Time for the Big Question: Will You Grow Old With Bitcoin

If you thought that cryptos were young people’s playthings, it is time to reconsider your stand!

More people in the US now than any other moment in the past are shifting to cryptos to help in funding their retirements. This is happening even in the current market volatility that is reminding us that the crypto world can be pretty unpredictable. 

More People Considering Cryptos as Part of Retirement Plan

About 27% of Americans between 18 years and 60 years (about 50 million) have owned or traded cryptocurrencies in the last six months, according to a poll published last week. 

Notably, the older generation is more devoted to the new asset class compared to the general population. According to the survey conducted in March 2022, about 28% of those aged over 50 years and above are looking to cryptos as part of their retirement plans

The most popular reason for going crypto is that people consider them as the future of finance and did not want in any way to miss a hot trend. They also consider cryptos as a good way to diversify investment portfolios. 

The recent market turmoil has muted the talk that cryptos could easily win mainstream acceptance as part of pension plans. Experts are saying that even if cryptos should be adopted, only a small portion should be considered. “If they (investors) want crypto, it should be a very small allocation of their portfolio, and they should be prepared to lose it,” said Erik Knutzen, chief investment officer for multi-asset class strategies at Neuberger Berman.

Retirement Schemes Going Cryptos, but Caution is Very Important  

Now, Bitcoin is trading at around USD 30,000, which was a down shot of about 60% from a peak of USD69,000 in November 2021. This meltdown is an indication that a lot of newcomers are already in the red. However, analysts are watching for any indication of Bitcoin bouncing back. 

According to JP Morgan’s Nikolaos Panigirtzoglou, the dip reported last week was an excellent moment for newcomers and long-term investors to join, 

Another survey of 11,000 adults done by the Federal Reserve established that 12% of Americans are already in cryptos. Although the survey did not provide a breakdown based on age, over 50% of those holding cryptos for investment make more than USD100,000 in monthly earnings. 

In April, Fidelity Investment caused a stir online after announcing that people will be able to allocate part of their retirement savings for Bitcoin via the 401(k) investment plan.

“Fidelity always operates and makes decisions with the highest level of integrity and an unwavering commitment to our customers, including those saving for retirement,” the Fidelity spokesperson said. 

The general argument is that cryptos are highly volatile to put into retirement kitties. Unless you are sophisticated enough or willing to take a huge loss, it is better to take a precautionary approach.

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