- Gen Z investors are crazy about crypto, investing in the digital currency nearly four times more than funneling money into retirement accounts. Personal finance experts say social media has catapulted the investment into the limelight, but there are some risks to keep in mind.
From memecoins to Ethereum, cryptocurrencies have become a staple in both investing and popular culture. But Gen Z’s fascination with digital currencies may be clouded by hype.
About 42% of Gen Z investors own crypto—nearly four times higher than the 11% who have a retirement account, according to a 2025 study from market search company YouGov. And they’re deeply invested in the product compared to other generations: 36% of millennials, 24% of Gen X, and 8% of baby boomer investors own crypto.
But experts tell Fortune that cryptocurrency isn’t the most sound investment, which could spell trouble for many Gen Zers who aren’t sure about what they’re buying into. Much of crypto’s popularity is chalked up to online hype: Elon Musk’s Dogecoin famously rocked the internet, and celebrities like Reese Witherspoon and Paris Hilton have publically boasted about their investments. Influencers have also gotten into legal trouble for shady ads. Kim Kardashian and Floyd Mayweather were both named in a lawsuit for promoting EthereumMax on social media.
There are several reasons the crypto world is both mysterious and exciting, experts say. And it may be that exact intrigue that pulls Gen Z to the investment, despite how risky it can be. Without employer-backed savings plans and level-headed investments, young people may be looking at financial regrets in the future.
“It’s never a bad thing for people in any generation to take interest in their personal finances,” Mark Smrecek, financial well-being market leader at Willis Towers Watson (WTW), tells Fortune. “I think as long as they’re looking at risk and reward based on what their goals are, it’s generally fine. But I do get concerned when I see over-indexing toward risky assets.”
Why crypto is so popular with young investors—and risky
Gen Z’s attraction to crypto isn’t by happenstance. Seeing their favorite stars and financial influencers brag about cashing in with the click of a button, they’re intrigued to take the bait.
“We tend to hear a lot of positive stories about a ‘get-rich-quick’ type of investment option: ‘I made a small investment, and I made this huge profit,’” Cassandra Rupp, senior wealth advisor at investment management firm Vanguard, tells Fortune. “Unfortunately, you hear less of the catastrophic loss potential.”
However, some of these stealthy social media endorsements are just a smokescreen. Several celebrities have been accused of running “pump-and-dump” scams on their followers: They will rave about a stock online to attract investors and inflate the price, then turn around quickly and sell their shares, tanking the value. Caitlyn Jenner’s $jenner, Iggy Azalea’s $mother, and Jason Derulo’s $Jason were all wrapped up in that accusation. In 2023, the Securities and Exchange Commision (SEC) also filed civil charges against celebrities including Linsday Lohan, Soulja Boy, Lil Yachty, Ne-Yo, and Akon for allegedly illegally hiding their roles in promoting crypto coins.
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“It’s a hot topic of conversation,” Rupp says. “It’s become bigger in the news outlets and media, which I think can make it look appealing without knowing what cryptocurrency is.”
Beyond their favorite online personalities promoting the products, experts say crypto is attractive for being liquid and immediate. Gen Z workers in the early stages of their careers may not be prioritizing long-term investments like 401(k)s. Crypto coins can be sold anytime, and have the potential to be lucrative in the short term.
“Oftentimes getting involved in employer-provided retirement plans seems like a long, far-off way to save,” WTW’s Smrecek says. “So they look for something that’s a little bit more liquid that, in case of an emergency, they can access.”
However, that liquidity could also be incredibly dicey. Rupp says there are several risks when it comes to investing in crypto:
- The industry is incredibly unregulated with no governing bodies
- Volatility can lead to quick drops in price
- The product isn’t backed by a currency or central banking system
- There are cybersecurity threats
Plus, the industry is still in its infancy—the first cryptocurrency wasn’t created until 2009. Meanwhile, other “traditional” investments have a long, vetted history for financial experts to work off in making sound choices.
“You’re entering into a realm that a lot of investors are just less familiar with, based on how their parents invested or their grandparents invested,” Rupp says.
The investments experts say Gen Z should be making
Personal finance experts say there’s no one exact investment or savings plan they recommend for Gen Z. But they suggest looking ahead, instead of just focusing on immediate returns.
“Folks who are not participating in their retirement plans provided by their employer, and instead looking for more individual-style investments, are giving up that employer match,” Smrecek says. “We see that as being a detriment to overall financial health.”
Mike Shamrell, vice president of workplace thought leadership at Fidelity Investments, agrees. He tells Fortune that Fidelity recommends 401(k)s as an investing option to clients in order for them to be set up down the line.
“Young investors should consider putting as much money as they can into their 401(k) now—at a minimum, as much as their employer will match—because data shows that slow and steady contributions over time can build up to a significant nest egg by retirement,” Shamrell says.
Aside from retirement plans, experts advise Gen Z to set up emergency savings to draw upon. Young investors should also consider looking into mutual funds and exchange-traded funds; portfolio diversity is important, whether that be a stock fund or bond fund, experts say. There are many ways to slice it, with no one-size-fits-all approach. And when considering investing in crypto, they recommend the curious scrutinize what they’re looking to buy.
“It’s really specific to the investor,” Rupp says. “I would just encourage anybody looking at any kind of alternative investment to really research the history of that product. See how it has ebbed and flowed, and not just focus on those couple of really successful stories.”
