As a millennial, it’s hard to say this, but baby boomers do crypto better. They are taking research methods used in traditional markets and applying them to crypto projects, according to a new report from Bybit and consumer research firm Toluna.
The report says 34% of baby boomers spend “a few days” doing due diligence on a project before investing, 50% more than other generations. More worryingly, “64% of North American investors spend less than two hours or don’t DYOR at all.”
Boomers are also more likely to focus their research on technical factors such as tokenomics, income, and the competitive landscape. Contrast that with their younger compatriots, who are more likely to value reputation elements such as a charismatic founder and “website aesthetics.”
This goes to show that being digital and crypto-native isn’t as big of an advantage as people think. In fact, it pales in comparison to some of the Warren Buffet-style skills that older investors have honed over the years.
Related: 5 tips for investing in a global recession
Perhaps baby 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 forward for young people is to be humble and learn from the elders.
Even though crypto has many idiosyncratic properties that differentiate it from other capital markets, it still has enough in common to allow for a decent crossover of analytical skills. After all, the price of digital assets is highly dependent on the balance between market supply and demand, just like traditional markets.
Dig into techniques can prevent the kind of bad decision-making that led to big losses in 2022. Many times I’ve felt really good about buying a token based on the project’s white paper and the strong narrative that drives it, but I I discovered, after further research, that there was so much venture capital unlocking that the selling pressure would weigh on prices for years to come.
Boomers used to analyzing company numbers and calculating price/earnings and price/earnings/growth ratios can apply these skills to data from CoinGecko or CoinMarketCap. Younger generations need to know why “circulating supply” versus “maximum supply” is important and why volume is critical.
Indeed, crypto projects resembling traditional value investments 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 produce revenue and share it with holders. So-called “real return” crypto projects are no different from dividend-paying companies — something boom investors would be familiar with and perhaps drive some of their investment decisions.
This is not to ignore the importance of story and community in modern investing and crypto in particular. For example, decentralized perpetual trading platforms such as GMX, Gains, and ApeX Pro benefited from pro-decentralization sentiment following the FTX bankruptcy.
Researching this aspect requires a good knowledge of social media, especially Twitter, which is one of the main ways to access prominent crypto analysts, founders and degens. Investors use these tools to find stories, gauge where a story is in its lifecycle, and gauge overall market sentiment.
Related: 5 reasons why 2023 will be a tough year for global markets
But millennials and Gen Z aren’t much of an advantage when it comes to using social media to gauge trends, because it’s not new anymore. It is Web2, and everyone already knows how to use social networks. In fact, young people turn their familiarity with social media into a disadvantage by overvaluing it as a research tool, while baby boomers are more likely to stick to the facts.
Traditional investment due diligence continues to separate men from boys, just as it has throughout history. As long as this is the case, baby boomers will outperform younger generations because they do more research and tend to be more patient with investing, leading to higher returns than younger generations. , who can embark on an investment without fully understanding what they are. To do. go in. If you’re looking for someone reliable and knowledgeable about due diligence, look no further than your parents or grandparents.
Nathan Thompson is Bybit’s Senior Technical Writer. He spent 10 years as a freelance journalist, mostly covering Southeast Asia, before turning to crypto during the COVID-19 shutdowns. He holds Joint Honors in Communication and Philosophy from Cardiff University.
This article is for general informational purposes and is not intended to be and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
0 Comments