What do you invest in? “Cryptocurrencies” are the top choice for Generation Z
When it comes to choosing investment options, would you choose stocks or cryptocurrencies? For younger generations or traditional investors, stocks may be the preferred choice. However, for young Americans, cryptocurrencies may be the priority.
According to a report by The Block, in October of last year, Policygenius conducted a survey of 4,063 adults aged 18 and above in the United States. The recently released results show that among Generation Z (18 to 26 years old), 20% hold cryptocurrencies and 18% hold stocks. In comparison, among baby boomer investors, 33% hold stocks and only 5% hold cryptocurrencies.
The millennial generation, aged 27 to 42, also has an interest in cryptocurrencies, with 22% holding them and 27% holding stocks, according to the data.
Interestingly, the Financial Industry Regulatory Authority (FINRA) and the CFA Institute also conducted investment surveys last year, and the results showed that about 56% of Generation Z individuals are investors, with approximately 55% holding cryptocurrencies and 41% holding stocks, consistent with the findings of the Policygenius survey, indicating that there are more cryptocurrency holders than stockholders.
Why do young people choose to invest in cryptocurrencies? High interest rates, stagnant wages, unaffordable housing
Stocks are the largest asset class in the world and the choice of most investors. In contrast, the cryptocurrency market is much smaller and has a total market value of only $2.36 trillion, which is far lower than the total market value of US stocks at $40.7 trillion. What are the reasons for the choice of cryptocurrency trading by young Americans? This report points out the key factors.
Policygenius points out that due to the high interest rates, stagnant wage growth, and low housing supply in the United States, the affordability of housing is at its lowest point since the Great Depression, making it difficult for many Americans to afford a house. Among the surveyed Generation Z and millennial adults, only 20% own real estate.
The baby boomer generation benefited from real estate investments, with a ownership rate of 45%; the ownership rates for Generation X and millennials are 28% and 24% respectively, but for Generation Z, the ownership rate has sharply declined to 13%. Policygenius believes that the increasingly severe housing shortage may make it difficult for young people to benefit in the same way.
In the case of not intending to buy or being unable to afford a house, it is not surprising that millennials and Generation Z allocate their funds to stocks and cryptocurrencies. And for Generation Z, cryptocurrencies seem to be more innovative than stocks, and are expected to become a new way of accumulating wealth in the new era. Myles Ma, a certified personal finance advisor at Policygenius, said, “The way younger generations accumulate wealth is different from Generation X and the baby boomer generation, including new types of investments like cryptocurrencies. This may indicate that they are more willing to take risks with their money, and it may also reflect uncontrolled barriers, such as the increasingly severe housing shortage issue.”
Taiwanese young people also cannot afford houses! Yuanta Bank: Generation Z has become “virtual asset natives”
Taiwanese young people also face similar difficulties and even a “lying flat culture,” which means not getting married, not buying houses, not having children, and not striving. YouTuber Chieh Chi-Chi pointed out in his latest video that wages in Taiwan have stagnated for 20 years, but food and consumer prices have increased by about 40%, and the uncontrolled rise in house prices has also led to a decrease in the ratio of housing income to income.
Taiwanese born after 1978, although earning lower wages than the previous generation, happen to have encountered the stage of soaring housing prices in 2002. This group of people who have benefited from real estate investments is now below the age of 46, belonging to the X generation classified by the United States.
Under the influence of high real estate prices and stagnant wage growth, some Generation Z young people are even willing to invest in virtual assets and other new types of investments.
According to a previous survey by Yuanta Bank, among 3,434 valid questionnaires, 22.4% of Generation Z respondents invested more than 50% of their total assets in virtual assets (cryptocurrencies, NFTs, etc.); 13.8% of them only invested in virtual assets and had no other investment targets; and 54.8% of them invested in high-risk meme coins, higher than the average of the overall generation.
Yuanta Bank describes Generation Z as “virtual asset natives,” and the millennial generation (Generation Y) has more than half of its members exposed to virtual assets, making them the main force in virtual asset investment. They are more concerned about whether the government will have clearer regulatory measures in the future.
From the surveys in the United States and Taiwan, although the economic environments of the two countries may not be exactly the same, they both face high housing prices and stagnant wage growth, which has gradually changed the investment preferences of younger generations.
For those of you reading this article, do you prefer to invest in cryptocurrencies, stocks, or real estate? If you prefer cryptocurrencies, what are your reasons? Feel free to share with us in the comments below!
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Cryptocurrency City
Proofreading Editor: Gao Jingyuan
