As a millennial, it’s hard to say this, 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 from Bybit and consumer research firm Toluna.
The report states that 34% of boomers spend “several days” doing due diligence on a project before investing – 50% more than other generations. More about, “64% of North American investors spend less than two hours or not DYOR at all.”
Boomer also focuses more research on technical factors such as tokenomics, revenue and competitor landscape. Contrast that with his younger peers, who prefer to value reputational elements such as charismatic founders and “website aesthetics.”
This shows that being digital and crypto native is not as big an advantage as people think. It really doesn’t compare to some of the Warren Buffet-style skills that older investors have honed over the years.
Maybe 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 for young people is to be humble and learn from their parents.
Although crypto has many idiosyncratic properties that distinguish it from other capital markets, it is still general enough to allow for a good crossover in analytical capabilities. After all, the price of digital assets is highly dependent on the balance of market supply and demand, just like traditional markets.
Digging into the technical can prevent the kind of bad decision-making that led to big losses in 2022. Many times I felt very good about buying tokens based on the white paper of the project and the strong narrative that pushed it but I found, in further research, there are many venture capital that unlock that will follow the selling pressure for years to come.
Boomers who are used to crunching company numbers and calculating price-to-earnings and price/earnings-to-growth ratios can apply these skills to data from CoinGecko or CoinMarketCap. The younger generation needs to learn why “circulation provider” versus “maximum supply” important and why volume is critical.
Indeed, crypto projects that resemble traditional value investing have held up well in bear markets. 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 with their owners. Crypto projects with so-called “real returns” are no different from companies that pay dividends – something that boomer investors will understand and may influence some of their investment decisions.
This ignores the importance of narrative 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 after the FTX bankruptcy.
Researching this aspect requires a good knowledge of social media, especially Twitter, which is one of the main ways to access famous crypto analysts, founders and degens. Investors use these tools to find narratives, assess where the narrative is in its lifecycle and gauge market sentiment in general.
But Millenials and Gen Z don’t benefit when it comes to using social media to evaluate trends because they’re no longer new. That Web2, and everyone already knows how to use social media. In fact, teenagers turn their familiarity with social media to a disadvantage by appreciating it as a research tool, while boomers are more likely to stick to reality.
Traditional investment diligence continues to separate the men from the boys, as it has historically. As long as the boomers will surpass the younger generation because they do more research and tend to be more patient when it comes to investing, which leads to higher returns than the younger generation, who can jump into investing without knowing what it is. enter. If you’re looking for someone you can trust and know about hard work, look no further than your parents or grandparents.
Nathan Thompson is the lead technology writer for Bybit. He spent 10 years as a freelance journalist, mostly covering Southeast Asia, before turning to crypto during the COVID-19 lockdown. He holds joint honors in communication and philosophy from Cardiff University.
This article is for general information purposes and is not intended and should not be construed as legal or investment advice. The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.