Wealth Building With Cryptocurrency: A Generational Divide in 2025

Cryptocurrency has transformed from a niche digital experiment to a mainstream investment consideration, but attitudes toward this asset class vary dramatically across generations. For estate planning purposes, understanding these differences is crucial, especially as digital assets become increasingly important components of wealth transfer strategies. This comprehensive guide examines how different generations approach cryptocurrency investments and provides essential considerations for incorporating digital assets into your estate plan.

Key Takeaways

Baby boomers generally avoid cryptocurrencies for retirement planning, with only 8% owning crypto assets
Nearly half (49%) of millennials and Gen Z own cryptocurrencies despite acknowledging their risks
Younger investors allocate 31% of their portfolios to alternative investments including cryptocurrency
The projected $84 trillion wealth transfer could drive an additional $6 trillion into crypto markets
Digital assets require specialized estate planning considerations to ensure proper transfer and management

The Generational Cryptocurrency Divide

Baby Boomers: Cautious Traditional Investors

Baby boomers came of age during a relatively stable and prosperous period in American history. The post-World War II economic boom provided them with strong opportunities for job security, affordable housing, and overall economic stability throughout their working lives. This experience has shaped their investment philosophy in profound ways.

For most boomers, traditional investments like stocks, bonds, and real estate form the cornerstone of their retirement strategy. According to recent Bank of America data, these conventional assets make up approximately 74% of older investors' portfolios. Their reluctance to embrace cryptocurrency isn't surprising—89% of baby boomer investors view crypto as a risky investment, and only 8% report owning any digital currency.

This generation's approach to retirement planning prioritizes stability and predictable income streams, making volatile digital assets unappealing for those who have already accumulated wealth or are focused on preserving it for retirement.

Millennials and Gen Z: Digital Natives Embracing Alternative Investments

Younger generations have faced more economic challenges during their formative years, including the dot-com bubble bursting in 2000, the 2008 financial crisis, high student loan debt, rising housing costs, inflation, and the pandemic. With their faith in traditional investments shaken by market unpredictability, they're turning more to alternatives like cryptocurrency.

A 2024 study from Bank of America Private Bank found that three-quarters of investors between the ages of 21 and 43 believe it is "no longer possible to achieve above-average investment returns by investing solely in traditional stocks and bonds," compared to just 28% of investors over age 44.

This perspective is reflected in their investment choices:

Stocks and bonds make up less than half of younger investors' portfolios
31% of their portfolios are allocated to alternative investments and cryptocurrency
49% own cryptocurrencies and another 38% express interest in ownership
Millennials and Gen Z rank crypto second only to real estate for growth potential

Perhaps most striking, some surveys indicate that younger investors are as likely to own cryptocurrencies as they are to own real estate, and more likely to hold crypto than to have a retirement account.

Cryptocurrency and Retirement Planning: Risk vs. Reward

The Risk Profile of Cryptocurrency Investments

One area where older and younger investors find common ground is acknowledging cryptocurrency's risk profile. Across all age groups, approximately 83% of investors consider cryptocurrency risky. The difference lies in risk tolerance and time horizon—younger investors simply have more time to recover from potential losses.

Bitcoin, the first cryptocurrency, and the broader crypto market are known for extreme price volatility. Although Bitcoin's price has increased substantially since its 2008 inception, wild price swings—sometimes thousands of dollars in a single day—are common. While Bitcoin's volatility has decreased over time and is expected to continue stabilizing, it remains significantly more volatile than traditional retirement assets.

Additional risk factors include:

Market immaturity: With approximately 25,000 cryptocurrencies as of February 2025, many will inevitably fail
Security concerns: Over $1.7 billion in cryptocurrency was stolen in 2023 alone
Regulatory uncertainty: The regulatory landscape for digital assets continues to evolve
Technical complexity: Managing and securing digital assets requires specialized knowledge

Retirement Income Considerations

AARP and financial advisors caution that cryptocurrency presents potential for substantial losses, making it a risky option for retirees and workers nearing retirement. Retirees typically need steady, reliable income to replace former wages or business earnings, making interest-bearing investments like certificates of deposit, money market accounts, and guaranteed fixed annuities more appropriate.

While stocks and bonds carry their own risks, cryptocurrency's relative youth and regulatory uncertainty potentially make the crypto space far riskier than traditional markets for those with shorter time horizons.

The Great Wealth Transfer and Cryptocurrency's Future

Inheritance Expectations vs. Reality

The harsh reality of age-related costs exposes another generational divide: the so-called "inheritance gap." Thirty-eight percent of Gen Z and 32% of millennials expect to inherit their parents' wealth. Yet just 22% of baby boomers expect to leave anything to their children.

This disconnect stems partly from the financial challenges many older Americans face:

43% of 55- to 64-year-olds had no retirement savings at all in 2022
The typical senior with a retirement account has about $200,000 saved
Many seniors are already sacrificing basic needs to pay for health care
Age-related medical expenses can rapidly deplete savings

These statistics cast doubt on the Great Wealth Transfer that is expected to pass $84 trillion from seniors and baby boomers to their heirs by 2045. However, for those who do inherit, their investment preferences could significantly impact markets.

Potential Market Impact

Given generational investing trends, millennials and Gen Z who inherit wealth could drive an additional $6 trillion into the cryptocurrency market over the next 20 years. This potential influx represents a significant opportunity for the digital asset ecosystem but also raises important questions about how these assets will be transferred between generations.

Cryptocurrency and Estate Planning: Essential Considerations

Anyone who owns digital currency must understand the complexities of incorporating crypto into an estate plan. Several unique challenges arise when planning for cryptocurrency inheritance:

Asset Classification and Valuation

Cryptocurrency may be considered a tangible or intangible asset depending on how it's stored, affecting considerations like asset titling, transfers, and transfer taxes. The IRS currently treats cryptocurrency as property for tax purposes, but state laws and regulations continue to evolve.

Valuation presents another challenge—cryptocurrency's price volatility can create significant differences between the value at the time of death and when the estate is settled. Estate planning documents should address how and when cryptocurrency should be valued.

Access and Security Concerns

Unlike traditional financial accounts, cryptocurrency access typically depends on private keys or seed phrases. Without this information, heirs may be unable to access inherited digital assets. Cryptocurrency holdings can be permanently lost if access information isn't properly documented and securely stored.

This creates a delicate balance between security and accessibility:

Documentation: Comprehensive inventory of all cryptocurrency holdings, including wallet addresses and exchange accounts
Access information: Secure storage of private keys, seed phrases, and authentication procedures
Fiduciary instructions: Clear guidance for executors or trustees on how to access and manage digital assets

Fiduciary Responsibilities

Cryptocurrency volatility and security can present issues for trustees, executors, and agents under a power of attorney. Traditional fiduciaries may lack the technical knowledge to properly manage these assets, potentially leading to losses or breaches of fiduciary duty.

Estate planning documents should address:

Whether fiduciaries should liquidate cryptocurrency immediately or maintain holdings
Investment standards that apply to cryptocurrency assets
Liability protections for fiduciaries managing volatile digital assets
Provisions for technical assistance in accessing and managing cryptocurrency

Creating a Comprehensive Digital Estate Plan

Cryptocurrencies should be part of a larger discussion about digital assets in your estate plan. A complete digital estate inventory should include:

Cryptocurrency holdings and exchange accounts
Social media accounts
Cloud data storage
Online financial accounts
Digital collections and NFTs
Domain names
Intellectual property

Working with an estate planning attorney experienced in digital assets is essential. They can help you:

Create appropriate provisions in wills and trusts for digital asset management
Develop powers of attorney that specifically address cryptocurrency
Establish secure methods for transferring access information to heirs
Navigate the evolving legal landscape surrounding digital inheritance
Structure your estate to minimize tax implications for cryptocurrency transfers

Conclusion: Bridging the Generational Divide

As cryptocurrency continues to mature as an asset class, understanding generational perspectives becomes increasingly important for comprehensive financial and estate planning. Whether you're a baby boomer concerned about preserving wealth, a millennial building a diversified portfolio, or someone planning for the eventual transfer of digital assets, professional guidance is essential.

Our experienced attorneys can help you navigate the complexities of cryptocurrency in estate planning, ensuring your digital assets are properly documented, secured, and transferable to your heirs according to your wishes. Contact us today to discuss how we can help you incorporate cryptocurrency and other digital assets into your comprehensive estate plan.

This guide was last updated on April 7, 2025, reflecting current understanding of cryptocurrency markets and estate planning considerations.