Baby boomers the next frontier in booming bitcoin ETF space

Following the Securities and Exchange Commission's landmark approval of the first U.S. exchange-traded funds that directly hold bitcoin on January 10, investment firms are now setting their sights on a new target demographic: baby boomers.

Leading the charge are heavyweight firms like BlackRock, the globe's largest investment manager, alongside crypto-centric entities such as Bitwise Asset Management.

As observed by the Wall Street Journal, the sharp marketing pivot – a sharp departure from the traditional target of younger, more risk-tolerant cryptocurrency enthusiasts – points to rising pressure among asset managers looking to gain advantage in a new but apparently commoditized investment space.

Bitcoin ETFs "all do the same thing. That puts so much pressure on marketing because, all else equal, it’s how you can stand out," Eric Balchunas, analyst at Bloomberg Intelligence, told the Journal.

One promotional video by VanEck shows a text conversation between generations in which a child tells her bitcoin-curious "Mom" that the new ETFs have made investing in the cryptocurrency "easy now." Another post by the firm touts bitcoin as a way to help "the best generation in the world" avoid "government devaluation of their hard-earned money."

With the approval of spot-price bitcoin ETFs, retirement savers can now roll the mainstay cryptocurrency into their 401(k)s through brokerage platforms, according to Ric Edelman, founder of Edelman Financial Engines.

“Because these are ordinary ETFs, they are immediately available in self-directed accounts," Edelman told InvestmentNews in a recent interview. “This is the best of both worlds – it reduces risk in the portfolio but improves returns."

According to ad measurement firm iSpot.tv, the marketing fracas – which includes companies like VanEck, Bitwise, Wisdom Tree, and Grayscale – has seen approximately $300,000 spent on TV spots aired during financial segments between January 11 and January 30, reported the Journal.

However, the approach to advertising bitcoin ETFs is subject to strict oversight to ensure consumer protection.

In a nod to the celebrity-driven campaigns that ran rampant during the pandemic-era crypto ad blitz, Ira Gluck, senior director of the Financial Industry Regulatory Authority, said any testimonials or endorsements of the new class of regulated financial products must come from people with a reasonable degree of expertise.

"We don’t want people to mistakenly come away with the impression that somehow, because they’re regulated, that that makes bitcoin safe,” Gluck told the Journal.

[More: LPL’s gatekeeper wary of bitcoin-ETF hype]