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Boomer wealth transfer will result in $20tn crypto bid — and push Bitcoin to $600,000

2y ago•

DL News

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Sooner or later, baby boomers will bequeath their riches to younger generations.

And when that happens, you can bet the youth will buy crypto.

That’s according to Noelle Acheson, former head of market insights for Genesis Global Trading.

The wealth transfer could result in $20 trillion finding their way into crypto, Acheson wrote in her newsletter, “Crypto is Macro Now.”

$10 trillion to Bitcoin and Ethereum

Bank of America found in a survey last week that roughly $84 trillion will pass hands from baby boomers to Gen X and millennials within the next 10 years.

And those younger generations have very different investment profiles, the report said.

Only 4% of rich Americans — defined as having over $3 million in assets — over the age of 44 perceived that cryptocurrencies have a greater potential for growth than stocks and bonds.

But 28% of their younger peers said that crypto will outperform such traditional investments.

“If the inheriting class follows the pattern suggested by the survey, 24% of the wealth transfer (28% of the younger group favour crypto over stocks and bonds, minus 4% from the older group) could flow into the crypto market,” Acheson said.

That means that roughly $20 trillion could flow into crypto within the next 10 years.

The market value of the entire sector is $2.3 trillion now, according to CoinGecko — which means the sector could grow tenfold in size.

Of these flows, Acheson estimated that Bitcoin and Ethereum could receive somewhere along the line of $10 trillion, with the rest flowing into DeFi, memecoins, and other projects.

Bitcoin’s market value stands at almost $1.2 trillion, and Ethereum’s is at $402 billion.

Assuming Ethereum’s market value will still be 33% of Bitcoin’s after the wealth transfer, that bid would push Bitcoin to roughly $600,000, and Ethereum to $32,000.

“There is, of course, plenty that could move this needle adversely in 10 years,” Acheson said. “The outlook for crypto could weaken, new alternative asset groups could climb in favour, and so on.

“But, even so, we are largely overlooking the wealth transfer impact.”