In my opinion, one of the main obstacles to the mass adoption of cryptocurrency as an asset or as a replacement for traditional systems is the learning curve associated with the nature of the coins.
When looking at who invests in cryptocurrency, I find that there are a few different stereotypes that define those people:
- Those who are genuinely interested in the technology - for example, a cryptographer that is interested in expanding our conception of the modern day banking system or a developer looking to utilize cryptocurrency and blockchain to make their business more accessible.
- Those who are in it for the speculative value - this would be maybe someone who has a decent understanding of what a cryptocurrency is and how it could be useful, but are speculating on what types of crazy valuations that utility can bring
- Those in it for the social aspect or the memes - This would be someone who maybe stacked some sats so they could add to online discourse or bought because their friends did.
- The libertarian-types who want to see the complete overhaul of traditional financial systems and government (maybe I am starting to fit this a bit myself)
- Those who have no idea what they are doing but feel like they have to hop on the trend
Despite the fact that there are many different ways to get involved with cryptocurrency, we are failing as a community to reach a very important demographic: the 40+ year old with no technological experience. This demographic is also usually quite limited in their knowledge on social media and thus only really gets their information on cryptocurrency through mass media (a group that is notoriously harsh on innovation) or word-of-mouth (barring a great salesman speaking to you it probably wouldn't make much of an impression).
In the United States, 62.1% of all wealth is held by people over the age of 40 years. (source) We have to appeal to this group if we want to see larger amounts of wealth to find itself vested in cryptocurrencies.
Now this is not to say that anyone over the age of 40+ does not know crypto; in fact there are probably hundreds of thousands of 40+ year olds that have a much better understanding than myself. This is not a "who knows best" competition however, we must be objective in recognizing the age groups mentioned here have the capital to make major swings happen in cryptocurrency.
So, how do we convince this demographic to invest in cryptocurrency that they may have no knowledge of?
In my opinion, our best bet is to give traditional retirement portfolios an incentive to add cryptocurrency to their mutual funds/portfolios. If Vanguard for example was given some type of incentive such as scraping off a percentage of a yield farming return for the entire fund, they might view those explosive growth opportunities favorably and add to their portfolio.
Of course, a major aspect standing in the way of this is the safety/legality of the process. This is why I believe that regulations may be beneficial in the short term. We need to give the more conservative and risk averse among us the opportunity to invest in the assets of the future with firm footing that they won't get rug-pulled or be moving around unregulated securities. Once there is some type of legal assurance in existence (or even smart contracts that are clearly written and financially binding) we may see larger funds start to add crypto to retirement portfolios. Not every mass fund has a Bitcoin-crazed Michael Saylor leading the way, but they do have intelligent people running the show; intelligent people see the value here and will be more willing to get involved with some assurances that their asses won't be on the line.
I am going to attempt to convince my parents to allocate around 5% of their retirement portfolio allocations to more "speculative assets" like Bitcoin, BNB or Ethereum (who knows, maybe as they get more comfortable we can get them to start yield farming on Cub Finance!). If I'm successful in doing this, I'm sure I'm going to hear a lot of complaints as their funds ride the waves of the market, but hey... That's crypto for you! Wish me luck!
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