Millennials Lead the Charge in Crypto ETF Investment, Schwab’s Survey Shows

• Millennials’ strong interest in crypto highlights a generational shift in investment strategies.
• U.S. equity remains dominant, but crypto ETFs are quickly gaining favor across all investors.
• Bonds and international equities see reduced interest, with safer assets still relevant.

A recent survey by Charles Schwab shows changing preferences in ETF investments, with cryptocurrencies becoming a top choice, according to Bloomberg ETF analyst Eric Balchunas. The survey, which included responses from different investor generations, found that U.S. equities are still the most popular asset class.

However, crypto is rapidly gaining ground, especially among Millennials. This rising interest shows a growing demand for alternative assets as younger investors look to diversify their portfolios beyond things like bonds and international equities. These trends show significant changes in how people will allocate their portfolios in the coming year.

Cryptocurrency Gains Momentum Across Generations

Almost half of Schwab’s survey respondents (45%) plan to invest in crypto ETFs. This is a notable shift, as crypto now is more popular than bonds, international equities, and alternatives. U.S. equity is still the top asset class, with 55% of investors favoring it.

However, the growing interest in cryptocurrencies shows a diversification trend, as more investors are looking beyond traditional financial instruments. Millennials, in particular, are most excited, with 62% planning to invest in crypto, compared to 44% of Gen X and only 15% of Boomers.

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Despite the allure of cryptocurrencies, traditional asset classes like bonds and fixed income are still relevant. According to Schwab’s findings, 44% of investors still want to allocate funds to bonds. This shows that ETF investors are taking a balanced approach, and still prioritizing safer options even as they explore new alternatives.

Real assets, like commodities and real estate, are attracting 40% of respondents, showing the appeal of tangible assets in an uncertain market. Also, Nate Geraci, president of ETFStore, notes that international equities are seeing less interest, particularly among Boomers and Gen X, while Millennials are more interested in global exposure.

Generational Differences in Portfolio Strategies

The survey also shows notable generational differences in portfolio strategies. Boomers and Gen X still lean heavily on U.S. equities, with 65% and 56%, respectively, favoring these traditional investments.

Millennials, on the other hand, are interested in a broader range of assets, investing not only in U.S. equities but also showing stronger preferences for crypto, real assets, and alternatives.