A recent report from the World Economic Forum has shed light on a growing trend among Millennials and Gen Z investors. According to the 2024 Global Retail Investor Outlook, a significant number of young investors are allocating a substantial portion of their investment portfolios to cryptocurrency. This shift reflects a change in how younger generations approach risk, trust, and financial planning.
The survey, which included over 13,000 individuals from 13 countries, revealed that 62% of Millennial investors have crypto holdings representing at least a third of their portfolios. Among Gen Z investors, 35% allocate more than half of their portfolio to crypto, with 20% investing around one-third of their assets in digital currencies.
Interestingly, these allocations often surpass investments in traditional assets like stocks, mutual funds, or bonds, which have long been considered staples of a balanced portfolio.
So, how are Gen Z and Millennials rewriting the rules of investment? One key factor is their confidence in cryptocurrency, which is seen as easier to understand compared to traditional investments like ETFs or bonds. This perception is influenced by the wealth of information available on crypto platforms, influencer content, and peer networks, rather than traditional sources like licensed advisers or institutional analysts.
Moreover, values play a significant role in the investment decisions of young investors. The report found that 70% of Millennials and 66% of Gen Z choose financial institutions based on values alignment. Given crypto’s association with decentralization and transparency, it aligns well with the priorities of these generations.
The rise of cryptocurrency is not limited to developed markets. Emerging markets such as India, Brazil, and South Africa show higher adoption rates of crypto among investors. For some, cryptocurrency offers a way to access capital markets in regions where banking infrastructure is less developed.
Technology also plays a crucial role in shaping this trend. The report highlights that 41% of investors globally, particularly Gen Z and Millennials, are open to delegating financial decisions to AI-based advisers. These same cohorts are active users of budgeting apps, robo-advisers, and fintech platforms, integrating cryptocurrency into their daily financial routines.
However, the concentration of portfolios in volatile assets raises concerns about long-term financial stability. Educators and regulators face the challenge of guiding a generation that prefers learning through experience and places more trust in digital platforms like YouTube than traditional sources.
In conclusion, the World Economic Forum’s report underscores the growing importance of cryptocurrency in the investment strategies of Millennials and Gen Z. As these young investors reshape the financial landscape, stakeholders must adapt to meet their evolving needs and preferences.