New Schwab Survey Shows Crypto No.1 Investment for Millennials

A new survey from asset management firm, Charles Schwab, has found surging interest in cryptocurrency-based exchange-traded funds (ETFs) among investors. The survey, titled ‘ETFs and Beyond 2024’ found that 45% of respondents plan to invest in crypto ETFs, up from 38% last year. 

It also found that among millennial ETF investors, crypto-based ETFs were the preferred asset class, ahead of US equities ETFs and bonds/fixed-income ETFs. Interest in crypto ETFs was also found to decline with age: millennials had the most interest, followed by Gen Xers, with Boomers bringing up the rear.

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Survey Reveals “Stunning” Level Of Interest In Crypto ETFs

Charles Schwab has conducted surveys on ETF investor behaviour for the past 10 years in collaboration with Logica Research. This latest instalment included 2,200 respondents in total: 1000 ETF investors; 1000 non-ETF investors; and an additional group of 200 investors who began investing after 2020 referred to as Generation Investor (Gen I). The survey was conducted between July 2 and July 20, 2024.

Sixty-two percent of millennials plan to buy crypto-based ETFs in the next year, making crypto ETFs far and away the most popular choice among millennial ETF investors (US equities-based ETFs came in second at 48%). Gen X ETF investors were less sure about crypto ETFs, with only 44% saying they plan to buy in the next year, while Boomers had little interest in crypto with only 15% planning to buy.

Overall, the survey found a surprisingly high 45% of all ETF investors plan to purchase crypto-based ETFs within the next 12 months, prompting Bloomberg’s Senior ETF analyst, Eric Balchunas to post on X / Twitter describing the result as “pretty stunning”:

Almost half of Schwab’s respondents said they plan to invest in crypto ETFs, more than bonds, international, alts. Pretty stunning.

Eric Balchunas, Bloomberg Senior ETF Analyst

Millennials More Confident They Can Outperform The Market, But Also More Worried About Disaster

The survey revealed that higher rates of millennial ETF investors prefer to take on higher risk investments with the potential for greater returns than either Gen X or Boomer investors. Sixty-one percent of millennials said they preferred this higher risk strategy, compared to 57% and 51% for Gen Xers and Boomers respectively. Unsurprisingly, given their preference for risk, millennials also reported higher levels of anxiety around their investments than the older generations.

Interestingly, millennials said they have higher levels of confidence in their ability to outperform the markets, while at the same time saying they’re less confident their portfolio could survive an economic disaster, such as a deep recession.

The survey doesn’t explore why millennials have a bigger appetite for risk than older generations, but it could be related to millennials’ lower levels of home ownership compared to older generations, particularly boomers. According to economist Mark Zandi, the inability to access the housing market impacts the way people think about their finances in general:

If they feel like they’re locked out of owning a home, it colors their perceptions about everything else going on in their financial lives.

Mark Zandi, Chief Economist at Moody’s Analytics

Related: Survey Shows Aussie Investors Shun Real Estate, Flock to Crypto as Ownership Exceeds Global Rate

It could be that many millennials are seeking out high risk, high return investments — like cryptocurrency — to level up their wealth and allow them to finally access an increasingly unaffordable housing market.