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New Research Indicates Boomers Make Better Crypto Investors

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As a millennial, it’s hard to say this, but boomers are doing crypto better. They’re taking research methods used in traditional markets and applying them to cryptographic projects, according to a new report from Bybit and consumer research firm Toluna.

The report says that 34% of boomers spend “a few days” doing due diligence on a project before investing – 50% more than other generations. Even more troubling, “64% of US investors spend less than two hours or no DYOR.”

Boomers are also more likely to focus their research on technical factors such as tokennomics, revenue and competitor landscape. Contrast that with your younger compatriots, who are more likely to value reputational elements such as a charismatic founder and “site aesthetics”.

This goes to show that being a digital and crypto native is not as big an advantage as people think. In fact, that pales in comparison to some of the Warren Buffet-style skills that older investors have honed over the years.

Related: 5 tips for investing during a global recession

Perhaps boomers are more likely to retire 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 humble themselves and learn from their elders.

Even though cryptocurrency has many idiosyncratic properties that set it apart from other capital markets, it still has enough in common to allow for a decent crossover in analytical skills. After all, the price of digital assets is highly dependent on the balance between market supply and demand, just like traditional markets.

Digging into the technical details can prevent the kind of poor decision making that led to big losses in 2022. Several times I’ve felt pretty good about buying a token based on the project’s white paper and the strong narrative that propelled it, but I found, in additional research, that there were so many venture capital unlocks coming in that selling pressure would weigh on prices for years to come.

Boomers who are used to analyzing company numbers and calculating price/earnings and price/earnings/growth ratios can apply these skills to CoinGecko or CoinMarketCap data. Younger generations need to learn why “rolling supply” versus “maximum supply” matters and why volume is critical.

Indeed, crypto projects that resemble traditional value investing have held up relatively well in the bear market. Investors have become more enlightened about 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 income” crypto projects are not unlike companies that pay dividends – something boomer investors would be familiar with and perhaps drive some of their investment decisions.

This is not to overlook the importance of storytelling and community in modern investing and especially in crypto. For example, decentralized perpetual trading platforms such as GMX, Gains and ApeX Pro benefited from the pro-decentralization sentiment following the FTX bankruptcy.

Researching this aspect requires a good understanding of social media, especially Twitter, which is one of the main ways to access prominent cryptocurrency analysts, founders and degens. Investors use these tools to find narratives, assess where a narrative is in its lifecycle, and gauge general market sentiment.

Related: 5 reasons why 2023 will be a difficult year for global markets

But Millennials and Gen Z aren’t really at an advantage when it comes to using social media to gauge trends because it’s not new anymore. It’s Web2 and everyone already knows how to use social media. In fact, young people turn their familiarity with social media to a disadvantage by overvaluing it as a research tool, while boomers are more likely to stick to the facts.

Traditional investment due diligence continues to separate the men from the boys, just as it has throughout history. As long as that happens, boomers will outperform younger generations because they research more and tend to be more patient when it comes to investing, which leads to higher returns than younger generations, who may go into an investment without fully understanding the who are coming in. If you’re looking for someone trustworthy and knowledgeable about due diligence, look to your parents or grandparents.

Nathan Thompson is Bybit’s main technology writer. He spent 10 years as a freelance journalist, mostly covering Southeast Asia, before turning to crypto during the COVID-19 lockdowns. He holds joint honors in communication and philosophy from Cardiff University.

This article is for general information purposes only and is not intended to be and should not be construed as legal or investment advice. The views, thoughts and opinions expressed here are those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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