Recent Coinbase Survey Reveals Flaws in Traditional Finance, Says Armstrong

A recent survey conducted by Coinbase and Ipsos has unveiled that younger investors in the US are participating in trading more frequently, taking increased risks, and allocating a larger portion of their investment portfolios to cryptocurrencies.

According to Coinbase CEO Brian Armstrong, the findings demonstrate that younger generations feel excluded from conventional pathways to wealth, and are turning to alternative assets like crypto.

The “State of Crypto” report from Coinbase presents data supporting this trend. The Ipsos-run survey indicates that Gen Z and millennial investors are far more active in trading compared to their older counterparts.

Portfolio Allocation and Trading Behavior

The survey, which included 4,350 adults in the US, reveals that stock ownership remains similar across age demographics (47% for younger investors, 50% for older). However, the composition of their portfolios diverges significantly.

Young investors attribute 25% of their investments to non-traditional assets, such as cryptocurrencies and derivatives, which is thrice the 8% reported by older generations. Additionally, 80% of younger respondents are eager to explore new investment opportunities sooner than others, and 84% express a desire for platforms that offer a broader array of assets.

Trading habits are also evolving, as nearly 30% of younger investors execute trades at least once every week, in contrast to just 10% of older investors. Younger individuals are more inclined to adopt aggressive trading tactics; 19% utilize margin trading compared to 8% of older individuals.

The call for constant market availability is evident, with 63% of younger investors interested in having 24/7 access to stock markets and strong enthusiasm for crypto derivatives and DeFi lending.

Beyond Traditional Avenues

The report indicates that many younger adults (73%) believe wealth creation through traditional avenues is becoming increasingly difficult, compared to 57% of older individuals. Despite 47% of younger investors owning stocks, they are twice as likely to hold cryptocurrencies and agree that crypto opens financial opportunities for them.

Around 70% know someone who has made a significant profit from trading crypto, reinforcing the perception that potential gains lie outside conventional systems.

Embracing Copy Trading and Social Influence

The sources of investment insights are also changing. Younger investors prefer self-directed strategies and rely on their research instead of traditional advisors, drawing inspiration from social media platforms like TikTok, Reddit, and YouTube.

Approximately two-thirds of younger investors indicated they would consider participating in copy trading from friends or established traders, a stark contrast to under a third of older investors.

Armstrong characterized these findings as a signal that the current system fails to meet the younger generation’s expectations in terms of access and potential returns. This underscores the need for tailored products and continuous market access to cater to emerging retail investors.