Cryptocurrency Dominates as Top Choice for Gen Z Investors: Report

A new report by FINRA Foundation and CFA Institute reveals a surprising investment habits of Generation Z (Gen Z) in the United States. Despite their young age, nearly 60% of Gen Z invest, with cryptocurrency leading the way. Explore their preference for crypto and individual stocks, their lower reliance on mutual funds compared to older generations, and their growing interest in non-fungible tokens (NFTs). Discover how Gen Z investors are embracing cryptocurrency, leveraging social media for financial education, and showing a willingness to take risks. Gain insights into the barriers they face and compare Gen Z investing trends across different countries.

A new report titled ‘Gen Z and Investing: Social Media, Crypto, FOMO, and Family‘ by the FINRA Investor Education Foundation and the CFA Institute explores the investing attitudes and behaviors of Generation Z (Gen Z) individuals aged 18 to 25 in the United States.

The report compares two segments of Gen Z—the ones with investment accounts and those without—with their millennial and Gen X counterparts. Additionally, it profiles Gen Z investors in Canada, the United Kingdom, and China, and compares them to their counterparts in the United States.

The report highlights that despite their young age, a significant percentage of Gen Z individuals in the United States are involved in investing. Approximately 56% of Gen Zs report owning at least some investments, with cryptocurrency being their top choice. They are also inclined towards individual stocks and are less likely to use mutual funds. Furthermore, Gen Z investors, along with millennials, show a higher propensity to invest in cryptocurrencies and non-fungible tokens (NFTs) compared to Gen Xers.

When it comes to learning about investing, Gen Z investors in the United States rely on a variety of resources. Social media platforms such as YouTube, internet searches, and advice from parents/family play a significant role in their financial education. YouTube is the most popular online resource, followed by internet searches, Instagram, TikTok, Twitter, Reddit, and Facebook.

Gen Z investors in the United States exhibit a willingness to take financial risks, with 46% stating they are open to substantial or above-average risks. Additionally, 50% of them admit to making investment decisions driven by the fear of missing out (FOMO).

The report also sheds light on the barriers preventing Gen Zs in the United States from investing. Lack of savings, limited income or living paycheck-to-paycheck, and a lack of knowledge about investing are cited as the primary reasons for not entering the investment arena.

The study reveals that Gen Zs in various countries, including Canada, the United Kingdom, and China, are actively investing. Canada has the highest percentage of Gen Z investors among the countries covered by the report, with 74% stating they own at least one investment. Comparatively, the United States has a 56% ownership rate, followed by the United Kingdom at 49% and China at 57%.

Overall, the report emphasizes the diverse and digitally savvy nature of the Gen Z population. As they increasingly enter the financial markets, understanding their investing decisions and providing them with educational tools become vital. Factors such as rising inflation, the popularity of cryptocurrencies, and the influence of social media “finfluencers” are reshaping investment practices, products, and platforms, distinguishing Gen Z investors from previous generations.

Read Also: 59% Crypto Users Are Interested In AI advancements For Blockchain and Crypto Trading: KuCoin

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