Gen Z investors prefer crypto, but experts caution against risks.

According to a joint report by the CFA Institute and FINRA, Gen Z investors prefer to invest in cryptocurrency due to their exposure to technology, social media, and easy investment access. However, experts caution that investing solely in cryptocurrency can be risky due to its volatility. Gerri Walsh, President of FINRA’s Investor Education Foundation, states that while mutual funds and most exchange-traded funds offer diversification, the same is not true for cryptocurrency and individual stocks. Walsh adds that crypto investments are only a concern if the investor isn’t adequately considering and managing the risk that comes with the investment. The report reveals that 55% of Gen Z investors currently invest in crypto, along with individual stocks, mutual funds, nonfungible tokens (NFTs), and ETFs. In comparison, mutual funds were the most common investment for Gen X investors, followed by individual stocks and crypto. The report warns Gen Z investors to carefully assess risk and avoid being solely influenced by FOMO or social media influencers when making investment decisions. The report coincides with the SEC’s lawsuit against blockchain and Binance, two of the largest and well-known crypto exchanges in the world, for various alleged securities violations, including selling unregistered securities to the public and failing to register with the SEC as securities exchanges in the US.