According to Fundstrat’s Tom Lee, the crypto and equity markets may remain bullish for a long time due to Millennials’ $2 trillion yearly investments in high-risk assets. Based on previous research, Lee identified a number of factors that explain why and how high-risk assets may benefit from a wealth shift.
How millennials could power the next bull run
According to a Fundstart report, an estimated $2 trillion in wealth is passed down from Baby Boomers to Millenials each year through inheritance. Millennials, as opposed to “boomers,” prefer to invest in more risky assets such as stocks and cryptocurrency in order to earn higher returns in a shorter period of time.
Because Baby Boomers will account for a smaller pool of wealth as time passes, the market will shift in favor of high-risk assets such as cryptocurrencies, which will serve as fuel for the crypto and equities markets. Lee stated that traders should keep an eye on the stock market in the long run due to the structural shift in investor behavior.
Cathie Wood agrees with her colleague’s theory.
Cathie Wood of Ark Invest also backed Lee’s theory, citing his research in her argument. She stated that she believes in both the cryptocurrency and equity markets, as both will be fueled by millennial investments in the future. According to Wood, Millenials understand and support the rapidly changing world of technology, in contrast to Baby Boomers, who prefer more conservative investment options such as bonds and commodities.
Lee wrote in June that a “bull market until 2038” is possible if his theory is confirmed and the generational wealth shift proceeds as planned.
The cryptocurrency market experienced unprecedented 1,500 percent growth between 2020 and 2021, with institutional investors providing additional support. Previously, numerous large banks in Europe and the United States stated that their clients are eager to invest in digital assets.