Crypto continues to gain momentum among younger investors, with 62% of Millennial ETF investors planning to allocate a portion of their portfolios to digital assets in the coming year, according to the 2024 ETFs and Beyond study by Charles Schwab.
For all investors surveyed, crypto ranks as the second most popular asset class, signaling a major shift in investment preferences. This marks a significant increase in interest compared to older generations, where only 44% of Gen X investors and 15% of Baby Boomer investors expressed similar intentions.
The survey, conducted between July 2 and 20, collected opinions from 2,200 investors, including 1,000 ETF investors and 200 other respondents who started investing after 2020.
The study found that Millennials are particularly eager to take advantage of alternative asset classes such as cryptocurrencies, which have become the second most popular investment choice for this group, just behind U.S. stocks.
The report noted:
“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, this demographic is significantly more likely to pursue high-risk, high-reward strategies than Gen X (24%) and Baby Boomers (11%). .
Cautious optimism
The appeal of digital assets to millennials appears to align with broader investment patterns identified in the report. This generation is also more likely to embrace specialty ETFs, including those focused on long/short strategies, volatility hedging, and smart beta products.
In addition to cryptocurrencies, Millennials showed 45% interest in real assets like commodities and infrastructure and 47% interest in bonds and fixed income.
However, the survey also revealed caution among younger investors, with around 66% of Millennials feeling confident in their ability to outperform the market, but acknowledging concerns about recovering their portfolio in the event of a recession or economic event. “black swan”.
This cautious optimism is influencing their investment decisions, with many prioritizing diversification through crypto as both a hedge against inflation and an opportunity for growth. Meanwhile, crypto has become a staple of millennial portfolios for reasons beyond speculation.
Nearly half of those surveyed said their interest in digital assets stems from a desire to align their investments with their personal beliefs and values, signaling a shift in how this generation views wealth creation.
Millennials are also the most 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 highlighted the growing role of education in Millennials’ investment decisions. As more financial institutions, like Schwab, introduce crypto and blockchain-based products, the availability of information about these assets increases.
In fact, Millennials were more familiar with direct indexing and similar customization options than older generations, with 80% expressing interest in further exploring this method of investing.
Despite a volatile market, the study found that nearly 40% of Millennials remain bullish on cryptocurrencies, a reflection of their long-term outlook on the asset class. The Schwab survey suggests that as crypto products evolve, they will continue to attract younger investors eager to diversify and personalize their portfolios.
As crypto gains traction, financial institutions are expected to further innovate with ETFs and other financial products tailored to the preferences of a younger, more tech-savvy investor base. The results indicate that digital assets are not just a passing trend but are becoming a fundamental part of next-generation portfolios.
