Gen Z Is 4 Times More Likely to Have Crypto Than a 401(k)

It’s no secret that young investors are more crypto-curious than their elders. But new research shows just how popular digital assets are among Gen Zers and millennials.

For Gen Zers, or people who were born between 1997 and 2012, crypto is by far the most popular investment. In fact, a February report on U.S. investment trends by YouGov found that Gen Z investors are four times more likely to own crypto than a retirement account. Whereas 42% of the Gen Z investors surveyed reported owning cryptocurrencies, only 11% said they have a retirement account.

The trend holds true for millennials, born 1981 to 1996, too, albeit to a lesser extent: YouGov found that 36% of investors in this age group own crypto, while 34% have a retirement account.

The broad embrace of crypto — especially among young investors — is part of a so-called “second wave” of cryptocurrency, says Todd Dupey, senior vice president of market research at YouGov. At first, he says crypto was a bit of a “wild west.” But now, at least from a fraud standpoint, it has become much safer and more popular.

“Even larger banks and larger fintech companies are open to having [crypto] as a part of your portfolio,” he says.

Introduced in 2009, bitcoin has ushered crypto into the zeitgeist of younger, tech-savvy Americans and spurred dozens of other crypto coins, including ethereum, solana and dogecoin. In late 2024, bitcoin passed the $100,000 threshold. The Trump administration has signaled plans to relax crypto regulations.

In other words, once-niche digital currencies are poised to stay. Investing in them is easier than ever. And young investors want in on the action.

Why young investors are skipping retirement accounts in favor of crypto

Ask a financial planner whether you should invest in crypto over opening an individual retirement account (IRA), and you’ll probably be met with a lengthy, red-faced monologue.

Advisors often recommend a sort of order of operations for your money: Start an emergency fund that covers several months of expenses. Take advantage of 401(k) benefits from your employer. Open a Roth IRA. Max out a health-savings account. Then, maybe, dabble in crypto if you happen to have some fun money left over.

To be sure, that is sound financial advice. But to many Gen Z investors, it simply does not apply.

“The majority of Gen Z is still trying to figure things out,” says Dinon Hughes, a 24-year-old financial planner and partner at Nvest Financial, explaining that many young crypto investors haven’t started their careers yet and may be in entry-level jobs without access to 401(k) plans.

“With that foundation, which do you think a 20-something person is more likely to do on their own,” he asks — open an IRA or “make a couple quick bucks off crypto?”

For Yates Emerson, it's the latter. A 19-year-old based in Maine, he says his buddy on his baseball team recently got him into crypto.

“Everyone has a friend that starts them off,” he tells Money.

Through investment apps like Robinhood and Coinbase, Emerson says he was easily able to sign up and invest $2,500 into various smaller crypto coins like XRP, Sui and dogecoin. He explains that he knows they’re volatile investments, but as a college student with little-to-no expenses, he doesn’t think there will be another point in his life when he can tolerate this much financial risk.

Emerson has nothing against retirement accounts. He says he plans to open one after college when he has steady income. But with retirement likely over four decades away, it’s just not a priority.

“Right now is the perfect time for me to make high-risk investments,” he says.

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For his part, Hughes says retirement likely hasn’t even entered the minds of many Gen Zers yet. The payoff is too far down the line to visualize. That isn’t an endorsement of crypto investing, but it’s the reality many of his clients — and peers — are experiencing.

Another major barrier to retirement savings is access. Aside from 401(k)s offered by employers, the main retirement savings alternative are IRAs.

Alas, setting up an account can be challenging. Some have minimum investment amounts; others require you to go in person. Then there’s an all-too-common snag: You have to choose where to invest your contributions. This is something many young investors have learned the hard way is not automatic.

“Want to hear something that will make you feel better about yourself?” said creator Kayla Caneat in a viral TikTok from 2022. Staring deadpan into the camera, she confessed that she put money into a Roth IRA every month for two years but did not realize she needed to invest those contributions in order to maximize their benefits.

“I never invested anything. I just deposited money. I never bought a single stock,” she said. Thousands of comments poured in. Many people said they had made the same mistake, begging the question: Why is something as crucial as investing in a retirement account so tricky?

Emerson admits he and his peers are, at least in part, drawn to crypto by the allure of big, short-term gains: “That’s just how our brains work when we’re young,” he says.

But if opening an IRA was as easy as setting up a Robinhood account and buying crypto, he says he’d probably already have one.

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