The value of Bitcoin (BTC) has surged by over 80 percent since early October and it looks set to continue to rise above the $20,000 as the global economy continues to be plagued by the COVID-19 pandemic, though numerous clinical trials for a coronavirus vaccine have shown encouraging results.
With Bitcoin and many other lesser-known cryptocurrencies holding their momentum while stocks and hard currencies plummeted, more people than ever are investing in these digital assets.
Baby Boomers Investing in Crypto
Prior to the pandemic, most crypto investors were Millennials or members of Generation X, but since March, many Baby Boomers have invested in Bitcoin and other cryptocurrencies.
Specifically, Boomers in the US have increased their crypto investments by around 1000% in the last 8 or so months, according to a recent survey by Mode, a Bitcoin buying and banking app.
This increase in the popularity of Bitcoin as an investment sounds somewhat counterintuitive, as people usually invest in safe-haven assets in times of economic turmoil – and digital currencies are known to be notoriously risky and volatile.
However, there is some sense in investing in crypto amid the global pandemic and the economic fallout it has brought about.
Janis Legler, Mode Banking’s chief product officer, described this development as “extremely promising for the growth of the industry” and said there are many reasons why Boomers and other generations have doubled down on their crypto investments this year.
“We believe these to be very interesting findings, and although the reasons for this could be manifold, they could potentially reveal an unprecedented change in the way investors think today, as a result of the global pandemic,” Mr. Legler said.
For example, the COVID-19 pandemic has highlighted the vulnerability of the traditional banking system and the broader global economy, so it’s not surprising that many people are investing in the decentralized alternative.
Furthermore, the pandemic, coupled with other political developments of 2020, has reduced many Americans’ trust in the government. Again, this makes a decentralized asset like Bitcoin more attractive.
Another potential explanation for the surge in Bitcoin investment by Boomers and other generations is the record low-interest rates which were introduced in a bid to stimulate demand in the economy. These very low rates of interest make saving very unattractive, as savers are only paid a negligible return by the banks.
So, many people who were previously happy to just put their money in a savings account and earn a few percent each year have since switched to more active and riskier investments, such as digital currencies.
A Quick Summary
- Bitcoin’s value has jumped by over 80 percent since early October and it looks set to break the $20,000 mark in the coming weeks if the upward trend continues.
- Amid the global pandemic, Baby Boomers have increased their crypto investments by ten-fold, while other generations have also doubled down on their crypto holdings.
- There are many reasons why people are now investing in Bitcoin and other digital currencies more than ever before.
- For example, the pandemic has reduced trust in the government and highlighted the vulnerability of the global economy, so people are understandably looking to hedge their bets by investing in decentralized assets like Bitcoin.