Since the creation of Bitcoin as an alternative type of currency in 2009, more cryptos have created a huge divide among the generations. Older investors are mistrustful and prefer sticking with the traditional category of assets, such as gold, real estate, and stocks. However, millennials who were born between the 1980s and 1995 are embracing digital assets even more.
50% of Wealth for Half of the US Millionaires in Cryptos
The confidence is paying off. Early adopters of digital currencies have raked huge fortunes as the price of Bitcoin, Ethereum, and other top coins skyrocket. In the latest CNBC millionaire survey, 53% of the US millionaires have about 50% of their wealth in cryptos.
In the survey, 83% of millennial millionaires own cryptos. However, only about 4% of baby boomers, call them older millionaires, hold cryptos in their portfolios. In his view, Mike Novogratz of crypto firm Galaxy, the resistance to changes is waning among the older investors. Novogratz suggests that digital assets are likely to add USD 1 trillion in 2022 alone as crypto products become more available to wealthy clients.
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Unlike in the past, when cryptos were new and little was known about them, private banks, trading platforms, and wealth managers are providing access to digital assets investing. Today, leading names in the financial sector, such as Goldman Sachs, State Street, Barclays, Wells Fargo, and BBVA Switzerland, are all getting into cryptos.
However, concerns about the risks of crypto assets abound. According to CipherTrace, crypto scams resulted in USD 1.9 billion for investors in 2020. Terrorist financing and money laundering concerns have also been raised.
In the UK, the Financial Conduct Authority (FCA) has warned that most crypto-related businesses do not meet the standards set for anti-money laundering standards. About 30 firms in the UK have successfully registered with FCA to allow them to operate legally in the country.