Personal Finance

Baby Boomers Are Betting on Crypto — And It Could Backfire

Joey Frenette

Published: January 3, 2025 9:14 am

Cryptocurrencies, like Bitcoin, Ether, and all the sort, are becoming a serious, more investable asset class for the masses; at least, that’s what some investors may be inclined to think after its recent bout of outperformance.

With so many table-pounding bulls calling for much higher Bitcoin prices, it’s hard not to be drawn into the asset, even if you’re not sure of the intricacies of blockchain, Bitcoin mining, or anything of the sort. Of course, many investors may invest in Bitcoin, either directly or through an exchange-traded fund (ETF), even without knowing much about the underlying technology.

For some, Bitcoin has earned its title as “new-age gold,” given its use as an inflation shelter of sorts. Indeed, gold tends to be an asset that older investors, like those in the Baby Boomer generation, can get behind, especially if they’re looking to put a few investment dollars beyond the stock or bond market.

Don’t speculate on Bitcoin or crypto. Invest in it with a small percentage you can afford to lose.

While Bitcoin and other cryptos are going to be a more volatile ride than most stocks, I think it’s becoming harder to steer clear of the crypto asset class as a whole, with all the television commercials about it and the talking heads who just can’t seem to stop talking about the asset amid recent momentum. With Bitcoin eclipsing $100,000 just in time for the holiday season, questions linger about where it’ll go in 2025.

Some big names on Wall Street think that $1 million Bitcoin could be in the future. And while I’d strongly discourage retirees and Baby Boomers from speculating on the asset over someone’s near- or long-term price target, I do think it can make sense to nibble on some Bitcoin if you’re intrigued by the technology and aren’t hungry for quick gains.

Indeed, Bitcoin can be a massive speculation that can cause you to lose big money if you’re inclined to trade it over the near term. However, if you view the asset as some form of hyper-volatile digital gold on steroids, perhaps leaving a small portion (I’d say less than 2%, but do talk to your financial advisor regarding crypto asset allocation) isn’t as reckless as it seems.

In my very humble opinion, the danger of investing in crypto lies in overexposure. Remember, you can believe in an asset class or some pundit’s price prediction without having to risk too many chips. Of course, when you read predictions for $1 million per Bitcoin, it can be tempting to invest more than you would have otherwise. That’s why I’d strongly encourage Baby Boomers to ask their advisors about crypto and how they believe it can fit in as a part of a well-diversified portfolio.

Tim Cook: A Baby Boomer who owns Bitcoin

Bitcoin may be too much to handle for the average Baby Boomer’s portfolio. However, some Boomers have done quite well by fitting it within their portfolios. Most notably, Apple (NASDAQ:AAPL) CEO Tim Cook, 64, revealed a few years ago that he held Bitcoin in his personal portfolio.

Indeed, he’s done quite well by injecting some crypto into his own portfolio over these past few years. And while today’s buyers won’t be able to get the same low prices, I do think that Bitcoin is a serious asset class that warrants a conversation around the advisor’s table. Just because Mr. Cook is betting on Bitcoin and crypto, though, does not mean you should, especially if you still don’t understand what it is or how it’s used.

The bottom line

Not everyone is comfortable investing in a new-age means of transaction, especially one that’s had a history of crashing by a high double-digit percentage. If you can’t handle a more than 60% drop, perhaps staying away from crypto is the best move. However, if you understand the stakes with the asset and envision yourself topping up your position after a 60% (or more) implosion, only then would I even think about following Bitcoin and the like.

In any case, if you’re one to panic sell after such a drop, as many Boomers may be inclined to do, there’s a good chance that betting on Bitcoin could backfire. However, if you’re a long-term thinker and can manage the volatility, adding crypto to the portfolio can make sense. Ask your advisor first, though!