Study Results: 31 Percent of Young People in Australia Invest in Crypto Assets

Previously, cryptocurrencies were the most common investment for Gen Z. This is a trend likely driven by a group growing up in an age of technological change, social media, and easier investment access, according to a new report by the CFA Institute and Financial Industry Regulatory Investor Education Foundation. Authority quoted from CNBC.

However, while young people may still be able to afford to take a lot of investment risks compared to the older generation, using cryptocurrencies as the key to an investment portfolio remains a risky bet due to its volatility, according to experts.

Fifty-five percent of Gen-Z investors are currently investing in crypto, according to a joint Finra-CFA Institute report. Looking at Gen Z as a group born in the late 1990s into the 21st century, that means the oldest members are in their mid-20s, and the report is based on an online survey of people in the US aged 18-25.

Quoting CNBC, individual stocks ranked second, held by 41% of these investors, followed by mutual funds (35%), non-fungible tokens (25%) and exchange-traded funds (23%), the report said.

By comparison, mutual funds are the most common holdings among Gen X investors, the group born between 1965 and 1980. Forty-seven percent hold mutual funds, followed by individual stocks (43%) and cryptos (39%).

Gen Z’s relatively high concentration of cryptocurrencies, examples including bitcoin and ethereum, and individual stocks could raise concerns if investors do not adequately consider and manage risk, according to Gerri Walsh, president of the Finra Investor Education Foundation.

“While mutual funds and most ETFs typically offer a degree of diversification, the same cannot be said when buying individual cryptocurrencies and stocks,” said Walsh.