Over $6 Trillion from Inheritances Could Flow into Crypto in the Next 20 Years: VanEck

Matthew Sigel, the Head of Digital Assets at VanEck Investments, predicts that more than $6 trillion from inheritances could be directed into the crypto market over the next two decades. Citing the 2024 study by Bank of America Private Bank, Sigel notes that Millennials, GenX, and future generations might inherit $84 trillion from seniors and Baby Boomers by 2045.

He estimates that young US investors, aged 21-43, will inherit a total of $42 trillion from Baby Boomers and potentially redirect 14% of this inherited wealth into cryptocurrencies, resulting in a total inflow of $6 trillion. Consequently, Sigel anticipates that young investors will continue to invest $300 billion annually into crypto over the next 20 years.

The study revealed that young investors, categorized as aggressive, invested 14% of their portfolios in cryptocurrencies, while moderate and conservative young investors allocated 12% and 17%, respectively. Bank of America highlighted this finding, noting that “the most conservative group maintains the highest average crypto exposure.” In contrast, investors aged 44 and older exhibited minimal crypto allocations in their portfolios.

Crypto as a Major Growth Opportunity

The Bank of America report indicates that 28% of investors aged 21-43 believe cryptocurrencies present a significant growth opportunity. The report also states that after real estate, crypto investments have the second-highest investment rate among young investors, favoured by 31% of this demographic. Interestingly, private equity follows, with 26% of investors preferring cryptocurrencies.

In contrast, only 4% of investors aged 44 and older consider cryptocurrencies as offering the greatest growth potential, placing them second to last on their priority list.

Bank of America pointed out that the differences between younger and older investors go beyond mere allocation to cryptocurrencies or private investments, indicating deeper shifts. The bank highlighted that 72% of young investors believe traditional stocks and bonds no longer offer above-average returns. In contrast, only 28% of investors aged 44 and older share this view.

The Bank of America also speculated that young investors’ interest in cryptocurrencies might be driven by uncertainty. It noted that many in the crypto industry compare crypto to traditional investments like gold and that, from certain perspectives, crypto may appear surprisingly risk-averse to young, affluent individuals.

Adoption of the Crypto Market

As Bitcoin and other altcoins continue to penetrate the market, the acceptance of digital assets among a broader group of investors has increased. Moreover, the introduction of regulated investment products like ETFs is likely to attract more investments into the crypto space. At the time of writing, Bitcoin was trading 0.42% higher at $57,441, with a market capitalization of $1.132 trillion.