Bitcoin-based investment has made its way into the portfolios of the youngest investors, as millennials allocate a part of their retirement to Bitcoin-based stock.
Millennials Allocate Funds to Different Asset Mix
Analysis of self-directed brokerage accounts show a generational divide in selecting assets. Older GenX investors have no exposure to Bitcoin (BTC) through financial instruments, but millennials have bought into the Grayscale Bitcoin Trust.
The analysis in the latest Schwab report reveals that the newest generation of investors allocates around 1.84 of its portfolio to GBTC stock, more than is allocated for blue chip companies Walt Disney, Microsoft, and the Berkshire Hathaway fund. Millennials, unfortunately, held brokerage balances of about $68,756, about five times lower in comparison to the size of boomer portfolios. But with one of the greatest wealth transfers in history, more funds can move into a new type of portfolio, with a spot for bitcoin investments.
Earlier investors have put Apple, Amazon and Berkshire Hathaway at the top of their portfolio. But millennials trust Tesla for their top 3 pick, with Amazon and Apple still at the top.
Bitcoin is seen as one of the outliers of the last decade, establishing a new asset class that may have built wealth already for multiple generational cohorts. Once seen as a Ponzi scheme, BTC established itself beyond a mere speculative asset.
Grayscale Price Points to Growing Interest in Bitcoin
The Grayscale fund was recently open to retail investors. For months, the instrument revealed the sentiment of institutional investors, as some were ready to pay hefty premiums to the spot bitcoin price. The overall investment in GBTC is now slightly lower at $2 billion, in comparison to $2.7 billion flowing in during the summer peak of BTC prices.
Currently, each GBTC share once again trades at a premium at $8.01, corresponding to spot prices above $8,000. Bitcoin itself traded around $7,409.
12/05/19 UPDATE: Holdings per share, net assets under management and digital assets per share for our investment products.
Total AUM: $2.0 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $XRP $ZEC pic.twitter.com/PhfaCCLJR3
— Grayscale (@GrayscaleInvest) December 5, 2019
Grayscale remains confident on increased investment interest, as a recent study revealed 36% of investor respondents were interested in a bitcoin-based product.
Our survey found that 36% of U.S. investors would consider an investment in $BTC, representing a potential market of over 21mm investors in the general population.
What else did we learn about individual investors' perceptions about investing in Bitcoin? https://t.co/iLsEx5VvGl— Grayscale (@GrayscaleInvest) December 5, 2019
The research, however, does not account for anyone buying bitcoin outright. Currently, most BTC coins exhibit “hodling” behavior, as they are stashed in cold wallets or kept in custody. Bitcoin products offer immediate gains for price speculation, but owning actual BTC is also a hedge against future instability.
Bitcoin has established a global network that so far shows no signs of censorship. With more than 9,300 nodes and no downtime, the network is capable of carrying vast transactional value, while bypassing banking fees or limitations.
What do you think about millennials’ investment strategies? Share your thoughts in the comments section below!
Images via Shutterstock, Twitter @Grayscaleinvest
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