From Bitcoin to meme coins like DOGE, digital currencies have become a staple in popular culture as well as in the investing world. The industry is at a turning point in 2025, with regulatory developments and global policy paving the way for a future where cryptocurrencies may become fully integrated into the financial system. And when it comes to the adoption of the crypto trend, Gen Z is leading the pack. According to recent data, Gen Z owns more crypto than any other generation (42% of Gen Z investors compared to 24% of Gen X, 36% of millennials, and 8% of baby boomers).
And this trend seems only to be growing stronger this year among Gen Z, which isn’t at all surprising. After all, digital gold is exhilarating and innovative, and for a generation that frequently leaves home without cash, it’s natural to be drawn to purely digital assets. While Gen X and millennials choose credit unions and banks for investing, Gen Z prefers crypto exchange apps for this endeavor, illustrating one of the many differences between these generations. However, financial experts believe that Gen Z may not fully understand the risks associated with cryptocurrencies and that hype may cloud their judgment.
Is Gen Z getting carried away with digital assets?
There’s nothing wrong with people taking an interest in their personal finances, no matter the generation they’re in, but it’s paramount to consider the risk and reward based on one’s unique goals when investing. Cryptocurrencies have become a hot topic for conversation, so naturally, Gen Z’s are drawn to them, especially because they are immediate and liquid. However, getting involved in crypto without understanding its risks can lead to devastating losses. Cryptocurrencies are highly volatile, and before choosing them as an investment, experts recommend that every investor should assess their risk tolerance and figure out whether they are really prepared to invest in crypto. If not, there are other alternatives available, such as opting for btc futures contracts, which are considered safer than owning crypto. This is because they have positions and price limits that allow you to reduce your risk exposure to the asset class.
If an investor is risk averse, it is often better for them to consider other asset classes that offer more stability, such as CDs, bonds, and dividend growth stocks, to name a few. Unfortunately, Gen Z believes in the tales of instant riches, and this is one of the reasons why they choose cryptocurrencies for investing, without first weighing the risks and ensuring they can navigate volatility effectively. What’s even more concerning is that less than a third of Gen Z work with a financial advisor when managing their investments, and the reason for that is that many of them feel very confident that they can handle things on their own. This overconfidence can negatively affect investment returns, as frequently happens in the crypto space, and it leads individuals to overestimate their own knowledge and skills and make irrational decisions that are irreversible and often devastating.
Gen Z is getting most of their financial advice from social media
Gen Z are called digital natives for a reason, as they represent the first generation to grow up with the Internet as part of their everyday lives. Unsurprisingly, they primarily turn to social media platforms to learn about finances and investing. Furthermore, they are more likely than Gen X and millennials to rely on influencers to get the information they need. However, there’s a significant risk in that, as despite their large followings and impact, influencers are not financial professionals, and their opinions can’t replace guidance and advice from a skilled expert.
Furthermore, while online communities such as Discord and Reddit can be helpful, allowing investors to ask questions, learn from each other, and connect with others who share the same interest in digital currencies, it’s not a good idea to rely on them when making investing decisions. After all, it’s essential to remember that every individual has unique circumstances, and an investment that is suitable for someone may not necessarily be suitable for another investor.
How should Gen Z approach cryptocurrencies?
Cryptocurrencies are complex and volatile, which is why it’s essential to approach them with discipline and responsibility. Instead of jumping in because of the hype, Gen Z should take the time to learn about all the different concepts within the crypto space, including DeFi, NFTs, and blockchain, to name a few. Furthermore, they should use reputable sources when searching for information about digital assets, such as crypto platforms, which offer beginner-friendly courses covering essential aspects of the industry, including fundamentals of investing and recommended strategies.
Furthermore, many influencers promote specific coins for personal gain, so investors should always do their own research. This is a golden rule of crypto investing, and that’s because research can offer valuable insights into the potential of a specific project and the real opportunities it can offer. Not all crypto projects are worthwhile, so it’s essential to determine which ones are. Moreover, research allows investors to determine whether a project is too risky for them and look for alternatives to suit them better. The crypto space has evolved considerably, and there are now plenty of options available for everyone, including those who are apprehensive about owning Bitcoin directly but still want to gain exposure to this asset class. One option is to explore ETFs instead, which enable investors to spread their risk across various assets instead of focusing on only one. Alternatively, there is the possibility of opting for cryptocurrency futures, which provide regulated exposure to crypto assets, which is a major point in a volatile space with wild price fluctuations.
Since crypto is highly speculative, Gen Z should not rush into putting all their money into a project they love. Instead, a rule of thumb is to start small and invest only the amount of money one can afford to lose. Oftentimes, investors engage with cryptocurrencies before they chase quick gains; however, this isn’t a good approach, as it can have devastating consequences, leading to substantial losses. It is best for investors to keep a long-term mindset and remember their goals and vision for buying cryptocurrency, as this will offer them perspective and ensure they won’t make impulsive decisions just because of the fear of missing out.
The bottom line
Gen Z’s interest in cryptocurrency stands as a testament to their openness to alternative financial systems and digital developments. While this generation can contribute to the adoption of digital assets, it’s essential to remember that crypto is still in its infancy and should be approached with caution.
