Bitcoin: Between A Bubble and the Future

Abstract

This paper demonstrates that the Millennial generation exhibits unique personal traits that have implications for their portfolio choice and, hence, for the stock market. Specifically, Millennials display greater propensity to participate in the stock market, exhibit more confidence (as they trade more frequently), and more diversification (invest in greater number of stocks and foreign assets). At the macro level, we find that the Millennials influence the stock market to behave differently surrounding holidays, and the statistical significance of key financial anomalies is disrupted. Despite the Millennials’ proficiency in using internet, they utilize more social methods (friends/relatives) when they invest than previous generations. Collectively, we infer that the financial market is not only exposed to business cycles, but also to generation cycles.