As a millennial, it’s hard to tell, but boomers are doing crypto better. They are taking research methods used in traditional markets and applying them to crypto projects, according to a new report by Bybit and consumer research firm Toluna.
According to the report, 34% of Boomers spend “a few days” carefully considering a project before investing — 50% more than other generations. Even more concerning is that “64% of North American investors spend less than two hours or not at all DYOR.”
Boomers are also more likely to focus their research on technical factors such as tokenomics, revenue, and the competitive landscape. Contrast this with their younger compatriots, who value more reputation elements such as a charismatic founder and “website aesthetic”.
This shows that being a digital and crypto native is not as much of an advantage as people think. It actually pales in comparison to some of the Warren Buffet-style skills that older investors have honed 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 it seems the best way for young people is to get humble and learn from the oldies.
While crypto has many idiosyncratic characteristics that set it apart from other capital markets, it still has enough in common to make a decent transition into analytical skills. After all, just like traditional markets, the price of digital assets is highly dependent on the balance between supply and demand in the market.
Digging into the technicals can prevent the kind of poor decision-making that led to big losses in 2022. On several occasions I had a really good feeling about buying a token based on the project’s whitepaper and the strong narrative that drives it, but upon further research I found that so many venture capital releases were coming in that the selling pressure is pushing prices down for the upcoming ones years would burden.
Boomers who are used to digging up company numbers and calculating price-to-earnings and price-to-earnings-to-growth ratios can apply these skills to data from CoinGecko or CoinMarketCap. Younger generations need to learn why ‘circulating supply’ versus ‘maximum supply’ matters and why volume matters.
In fact, crypto projects that resemble traditional value investing have held up relatively well in the bear market. Investors have become more aware of the difference between protocols that issue tokens as a glorified fundraising method and those that generate revenue and share it with holders. So-called “real yield” crypto projects are not dissimilar to dividend-paying companies — something boomer investors would be familiar with and perhaps influence some of their investment decisions.
This is not to ignore the importance of narrative and community in modern investing and crypto in particular. For example, decentralized perpetual trading platforms like GMX, Gains and ApeX Pro benefited from the pro-decentralization sentiment following the FTX bust.
Exploring this aspect requires a good knowledge of social media, especially Twitter, which is one of the prime ways to access Crypto’s celebrity analysts, founders, and degeneers. Investors use these tools to find narratives, assess where a narrative is in its life cycle, and gauge market sentiment in general.
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But Millennials and Gen Z don’t really have an advantage when it comes to using social media to evaluate trends because it’s not new anymore. It’s Web2, and everyone already knows how to use social media. In fact, teens turn their familiarity with social media into a disservice, over-emphasizing it as a research tool, while boomers tend to stick to the facts.
Traditional due diligence in investing continues to separate the men from the boys, just as it has throughout history. As long as this is the case, Boomers will outperform younger generations because they do more research and tend to be more patient when investing, leading to higher returns than younger generations who may jump into an investment without fully understanding what they are getting into. If you are looking for someone reliable and knowledgeable about due diligence, look no further than your parents or grandparents.
Nathan Thompson is the senior technical writer for Bybit. He spent 10 years as a freelance journalist, primarily covering Southeast Asia, before turning to crypto during the COVID-19 lockdowns. He holds joint awards in Communications and Philosophy from Cardiff University.
This article is for general informational purposes and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.