• Wed. Jun 22nd, 2022

Bitcoin replaced gold for young investors, says finance professor

Bitcoin has now consolidated its position as digital gold, especially for young investors. It has outperformed gold for years and has grown well above the rate of inflation, making it one of the preferred forms of investors for those looking for returns high enough to fight inflation. Basically it has slowly but surely become the holy grail for investors.

For younger investors, getting started with bitcoin has been easier than older generations. This is in part due to greater mastery of technology, as well as barriers to entry when it comes to investing through traditional methods. That’s why it’s now one of the top investments for millennials and millennials, who have now embraced BTC as their new gold.

Inflation has helped Bitcoin replace gold

One of the main reasons for the rapid adoption of bitcoin by investors is the high rate of inflation. Currently, the inflation rate in the United States is said to be 6%, and with annual returns of over 70% from bitcoin, it has proven to be, by far, the most effective hedge against inflation.

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Jeremy Siegel, professor of finance at the Wharton School, shared some thoughts on digital asset adoption by younger generations of investors. These investors embraced bitcoin like fish in water and its growth greatly influenced decisions to enter the market.

The professor told CNBC during a Interview with Squawk Box the fact that bitcoin is an effective hedge against inflation has helped it replace gold in the minds of these young investors. “Let’s face it, I think Bitcoin as a hedge against inflation in the minds of many young investors has replaced gold. Digital coins are the new gold for Millennials, ”said Siegel.

Bitcoin price drops to $41K | Source: BTCUSD on TradingView.com

Additionally, gold has performed poorly and last year was one of the worst for the asset, as it fell around 5%. This performance proved that gold was no longer an effective hedge against inflation, as it was in the 1970s.

“I think the history of gold is a fact that the younger generation sees Bitcoin as a substitute,” the professor added.

Young investors flock to digital assets

The rate at which young investors invest in bitcoin and other cryptocurrencies has increased over the years. A report from four years ago showed that around 30% of millennials surveyed said they preferred to invest in BTC, citing things such as its limited supply and growing demand.

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By December 2020, it had grown to two-thirds of all millennials who said they prefer digital gold, according to a deVere poll. Today that number has increased dramatically.

A late 2021 CNBC survey showed that more than 50% of all millennial millionaires held at least half of their wealth in cryptocurrencies like bitcoin, with the intention of adding to their positions over time. time.

Featured image from Mint, chart from TradingView.com

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