Generational Philosophies on Investing in Crypto [Survey]

Cryptocurrency investing is popping up everywhere. It’s hard to avoid the chatter around it even if you try, what with celebs like Elon Musk, Mark Cuban, Snoop Dogg, and Richard Branson investing in crypto assets. Millennials have dominated the press as the most crypto-friendly generation, but they aren’t the only ones on the bandwagon. Investors across all generations and micro-generations – like xennials, who fall between millennials and Generation X – are investing in cryptocurrencies.

We surveyed over 1,000 people born between 1965 and 1997 to learn how millennials, xennials, and Gen Xers are approaching cryptocurrency investing. What coins do they prefer to buy? Where do they turn for cryptocurrency information? And what other emerging investments are they interested in? Read on to see what we discovered.

Key Takeaways

• 3 in 4 crypto investors said they’d made money on their holdings.
• Millennials, on average, had 12% of their total investment portfolio in cryptocurrency – the most of all the generations we looked at – but xennials were the most likely to say they’d made money. 
• Overall, curiosity was the most common reason people cited for wanting to invest in cryptocurrency.

Who Owns the Most Crypto?

The first part of our study breaks down the crypto investments made by each generation to see how they stack up next to one another.

The popularity of crypto assets varied by age. While it was xennials who reported the largest total investment in crypto assets, cryptos actually made up a larger percentage of millennial portfolios. Crypto assets represented 12% of the average millennial portfolio, compared to 9.2% of the average xennial portfolio and only 6.3% of the average Gen Xer portfolio.

Despite this larger proportional holding, millennials were not the most likely to report making a profit in cryptocurrency investing. Xennials, with the largest total investment, were the most likely to make a profit off crypto assets at 80.5%, compared to 76.2% of millennials and just 71.5% of Gen Xers. That said, it’s worth noting that 3 in 4 people profited off cryptocurrency investments overall.

Each generation showed an affinity for different coins, too. While Bitcoin was the most popular coin across all generations, millennials and Gen Xers’ favorite altcoin (coin other than Bitcoin) was Ethereum. Founded in 2014, Ethereum was not intended to be used as a currency but rather to be used as a way of creating contracts between people without needing a middleman. The coin is currently the second-largest cryptocurrency by market capitalization.

Unlike millennials and Gen Xers, xennials preferred both Bitcoin Cash and Dogecoin to Ethereum. Millennials, however, were on the Dogecoin wagon. A higher percentage of millennials owned the coin than any other generation, even if they still preferred Ethereum and Bitcoin to the dog-based crypto asset.

The generations were divided when it came to their preferred trading platform. Millennials were the most likely to opt for Coinbase, while xennials preferred Bitcoin IRA, and Gen Xers were the most likely to report using Bitcoin Armory. Around 1 in 3 millennials reported using Coinbase compared to 1 in 4 xennials who reported trading on Bitcoin IRA. Robinhood was the least popular trading platform across all three generations, not even making it into the top five for Gen Xers.

Why Invest in Crypto?

Now that we know a bit about how people invest in crypto assets, the next question we were dying to ask is why? We asked investors of each generation what led them to start investing in crypto. Their answers may surprise you.

The most common reason to start investing in cryptocurrencies across all generations was curiosity. The second most common reason was a belief that it would lead to higher returns. Interestingly, though, millennials were the least likely to attribute their start in crypto investing to this belief.

If they aren’t investing in it for high returns, why are millennials buying cryptocurrencies? Perhaps the answer is diversification. Millennials were the most likely generational group to say they started investing in cryptocurrency to diversify their portfolio. Diversification is important when investing because it helps reduce the risk of one investment wiping out your entire portfolio – the “don’t put all your eggs in one basket” theory. Experts also say you should diversify your cryptocurrency holdings in case one coin takes a downward turn.

Xennials were the most likely to start investing in cryptocurrencies because they believed they offer security and transparency and will give them greater independence. Gen Xers were the least likely to believe those same ideas; however, they were more likely than both millennials and xennials to view cryptos as the currency of the future.

Gen Xers, perhaps surprisingly, were the most likely to start investing because they thought cryptocurrency would make them rich. They were also the most likely to say they started investing to be part of the cryptocurrency revolution.

Who Do You Ask?

So once you’re in the crypto game, how do you keep up? To find out, we asked our respondents how they stay up to date on all things crypto.

When asked where they turn for crypto information, both millennials and Gen Xers were the most likely to look to friends. Xennials were more likely to look to social media for information, preferring to learn about cryptocurrencies from Facebook before turning to friends. Xennials were also more likely than the other generations to turn to mainstream news sites for crypto information.

Almost 37% of xennials used Facebook to get crypto information, compared to 34.6% of Gen Xers and only 29.8% of millennials. Facebook remained the most popular social media platform for crypto information. It was more popular among all three generations than YouTube, Instagram, TikTok, and even Twitter – despite Elon Musk’s affinity for the site. Speaking of Musk, a little more than 39% of investors said they view Elon Musk as a helpful figure in the world of cryptocurrency, despite the price fluctuations his commentary can cause, such as the recent fall in Bitcoin after he tweeted a breakup meme.

Gen Xers were the most likely generation to turn to a celebrity like Musk for crypto news, while millennials were the least likely. Gen Xers were also the most likely generation to get information from family members, followed closely behind by millennials. As with friends, xennials were the least likely generation to turn to family when making cryptocurrency investment decisions.

Who Should Have Asked More?

We next wanted to know how much research people put into cryptocurrency as an investment, and whether or not it was enough.

No matter where you turn for your information, investing in cryptocurrency can be confusing. The vast majority of investors across all generations said they wished they’d known more before investing. Gen Xers, at nearly 83%, were the most likely to say they wished they knew more beforehand, followed by just over 80% of xennials and around 78% of millennials.

It’s important to know the facts before investing in cryptocurrency; otherwise you’re more likely to wind up with buyer’s – or investor’s – remorse. Xennials knew this better than most. They were the most likely generation to regret investing in cryptocurrency. Just over 49% of xennials said they wish they hadn’t invested in cryptocurrency, compared to 48.4% of millennials who regretted their decision to do so and 46.2% of Gen Xers who felt the same.

Perhaps what helped prevent investor’s remorse for Gen Xers was that they were the most likely generation to report having done a lot or some research before investing. Millennials were the most likely to say they did a lot of research at 32.6%, but on the other hand, they were also the most likely to admit to having done no research at all. Three percent of millennials said they did no crypto research before investing; a risky move as picking crypto coins is subjective so it can be very hard to know which coin to buy without any prior knowledge. Xennials were the most likely to say they did a little research before their investments.

If Not Crypto, Then What?

When not investing in cryptocurrency, what assets do people prefer to invest in?

The most popular investment among all three generations was real estate. At over 46.5%, Gen Xers were the most likely to invest in this, followed by xennials (42.2%) and then millennials (37.2%). Real estate investments held the most intrigue across generations, too, with over half of respondents saying they’re very or extremely interested in investing in real estate.

Gen Xers were the most likely generation to invest in collectibles, which are tangible assets that could theoretically increase in value. Theoretically is the key word, however, as there is no guarantee the price will rise. And even if it does, experts warn the assets can be hard to sell and price, so it’s best to buy them for enjoyment as well as (potential) profit.

Another rising investment is non-fungible tokens (NFTs). These are digital assets which represent real world objects, such as a piece of art or music. They’re often traded with cryptocurrencies and are usually encoded with similar underlying software. Nearly 1 in 5 crypto investors said they currently invest in NFTs. Gen Xers were the most likely generation to invest in these digital assets, but xennials and millennials weren’t far behind. That said, of all asset classes we considered, respondents were the least likely to say they were very or extremely interested in investing in NFTs.

One asset class to keep an eye on in the future is wine and alcohol. While this asset class was held by the fewest respondents across all three generations, it held the second-highest interest. Approximately 43% of crypto investors across all three generations said they’re very or extremely interested in investing in wine and/or alcohol.

How to Decide if Cryptocurrency is for You

Investing in cryptocurrency is a personal decision. When timed right, you can make a lot of money off these digital assets, but get your timing wrong and you could end up with investor’s remorse. The best thing you can do for you and your portfolio is to research cryptocurrency before investing. You’ll also want to ask yourself important questions before investing, such as why you want to buy crypto, how you’ll invest, and if your stomach is up for the roller coaster ride you’re sure to be getting on.

Methodology

We surveyed 1,044 people in the Generation X, xennial, and millennial generations about their experiences investing in cryptocurrency. People had to be in one of those generations and report that they were currently invested in cryptocurrency to qualify for the survey. Respondents were 37.1% women and 62.6% men. Three respondents were nonbinary. The average age of respondents was 36.9. The survey was conducted June 2, 2021, through June 9, 2021.

Respondents were asked to report the amount of money they have invested in cryptocurrency and the percentage of their total investment portfolio that cryptocurrency accounted for. Using the averages of these two data points, we calculated the average value of cryptocurrency investments across the three generations, as well as the value of the rest of their portfolios.

When asked about the reasons they were motivated to invest in cryptocurrency, respondents were instructed to select up to their top three reasons. When asked where they get their information on investing in cryptocurrency, respondents were instructed to select all that apply. For both sets of data, percentages therefore won’t add to 100.

Limitations

The data we are presenting rely on self-report. There are many issues with self-reported data. These issues include, but are not limited to, the following: selective memory, telescoping, attribution, and exaggeration.

Fair Use Statement

Being informed is the most important aspect of any investment decision. Hopefully the findings from our study will help inform your future investment decisions. If you think our data can help others as well, we’d love for you to share it with them. Please do so only for noncommercial purposes, however, and include a link back to this page so our creators can receive the credit they deserve. Thank you.