Bitcoin Has Replaced Gold For Younger Investors, Says Finance Professor

Bitcoin Has Replaced Gold For Younger Investors, Says Finance Professor

Bitcoin has now solidified its position as the digital gold, especially for young investors. It has outperformed gold for years now and has grown way ahead of the inflation rate, making it one of the most preferred forms of investors for those who want high enough returns to combat inflation. Basically, it has been slowly but surely becoming the holy grail for investors.

For younger investors, it has been easier to get into bitcoin than the older generations. This is partly due to being more adept at technology, as well as the barriers of entry when it comes to investing through traditional methods. This is why it is now one of the leading investments for Millennials and Gen Z, who have now adopted BTC as the new gold.

Inflation Helped Bitcoin Replace Gold

One of the major reasons behind the rapid adoption of bitcoin by investors has been the high rate of inflation. Currently, the inflation rate for the United States is reportedly at 6%, and with bitcoin’s year-over-year returns over 70%, it has proven to be, by far, the most effective inflation hedge.

Wharton School finance professor Jeremy Siegel shared some thoughts around the adoption of the digital asset by the younger generations of investors. These investors have taken to bitcoin like fish to water and its growth has greatly influenced the decisions to get into the market.

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

Additionally, gold has been performing poorly and the last year marked one of the worst for the asset as it dropped around 5%. This performance has proven gold to no longer be an effective inflation hedge as was witnessed in the 1970s.

“I think that the story of gold is a fact that the young generation is regarding Bitcoin as the substitute,” the professor added.

Young Investors Flock To Digital Assets

The rate at which younger investors are investing in bitcoin and other cryptocurrencies have been growing over the years. A report from four years ago showed that about 30% of millennials surveyed said that they preferred to invest in BTC, citing things like its limited supply and growing demand.

By December 2020, it had risen to two-thirds of all millennials that said they preferred digital gold, according to a survey from deVere. Today, this number has grown significantly.

A CNBC survey from the end of 2021 showed that more than 50% of all millennial millionaires held at least half their wealth in cryptocurrencies like bitcoin, with plans to add to their positions as time goes on.


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