It’s hard to say as a millennial, but boomers are doing crypto better. According to a new report from Bybit and consumer research firm Toluna, they are taking research methods used in traditional markets and applying them to crypto projects.
The report says that 34% of boomers spend “several days” doing their due diligence on a project before investing, 50% more than other generations. Furthermore, “64% of North American investors spend less than two hours or do not DYOR at all.”
Boomers are also more likely to focus their research on technical factors such as tokenomics, revenue and competitor landscape. Contrast this with his younger compatriots, who value more influential elements like a charismatic founder and “website aesthetics”.
This shows that owning digital and cryptocurrency is not as big of an advantage as people think. It really pales in comparison to some of the Warren Buffet-style skills old investors have acquired over the years.
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Perhaps boomers are more likely to be retired and therefore have more free time than younger generations. It’s hard to say, but the best way forward for young people is to be humble and learn from the old.
While cryptocurrency has many unique properties that distinguish it from other capital markets, there are enough commonalities to allow for a decent crossover in analytical skills. After all, the price of digital assets depends very much on the balance of market supply and demand, just like traditional markets.
Examining the technical aspects can prevent bad decisions that lead to huge losses in 2022. Several times I’ve felt pretty good about buying a token based on a project’s white paper and the strong narrative pushing it, but upon further research, I found out. , so much venture capital was coming in that the selling pressure would affect prices for years to come.
Boomers accustomed to crunching company numbers and calculating price-to-earnings and price-to-earnings-growth ratios can apply those skills to CoinGecko or CoinMarketCap data. Younger generations need to learn why “circulation supply” and “max supply” are important and why volume is important.
Indeed, crypto projects that resemble traditional value investments have held up relatively well in a bear market. Investors have become more sanguine about the difference between protocols that issue tokens as a glorified fundraising method and protocols that generate revenue and share it with owners. So-called “real income” crypto-projects are no different from dividend-paying companies – something boomer investors will be familiar with and perhaps drive some investment decisions.
This is not to discount the importance of narrative and community, especially in modern investing and cryptocurrency. For example, decentralized permanent trading platforms such as GMX, Gains, and ApeX Pro benefited from the pro-decentralization sentiment following the FTX crash.
Exploring this aspect requires a good knowledge of social media, especially Twitter, which is one of the main ways to access well-known analysts, founders and degens of cryptocurrency. Investors use these tools to find narratives, assess where the narrative is in its lifecycle, and gauge market sentiment in general.
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But Millenials and Gen Z aren’t really dominant when it comes to using social media to gauge trends because it’s no longer new. This is Web2 and everyone already knows how to use social media. In fact, young people turn their exposure to social media to a negative by overvaluing it as a research tool, while boomers stick more to the facts.
Traditional investment due diligence continues to separate the men from the boys, as it has throughout history. As long as the boomers will outpace the younger generations because they do more research and are more patient when it comes to investing, which leads to higher returns than the younger generations who may jump into investing without fully understanding what they are getting into. enter. If you’re looking for someone reliable and knowledgeable about due diligence, look no further than your parents or grandparents.
Nathan Thompson He is the lead tech writer for Bybit. He spent 10 years as a freelance journalist covering mainly Southeast Asia before switching to crypto during the COVID-19 lockdowns. He holds joint honors degrees in communication and philosophy from Cardiff University.
This article is for general information purposes and should not and should not be construed as legal or investment advice. The views, opinions and opinions expressed herein are solely those of the author and do not reflect or represent the views and opinions of Cointelegraph.