Millennials, Gen Zers View Crypto As Most Stable Investment

Millennials, Gen Zers View Crypto As Most Stable Investment

Investors age 40 and younger say cryptocurrency is safer strategy than 401(k), real estate
gen zer trading crypto

2021 was a huge year for cryptocurrency, with 68% of current owners making their first crypto purchase last year. Despite seeing major losses at the end of the year, investors still have faith in the ability of the cryptocurrency market to rebound.

In a new survey from real estate investment platform Fundrise, millennial (ages 25 to 40) and Gen Z (ages 18 to 24) investors were asked about financial concerns and 2022 outlooks. Inflation was identified as the main concern across both generations, while respondents named cryptocurrency investing as the strategy they believe to be most stable.

Attitudes toward cryptocurrency

Cryptocurrency investors have experienced massive fluctuations in value. For example, Bitcoin soared above $69,000 in November 2021 but dipped below $34,000 in January 2022.

In addition to volatility, crypto remains poorly regulated and is a popular target for cybercriminals. In fact, these cybercriminals stole billions of dollars in digital currency in 2021.

Despite that, Fundrise survey respondents name cryptocurrency as the most stable investment option by far. Here's what respondents say are the most stable financial strategies:

  • Cryptocurrency: 23.1%
  • 401(k): 11.5%
  • Real estate investment funds: 11.1%
  • Mutual funds, exchange-traded funds (ETFs), hedge funds or other index funds: 11.0%
  • Fixed income (example: bonds): 10.0%

While more than half of respondents report owning crypto — some of whom undoubtedly lost money in 2021 — more than 60% say they have plans to increase their future holdings.

Millennial, Gen Z investors embrace risk

In seemingly conflicting results, the top attribute chosen by respondents to describe cryptocurrency is "risky" (43.0%). However, they also name it the investment type with the highest potential for reward.

In a separate survey from Bitwise, advisors also cited the potential for big rewards. Within the next year, 52% of advisors believe Bitcoin will reach $70,000 within the next year. As of Feb. 3, it’s valued at just under $37,000.

The information gap

The Fundrise report adds to a body of recent evidence indicating that investors lack reliable resources for advice and education. Most survey respondents (95%) told Fundrise they're actively learning about investment vehicles, but roughly half (49%) say they learn through discussions with friends and family.

In the Bitwise survey, 29% of advisors said social media was their source for cryptocurrency information, and 17% said they learned from friends and family. In December, 50% of U.S. adults told blockchain technology company Huobi that they were getting cryptocurrency advice from social media.

Top concerns for investors

Inflation remains a top concern for consumers and investors alike, and Fundrise respondents might hope that returns on their high-risk investments will outweigh the rising costs of everything from gas to homes.

When asked which economic force could have the worst impact on financial markets, respondents named the following:

  • 68% say inflation is either a "high" or "very high" concern
  • 65% fear the potential of another pandemic-related shutdown
  • 65% are concerned over supply chain issues
  • 64% are worried about global market uncertainty

Methodology: Fundrise commissioned DKC Analytics to field an online survey of 1,000 U.S.-based respondents, conducted from Dec. 17-20, 2021. The survey was representative of a sample of Gen Z (30%, ages 18 to 24) and millennial (70%, age 25 to 40) generation investors.