sight — the blockchain financial revolution — will baby boomers rally once again and take center stage at the nexus of huge societal change?

The Boomer’s Safe Space

Safe spaces are more commonly associated with ‘Generation Z’ than baby boomers. But whether they care to admit it or not, boomers have got some safe spaces of their own.

Having been the most affluent demographic during the extended bull market through the 1980’s, many boomers are familiar and comfortable with traditional investment vehicles and asset classes.

Nostalgic memories of the historically high-return bull era have made boomers far more predisposed to investments in equities, bonds, REITs, and divided paying stocks.

With a penchant for balanced portfolios and safe, steady growth, boomers have found their financial safe spaces in financial instruments backed with real assets, and eye the blockchain industry with extreme caution.

Indeed, just 95% of boomers already aged 65 or over agreed that they would rather risk $1,000 in stocks than Bitcoin, as opposed to almost 30% of millennials who would invest their $1,000 in the leading digital currency.

That’s not to say baby boomers are unanimously dismissing the blockchain industry. Almost seven percent of Bitcoin is already owned by boomers aged 55 and over, and with new developments in the blockchain market, this figure looks likely to increase.

Institutional Offerings

Whilst ‘boomers’ may indeed be waiting in the wings to enter the blockchain space, they’re doing so excruciatingly patiently.

To a generation know for their financial fastidiousness, blockchain is a new upstart yet to prove it’s worth — or it’s security for that matter.

But new offerings from trusted financial giants are adding another layer of legitimacy to crypto markets — and baby boomers are taking notice.

Several financial giants are leading the charge. Intercontinental Exchange (ICE), the holding company which owns the largest stock exchange in the the world — the New York Stock Exchange (NYSE), have recently announced they are launching their own global digital asset trading network in 2019, called Bakkt — bringing trust and utility to blockchain assets.

This move, which could even allow integration of digital assets into 401(k) retirement plans and IRA markets, is backed by industry giants Microsoft and Starbucks. With a track record of offering the leading equities, options, ETFs and OTC markets, familiar and trusted financial instruments, ICE’s move in to blockchain could be the green light boomers have been waiting for to invest in digital assets.

Likewise, Fidelity Investments, the multinational financial company with $2.5 trillion assets under management, have confirmed they will be launching their own blockchain exchange.

Aptly named Fidelity Digital Assets, the fund is primarily aimed at enterprise-grade investors, and through hedge funds and market intermediaries, boomers can similarly gain exposure to Fidelity digital asset trading.

However, other leading financial institutions have thrown cold water on crypto assets. Recently, JP Morgan Chase analysts remarked that the value of cryptocurrency remains ‘unproven’, predicting that Bitcoin could decline further to trade below $1,260 this year.

Likewise, institutions offering Bitcoin futures contracts, such as the Chicago Board Options Exchange (CBOE) have noted than open contracts on Bitcoin futures are at their lowest point since trading commenced — likely due to the declining bear market throughout 2018 — early 2019.

Conclusion

Despite the prolonged bear market, it’s becoming easier than ever to diversify investment portfolios to include digital assets. The technical barriers to entry for the older generation, through trusted third party custodians such as Fidelity and Bakkt, have never been lower.

Although entrusting decentralized digital assets to third party institutions is somewhat contradictory, such avenues are making it easier than ever to invest in digital assets, and boomers may find it increasingly hard to wait in the wings any longer.

Fear of Missing Out (FOMO) from the baby boomer generation could be a huge boon to the digital asset market, with platforms such as Bakkt and Fidelity ushering in a new wave of retail investors in the blockchain space — and 2019 could see a vastly different demographic of blockchain investors.