Gen Z investors may keep crypto alive, despite fears that AI will displace crypto as the hottest investment. Recent research by Northwestern Mutual reveals crypto assets make up a significant part of Millennial and Gen Z portfolios, but the two groups show different areas of interest.
Millennials treated crypto as a self-guided investment opportunity, using new assets to actively build their portfolios. Gen Z is even more keen on risk, seeking opportunities in meme coin trenches or prediction markets.
As Cryptopolitan reported, Gen Z is already displacing the former waves of crypto influencers, bringing their own social media presence, jargon, and preferred assets.
While Millennials would deeply research projects, Gen Z traders seek shorter-term opportunities, seeking out lively and liquid markets rather than holding assets for a long time.
One in three Gen Z investors put money into high-risk bets
Around 32% of Gen Z traders in the survey have been exposed to prediction markets, considered a high-risk bet.
The trend extends previous examples of “financial nihilism,” which do not depend on reasonable markers of growth. Instead, Gen Z has tapped prediction markets as a way for faster gains, while their personal finances lag due to inflation, lower career prospects, and general distrust of authority.
“Even in an economy that’s often described as K-shaped with wealth disparities growing among older and younger generations, Americans’ positivity and optimism about their own financial security is on the rise across the board,” said John Roberts, Northwestern Mutual’s chief field officer.
Together, Gen Z and Millennials make up the largest American cohort that invests in high-risk assets. Millennials still lead in crypto purchases, due to longer exposure to the market, with over 35% of portfolios containing digital assets.
Gen Z investors lead in financial nihilism
Gen Z takes over where Millennials already had risk fatigue after several crypto bear markets. Gen Z leads in prediction markets and meme stocks, but is almost on par with Millennial investment decisions.
Financial nihilism stemmed from previous cases of irrational investments, where the previous rules of growth and finance broke down. This created a cohort of investors who suspected market manipulation and tried to seek better returns in new markets.
Based on the financial nihilism metric, 80% of Gen Z respond that they feel left behind financially, with 75% of Millennials giving the same response.
Exposure to crypto markets for American investors follows a general sense of improved finances, but a persisting feeling of still being left behind. The available liquidity, mixed with infrastructure, means investors have not entirely abandoned on-chain activity, as long as it offers potential gains.
Based on recent research, 50% of American investors feel financially secure, up from 44% a year ago. At the same time, the opportunity for fast gains still keeps users engaged with meme platforms and outcome markets like Polymarket.
