Kansas City Fed Projects Rising Global Wealth and Aging Will Boost Bitcoin Demand Through 2100

Older people with more money will increase global demand for assets like Bitcoin over the next decades.

Falling interest rates may push more investors to choose digital assets like Bitcoin for better returns.

Clearer rules and new products could make Bitcoin a trusted choice for older and wealthier investors.

The US Federal Reserve Bank of Kansas City has projected a sharp increase in global asset demand driven by aging populations. According to its August report, rising life expectancy and global wealth will likely raise asset investment sharply through 2100. The report estimates that aging alone could increase asset demand by an additional 200% of global GDP between 2024 and 2100.

The analysis links demographic shifts with stronger capital accumulation. Older populations tend to hold more wealth and invest in long-term assets. This trend, the Fed suggests, will continue for decades. It may also put downward pressure on real interest rates, making non-traditional assets more attractive.

Crypto Could Benefit from Lower Interest Rates

The declining real interest rates tend to drive investors to other stores of value. Cryptocurrencies such as Bitcoin can be more attractive as returns on traditional assets decrease. According to the estimates provided by the Fed, this macroeconomic change may facilitate an increase in the demand for digital assets.

Though Bitcoin can be viewed as a risky investment, the perception can be mitigated depending on the market dynamics and the actions of the investors. The lure of crypto among risk-takers who are willing to adopt the asset more might be magnified in a long-term, decreasing real rates environment.

The Fed’s forecast does not isolate crypto, but it positions it among the beneficiaries of higher global investment activity. Digital assets would potentially fit in the same category as equities, bonds, and real estate in increasingly diversified portfolios.

Older Investors Slowly Turning to Bitcoin

New trends show that older generations are gradually becoming more open to digital assets. With wealth concentrated among older populations, their investment choices may soon include cryptocurrencies. Institutional products like ETFs are helping bridge the gap by offering exposure to Bitcoin in familiar formats. Earlier this year, Bitwise CEO highlighted the growing demand for spot Bitcoin ETFs, which was after seeing swift growth with $4.08B AUM.

Clearness in regulations can also help to promote the adoption of crypto. With governments developing regulations to regulate the digital asset markets, older investors can have confidence in the safety and authenticity of such markets. The move would decrease the attitude of crypto as a niche or a speculative asset.

Bitcoin’s role as a store of value is becoming more widely recognized. This could eventually allow it to mirror the reputation that gold has earned among conservative investors over generations. Recently, Gold outshined BTC by gaining 39.4% YTD, while Bitcoin rose by 23.8%, widening the performance gap.

Young Investors Still Lead, But Demographics Are Shifting

As of late 2024, around 34% of global crypto holders were aged between 24 and 35. This group remains the dominant force in digital markets. However, analysts note that higher wealth among older individuals will drive new adoption patterns.

As the world becomes wealthier, there is an increase in investors who are moving into riskier classes. Attitude is being changed by increased investment horizons and an enhanced level of tech familiarity. This could enable Bitcoin and other cryptocurrencies to be popular among people of all ages, and not only among younger users.

Crypto demand, once youth-led, could see broader demographic participation in the decades ahead.