The Rise of Crypto: Why Gen Z Is Flocking to Alt-Currencies Over Traditional Retirement Savings
For Gen Zers, or people who were born between 1997 and 2012, crypto is by far the most popular investment. In fact, a February report on U.S. investment trends by YouGov found that Gen Z investors are four times more likely to own crypto than a retirement account. Whereas 42% of the Gen Z investors surveyed reported owning cryptocurrencies, only 11% said they have a retirement account.
The trend holds true for millennials, born 1981 to 1996, too, albeit to a lesser extent: YouGov found that 36% of investors in this age group own crypto, while 34% have a retirement account.
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The broad embrace of crypto — especially among young investors — is part of a so-called “second wave” of cryptocurrency, says Todd Dupey, senior vice president of market research at YouGov. At first, he says crypto was a bit of a “wild west.” But now, at least from a fraud standpoint, it has become much safer and more popular.
“Even larger banks and larger fintech companies are open to having [crypto] as a part of your portfolio,” he says.
Introduced in 2009, bitcoin has ushered crypto into the zeitgeist of younger, tech-savvy Americans and spurred dozens of other crypto coins, including ethereum, solana and dogecoin. In late 2024, bitcoin passed the $100,000 threshold. The Trump administration has signaled plans to relax crypto regulations.
In other words, once-niche digital currencies are poised to stay. Investing in them is easier than ever. And young investors want in on the action.
Why young investors are skipping retirement accounts in favor of crypto
Ask a financial planner whether you should invest in crypto over opening an individual retirement account (IRA), and you’ll probably be met with a lengthy, red-faced monologue.
Advisors often recommend a sort of order of operations for your money: Start an emergency fund that covers several months of expenses. Take advantage of 401(k) benefits from your employer. Open a Roth IRA. Max out a health-savings account. Then, maybe, dabble in crypto if you happen to have some fun money left over.
To be sure, that is sound financial advice. But to many Gen Z investors, it simply does not apply.
“The majority of Gen Z is still trying to figure things out,” says Dinon Hughes, a 24-year-old financial planner and partner at Nvest Financial, explaining that many young crypto investors haven’t started their careers yet and may be in entry-level jobs without access to 401(k) plans.
Why are young investors skipping retirement accounts in favor of crypto?
To many Gen Z investors, returning to the old financial playbook doesn’t add up. And the easiest way to invest, in their view, is through crypto. Already, some young investors are discovering that getting started is a breeze, with apps like Robinhood and Coinbase making it easy to sign up and invest in their favorite coins.
These investors are, in part, drawn to crypto by the allure of short-term gains: “That’s just how our brains work when we’re young,” says Yates Emerson, a 19-year-old who recently got into crypto through a friend.
Emerson himself has invested $2,500 in various smaller crypto coins, including XRP, Sui, and dogecoin. He knows they’re volatile investments, but with college and little to no expenses, he doesn’t think there will be another point in his life when he can tolerate this much financial risk.
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