Crypto is gaining popularity among Millennial investors, with 62% of Millennial ETF investors planning to invest in digital assets in the next year, according to Charles Schwab’s 2024 ETFs and Beyond Study.
Overall, crypto is now the second most popular asset class for investors, marking a significant shift in investment trends. This contrasts with older generations, where only 44% of Gen X and 15% of Boomers have similar investment plans.
A survey conducted between July 2 and July 20 gathered insights from 2,200 investors, including 1,000 ETF investors and 200 respondents who started investing after 2020.
The study reveals Millennials’ interest in alternative asset classes like cryptocurrencies, which are now the second most popular investment choice for this group after US equities.
“Millennials are not only looking to diversify but also to invest in markets that reflect future trends and technological innovations.”
With 39% of Millennial investors considering spot crypto ETFs, they are more inclined towards high-risk strategies compared to Gen X (24%) and Boomers (11%).
Cautious optimism
Millennials’ attraction to digital assets aligns with broader investment patterns. This generation is also open to specialty ETFs like long/short strategies, volatility hedging, and smart beta products.
Aside from cryptocurrencies, Millennials show interest in real assets (45%) like commodities and infrastructure, and bonds and fixed income (47%).
Although optimistic, around 66% of Millennials are cautious about outperforming the market and express concerns about portfolio recovery in economic downturns or “black swan” events.
This cautious optimism leads Millennials to prioritize diversification through crypto as a hedge against inflation and a growth opportunity. Crypto has become an essential part of Millennial portfolios beyond speculation.
Nearly half of respondents cite aligning investments with personal beliefs as a reason for their interest in digital assets, reflecting a change in how wealth creation is perceived by this generation.
Moreover, Millennials are more likely to personalize their portfolios, with 46% planning to invest in companies and funds that reflect their social, environmental, or ethical values.
Bullish outlook despite volatility
The study emphasizes the role of education in Millennials’ investment decisions. As more financial institutions introduce crypto and blockchain-based products, information on these assets becomes more accessible.
Millennials are more familiar with direct indexing and customization options compared to older generations, with 80% interested in exploring this investment method further.
Despite market fluctuations, almost 40% of Millennials remain optimistic about cryptocurrencies, indicating a long-term perspective on this asset class. As crypto products evolve, they will continue to attract younger investors looking to diversify and personalize their portfolios.
With the growing popularity of crypto, financial institutions are expected to innovate with ETFs and other financial products tailored to the preferences of a tech-savvy younger investor base. Digital assets are becoming a foundational element of the portfolios of the next generation, not just a passing trend.
