A new report from Bernstein Research highlights a generational shift in financial preferences from young investors toward cryptocurrencies.
A new report from Bernstein Research highlights a generational shift in financial preferences from young investors toward cryptocurrencies. This will be beneficial to U.S. brokerage Robinhood, an analysis released Thursday indicates.
According to the report, which cites FINCA data, 48% of crypto owners are under 34 years old, an astonishing 55% of Gen Z traders in the U.S. like to invest in cryptocurrencies. This has led Bernstein to reconsider some of its ratings for various publicly traded finance and tech companies.
According to the analysts, Robinhood (Nasdaq: HOOD) is particularly well-positioned to take full advantage of the trend. The report places at about 65% the portion contributed by those aged 43 and below to its assets under custody.
The firm has lately acquired the crypto exchange Bitstamp, which will see it expand its crypto financial services including staking, lending, derivatives, and more token listings.
FINRA's research shows that the younger generation believes the core banking system is expensive, slow, and highly antiquated. Instead, they're interested in DeFi and blockchain.
"GenZ likes their finances on-chain and not online," the analysts write, adding that while banks are pushing digital banking platforms, Gen Z finds these apps "clunky and opaque."
This is evident from the increasing usage of stablecoins, with about 27 million wallets actively using them for monthly payments. According to the report, nearly $160 billion in U.S. dollar stablecoins are live on the blockchain today, while $2.9 trillion is settled quarterly.
Bernstein analysts say this generational divide in financial behavior is going to shape the future of banking and investment platforms: "As Millennials and GenZ start to become a material part of household wealth, the way they manage finances would determine what the financial platforms of the future look like," the report states.
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