This one trend could send Bitcoin even higher

The cryptocurrency market is changing, evolving into an asset class for investors – many of them younger – looking for exposure outside of traditional assets like stocks and bonds.

Charles Schwab (SCHW 0.13%), a financial company that provides clients with various investment products, recently conducted a study showing how far cryptocurrencies have come in the past decade. The survey asked 1,000 401(k)si customers ages 21 to 70 a series of questions related to investing, retirement and more. The participants were divided into four age groups: baby boomers, Gen X, millennials and Gen Z.

There were many recurring themes in the study that usually had to do with the embrace of new technology in their investment practices or lack thereof. Millennials and Gen Z have consistently shown an interest in less traditional assets, using smartphones and social media to research and facilitate trades.

Most interesting was the difference in sentiment on cryptocurrencies between the younger generations and the older ones. Only 4% of baby boomers owned cryptocurrencies, compared to 47% of millennials and 43% of Gen Z.

In addition, participants were asked which new assets they would like to have access to in their 401(k). At the top of the list for millennials and Gen Z were cryptocurrencies. About 45% of these groups wanted to have cryptocurrency options, while only 31% of Gen X and only 11% of baby boomers wanted similar access.

This research shows similar trends that a Bank of America study found in mid-October: Cryptocurrencies are becoming more sought after by younger investors. As this trend continues to develop, it should further legitimize the asset class – making it a great time for investors to get in now while it’s still early.

Limits your options

But there are thousands of cryptocurrencies in circulation today. Which should investors prioritize?

To get a better idea, we should look at which cryptocurrencies financial services companies are interested in. It turns out that there is one that clearly stands out from the rest: Bitcoin (BTC -0.82%).

As the world’s first and most valuable cryptocurrency, Bitcoin has been in a class of its own since its creation in 2009. Over the past dozen years or so, Bitcoin has transformed from a highly speculative asset considered only used by criminals to one that is owned by high-profile investors, and even Fortune 500 companies like Tesla.

It is this visibility that has helped it become one of the most sought-after cryptocurrencies today, and investment firms are coming to this realization. Charles Schwab competitor rendering became the first financial services company to offer its 401(k) clients exposure to Bitcoin in April. Since then, similar moves have been made by other companies to meet customer demands. In August 2022, the world’s largest asset management firm, Black stonepartnered with the popular cryptocurrency exchange Coin base to offer its institutional clients access to Bitcoin trading.

There are other examples, but simply put, Bitcoin is leaps and bounds ahead of any other cryptocurrency in terms of becoming a recognized asset. As the second most valuable cryptocurrency, Ethereum may be the next best alternative to Bitcoin, but the distance that separates the two is great. For this reason, Bitcoin seems to be the most likely candidate of all cryptocurrencies to go mainstream first.

We should expect the demand for Bitcoin to filter into the financial world, the business world and even our everyday lives as younger investors continue to seek exposure. This process will not happen overnight, or even in the coming months, but will likely take years. This is why now is a great opportunity to buy Bitcoin in preparation for a future where the original cryptocurrency cements itself as a necessary addition to every portfolio.