A recent report from brokerage giant Charles Schwab shows that there are more millennials holding Bitcoin-related investment products in their portfolios than those holding Netflix stock.
The report released on Wednesday showed that the proportion of Grayscale Bitcoin Trust (GBTC) investment products held by millennials (currently between 25-39) is 1.84%, which is higher than Netflix's 1.58 %. Charles Schwab publishes this report every quarter and collects data from nearly 142,000 retirement plan participants. These individuals currently have between $ 5,000 and $ 10 million in Charles Schwab's personal choice retirement account.
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Compared with Warren Buffett's Berkshire Hathaway, Walt Disney, Microsoft and Alibaba stocks, GBTC's products are also more popular welcome.
Bitcoin is considered one of the outliers of the past decade, and it has established a new asset class that may have accumulated wealth for generations. Bitcoin was once considered a Ponzi scheme, but its current position has surpassed pure speculative assets.
(The top ten types of stock assets held by investors in various eras)
In 2013, Grayscale, a subsidiary of the Digital Currency Group (DCG), issued GBTC to qualified investors, and in 2015 received approval from the Financial Industry Regulatory Authority (FINRA) to issue publicly traded shares.
The fund was recently opened to retail investors. For months, the tool reflected the sentiment of institutional investors, as it can be seen that some institutions are willing to pay a high premium for the spot price of Bitcoin. Currently, GBTC's total investment is 2 billion U.S. dollars, which is slightly lower than the 2.7 billion U.S. dollars in influx of bitcoin price last summer.
GBTC is arguably the most successful cryptocurrency investment product. As of September, its cumulative inflow of funds for the 12 months was $ 304.4 million. Grayscale also applied for a Bitcoin exchange-traded product (ETF) in 2017, but later that year, the company withdrew the application because the Securities and Exchange Commission (SEC) rejected the Winklevoss bitcoin ETF.
To date, the SEC has not approved any Bitcoin ETFs, citing concerns about market manipulation and fraudulent activity. However, some market observers said last month that GBTC and other Bitcoin investment products could lose their appeal if regulators approve the Bitcoin ETF.
Grayscale remains confident of increased investment interest, and a recent study showed that 36% of investors are interested in Bitcoin-based products. However, this study did not consider people who bought bitcoin directly. Currently, most Bitcoins exhibit "hodling" behavior, that is, they are stored in a cold wallet or kept safe. Bitcoin products provide immediate benefits for price speculation, but having actual bitcoin is also a hedge against future instability.
In addition, it is worth noting that GBTC is not among the top ten stocks held by Gen X (currently between 40-54) and Baby Boomers (55-75). Charles Schwab's report shows that the top three stocks held by the two generations are Apple, Amazon and Berkshire Hathaway stocks.
The report shows that the average account balance of all participants in the third quarter of 2019 was $ 276,929, which is almost the same as the previous quarter's $ 276,547, which is 1% higher than the average account balance of the third quarter of 2018 ($ 275,362). Baby Boomers have the highest account balances, averaging $ 394,064, Gen X at $ 213,018, and Millennials at $ 68,756.
Charles Schwab is currently the largest investment brokerage firm in the United States, managing $ 3.2 trillion in assets. Just last month, the company announced that it would acquire cryptocurrency-friendly rival TD Ameritrade for $ 26 billion. The transaction is expected to be completed in the second half of 2020, and the combined entity will manage more than $ 5 trillion in client assets and serve 24 million client accounts.
Charles Schwab and TD Ameritrade have two very different approaches to the cryptocurrency market; the former does not currently allow any cryptocurrency trading services, while the latter provides bitcoin futures trading through the derivatives exchange giant CME Group It is also one of the investors of the crypto exchange ErisX. Schwab-TD's merger could bring more unknowns to TD's plans to add cryptocurrency transactions and could affect ErisX.