Will the ‘Great Wealth Transfer’ Transform the Markets?

The world is on the cusp of the largest wealth transfer in history. An estimated $84 trillion will pass from baby boomers to younger generations over the next two decades. As these assets shift into the hands of Gen X, millennials, and Gen Z, the investment landscape is poised for a significant transformation. From sustainable investing to cryptocurrency adoption, new trends are already emerging, and they could reshape markets in ways never seen before. 

A Shift in Investment Preferences 

Traditionally, baby boomers have built wealth through stocks, bonds, and real estate. However, younger generations are demonstrating a different approach. According to a Bank of America Private Bank study, 75% of millennial and Gen Z investors believe it’s not possible to achieve above-average returns solely with traditional stocks and bonds. Instead, they are turning to alternative investments such as private equity, venture capital, and digital assets. 

“Younger investors are more open to new financial vehicles,” notes Lauren Sanfilippo, a senior investment strategist with Bank of America Private Bank’s Chief Investment Office. With access to capital from inheritance, they are pushing for greater investment variety and digital customization tools. 

The Rise of Sustainable and Impact Investing 

Sustainability is becoming a defining factor in investment strategies. The Bank of America study found that 75% of investors under 43 own sustainable assets. This signals a growing preference for investments that not only generate returns but also contribute to social and environmental causes. 

“Sustainable and impact investments can be implemented across all asset classes,” says Sarah Norman, head of CIO Sustainable Investing Thought Leadership. Whether through equities, fixed income, or alternative investments, younger investors are leveraging their newfound wealth to align their portfolios with their values. As sustainability moves from niche to mainstream, the Great Wealth Transfer could accelerate this trend, making impact investing a core component of market strategies. 

Real Estate: A Common Ground Across Generations 

Despite differences in asset preferences, real estate remains a favored investment across all generations. Whether through direct homeownership or real estate investment trusts (REITs), the sector continues to be a cornerstone of wealth-building. However, millennials and Gen Z face significant challenges, including high interest rates and limited housing supply. 

The Great Wealth Transfer should enable more young investors to enter the real estate market, either through inherited property or funds for a down payment, according to Sanfilippo. Additionally, sustainability is shaping real estate decisions, with a growing focus on energy-efficient homes and climate-conscious developments. 

The Crypto Boom Among Younger Investors 

Perhaps the most striking trend is the surge in cryptocurrency adoption. According to a Gemini report, 51% of Gen Z investors worldwide have owned or currently own cryptocurrency, a significant jump from the 35% ownership rate among the general population. In the U.S., Gen Z and millennials lead the way, with ownership rates of 51% and 49%, respectively. 

A separate study by Charles Schwab found that 62% of millennials plan to invest in cryptocurrency ETFs over the next year, surpassing traditional assets like American stocks and bonds. Analysts estimate that as much as $20 trillion of the Great Wealth Transfer could be funneled into digital assets over the next decade, with Bitcoin and Ethereum receiving the lion’s share of those investments. 

Major financial institutions are taking note. BlackRock, which once dismissed Bitcoin as a tool for money laundering, now leads the Bitcoin ETF market with $22 billion in investments. Fidelity and VanEck are also actively engaging younger investors through blockchain education and digital asset promotions. With growing institutional support, cryptocurrency is becoming a key component of wealth preservation and growth strategies for younger generations. 

What Does This Mean for the Future of Markets? 

The Great Wealth Transfer is more than just a shift in assets—it’s a shift in priorities and investment philosophies. Younger investors are: 

• Embracing alternative investments such as private equity, venture capital, and cryptocurrency. 

• Prioritizing sustainability and social impact. 

• Diversifying portfolios beyond traditional stock-and-bond allocations. 

• Continuing to invest in real estate while integrating eco-conscious considerations. 

Despite these changes, some time-tested principles remain intact. “The tried-and-true principles of diversification and aligning your investments with your timelines, risk tolerance and long-term goals will always apply” says Sanfilippo. While younger investors are more experimental in their approach, many will still rely on foundational investment strategies. 

A New Era of Investing 

The Great Wealth Transfer is set to redefine financial markets over the next two decades. With younger generations embracing alternative investments, sustainability, and digital assets, traditional financial models will need to adapt. Whether this results in long-term market stability or increased volatility remains to be seen, but one thing is clear—the investment landscape is evolving. For those looking to capitalize on these changes, exploring digital assets such as Bitcoin and alternative investment vehicles could be key to long-term financial success. 

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