Gen Z Investments – Is Crypto Becoming More Popular Than Stocks?

Everyone wants to know what the young folk are up to. Baby boomers may be in charge of things, but it’s the millennials (born 1981-1996, roughly) and Generation Z (1997-2012) who power the marketplace with their money. If you fall into these age groups, congratulations: This world is yours to purchase.

Well, sort of. Demographics is a tricky thing; breaking populations down into smaller cohorts can help you understand things a bit better, but it can also lead you astray. Here’s an interesting report from Policygenius, who have just released their 2024 Financial Planning Survey; apparently Gen Zers are more likely to own cryptocurrency (20%) than stocks (18%).

Does this mean we’re heading towards a brave new world where the price of Bitcoin matters more than the Dow Jones? Perhaps – although many of us are already there.

What Do All These Generations Mean?

Not as much as we think. The line dividing millennials (aka Generation Y) and Gen Zers is paper thin; people born in 1996 or 1997 will have a lot more in common with each other than they will with people born at the outer extremes of their respective generations.

But the surveyors have to draw the line somewhere, and in this case, it’s between Cibo Matto and Marcy Playground. More detailed demographic studies will break their populations down into even smaller cohorts, but just like it is out there in the real world, every line you draw on the map brings chaos as well as order.

With that said, the important data takeaway from this survey, from a cryptocurrency vs. stocks perspective, is how the needle moves towards crypto as the cohorts get younger:

And down the garden path we go: Surely this means that Generation Alpha (0-17) is going to put all their money in Dogecoin, and leave everyone else behind, buried in ticker tape. Well, maybe. It was good to be young and on the internet when crypto first came out; who knows what the Next Big Thing will be once today’s children enter the rat race.

Why Does Gen Z Have Less Than Gen Y?

Ah, you noticed that too. It’s the circle of life, right? You start off young with hardly any cash, most of which you spend on Pop-Tarts and wildberry vodka coolers, then you go out and make something of yourself.

That lack of purchasing power is yet another reason you have to be careful drawing assumptions about Gen Z behavior from this data. Stocks are an investment; crypto is money in and of itself, and it’s something young people might have a relatively small amount of in their wallets. You could own one share in Walmart, too, but what are you really going to do with that $59.97 (as at press time)? You’re going to buy more Pop-Tarts.

There’s also the problem of sample size. Millennials (72 million Americans in 2022, according to Statista) now make up the largest of the four cohorts on our list, followed by Gen Z (70 million), boomers (69 million), and Gen X (65 million) – the Forgotten Generation.

Sadly, there aren’t as many boomers around as there used to be. They were such an unusually large cohort – in 1970, almost twice as large as the Silent Generation before them – that it’s causing the old “pig in the python” problem. If you’re a younger person hoping to buy a house someday, you might have to wait a while longer than previous generations did. So much for real estate.

Should I Use Social Media To Ask Financial Questions?

Sweet baby corn, no. But according to this report, 9% of Gen Zers turn to TikTok or other social media as their primary source for financial advice. That’s compared to 8% for millennials, 3% for Gen X, and 1% for boomers.

Again, people are going to adopt the tools of their time – and if you’re young and broke, you’re probably not going to hire a financial professional, like 39% of boomers do. That slips to 27% for Gen X, 18% for Gen Y, and 14% for Gen Z.

At least people are looking for help. If you treat the data in these reports properly, you’ll find the answers you need to make smarter investments and sharper business bets. But remember, in the end, your conclusions are only as good as your questions.