HargaRumah: Crypto Boom Coming as Boomers Pass the Torch 📈

Sabtu, 13 Juli 2024

Crypto Boom Coming as Boomers Pass the Torch 📈

*|MC:SUBJECT|*

Time to rise and shine with Mad Mike!

The early bird gets the CPI print, which came in soft on Thursday, falling 0.01% on the month - below expectations.

Here's where we ended the week👇

Bitcoin (BTC): +4%
Ethereum (ETH): +7%
Solana (SOL): +8.5%
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The crypto market finally found its footing after a few weeks of selling pressure, ostensibly due to Germany offloading BTC and Mt. Gox repayments.

However, this was merely background noise. My focus has been elsewhere.

I don't believe the crypto community has fully priced in the Supreme Court's overruling of the 1984 Chevron decision, which limits federal agencies' control. This decision directly impacts the SEC, an agency that oversees much of the crypto industry

With this change, the regulatory landscape for crypto could shift significantly, reducing the SEC's power. The overruling has profound implications for the industry and could lead to major changes in how crypto is regulated and developed.

Add this to the so-called "Great Wealth Transfer," (the focus of this week's update), and you have a recipe for a long-term crypto meltup.

The Great Wealth Transfer

A lot of money will be changing hands over the next twenty years. A few people will benefit immensely, while the majority will be left trying to make ends meet as the Fed continuously devalues the US Dollar.

Personally, I know for a fact there's a very good chance I'll be inheriting a Toro lawn mower—but this isn't just any Toro—it's a Personal Pace All-Wheel Drive.

But enough with the subtle flexes. Here's where the wealth lies today:

The big focus here is the Boomer generation (1946-64), who account for half of all American wealth today.

So, where do Boomers park their millions?

The factors contributing to Boomer's wealth—high purchasing power, stable jobs, affordable housing, and strong stock market growth—either no longer exist or won't be available for future generations.

Because of this, younger generations are looking for alternative ways to find alpha.

This week, we rifle through a few reports to determine the Great Wealth Transfer's impact on the crypto markets. Let's go!👇

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Where Is the Money Going?

Bank of America recently released its 2024 Private Bank Study of Wealthy Americans. The bank defines a wealthy American as having over $3 million in investable assets or owning a Toro Personal Pace All-Wheel Drive.

Focusing solely on this group of Americans reveals that Boomers hold an even larger share of wealth:

So, where do young investors see opportunities?

Here's the generational paradigm shift about to take place in finance. 👇

Crypto is the second most popular investment class for young affluent investors after real estate. While stocks are the #1 investment choice for older Americans, they fall to the 9th choice for Americans aged 21-43, putting domestic equities below private equity and even fixed income!

Seems crazy, right? I had to read that report twice. But the fact is young people no longer believe in the old stock/bond mix.

Here's a poll showing whether the two groups believe it is no longer possible to achieve above-average returns using traditional portfolios:

The reason for this loss of faith amongst younger Americans is threefold:

Market Conditions: High stock valuations and low bond yields have diminished expected returns from traditional investments.
Emerging Alternatives: Younger investors turn to cryptocurrencies, real estate, and other alternative assets for higher returns.
Trust and Preferences: This shift is driven by a growing skepticism of traditional financial systems and a preference for ESG and innovative investment options.

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And younger people hate stocks, with a passion. This visual pulled from the report shows the two groups' allocations by self-identified risk level.

To dive deeper into the crypto component of the Great Wealth Transfer, we turn to a Galaxy Research report showing the current level of crypto ownership.

American Boomers hold a mere $45 billion in crypto today, while American Millennials dominate with $295 billion—an astonishing 556% more.

Once that $78 trillion effortlessly slides into younger generations' ownership, where do you think that money will go?