How Gen Z and Millennials Are Reshaping Investment in 2025

Introduction

A generational shift is transforming the investment landscape.

Gen Z and Millennials, the world’s first digitally native investors, are increasingly turning to cryptocurrencies and decentralized finance (DeFi) as their preferred vehicles for building wealth. Disillusioned with traditional financial institutions and attracted by the promise of transparency, autonomy, and ownership, these younger investors are helping drive the rise of Web3 and reshaping the financial sector from the ground up.

In this article, you will learn:

• Why Gen Z and Millennials are drawn to crypto over traditional investment vehicles
• How this shift is disrupting the financial services sector
• The evolving role of Web3 in redefining finance
• Key challenges hindering broader crypto and Web3 adoption

The Rise of Crypto Among Younger Generations

Cryptocurrency adoption among younger generations has reached historic highs. According to Gemini’s 2024 “State of Crypto” report, over 51% of Gen Z globally have either owned or currently own cryptocurrencies, compared to only 35% of the general population. In the U.S., a YouGov America survey found that Gen Z and Millennials are far more likely to invest in crypto than in traditional assets like retirement accounts.

In fact, 42% of Gen Z investors in the U.S. own crypto, compared to only 11% who have a retirement account. Internationally, Gen Z ownership of crypto is even stronger in regions like the U.K. (53%) and France (47%). These statistics show not just a passing interest, but a fundamental realignment of investment priorities.

This crypto is not used as speculation but as infrastructure for a new financial identity.

What’s Driving This Shift? Transparency, Ownership, and Autonomy

Three key values explain why younger investors are moving toward decentralized assets:

• Transparency: Blockchain records are immutable and auditable. Unlike opaque banking systems or centralized trading platforms, users can see where their funds go and how protocols work.
• Ownership: Crypto wallets provide direct control of assets — no intermediaries, no gatekeepers. In an era where trust in institutions is low, this direct ownership is powerful.
• Autonomy: From DeFi lending to yield farming, Web3 gives users tools to manage their money without third-party involvement, resonating with a generation that prizes independence and self-direction.

This value-driven approach to investing contrasts with previous generations, who often prioritised security and institutional trust. For Gen Z and Millennials, financial empowerment is as much about values as it is about returns.

Impact on Traditional Financial Institutions

Traditional financial services are taking notice — and, in many cases, playing catch-up. Family offices, asset managers, and private wealth firms are increasingly fielding requests from younger clients for crypto exposure.

A 2024 report by Financial News London found that 39% of single-family offices had already invested in or were exploring crypto, mostly at the urging of younger heirs. Institutions like BlackRock and Fidelity have launched crypto ETFs or digital asset divisions to stay competitive.

But the pivot isn’t without tension. European Central Bank policymaker Fabio Panetta warned in 2025 that growing bank exposure to crypto could damage customer confidence, especially if speculative losses occur. This underscores the friction between legacy systems built on risk aversion and new systems built on experimentation and disruption.

Web3 Technologies: Infrastructure for a New Investment Culture

Web3, the decentralized internet powered by blockchain and smart contracts, is the foundation of this generational investment shift. It doesn’t just allow crypto investing — it reimagines how finance operates.

1. Decentralized Finance (DeFi)

Platforms like Aave, Compound, and Uniswap enable permissionless lending, borrowing, and trading without banks. These tools are not just alternatives to traditional finance; they are entire ecosystems, built for and by digital-native users.

2. Tokenization of Real-World Assets

Web3 allows real-world assets like real estate, art, or music royalties to be fractionalized and traded as tokens. For example, Rafal Real Estate in Saudi Arabia has partnered with droppRWA to tokenize commercial properties, allowing users to invest in real estate with a few dollars rather than hundreds of thousands.

3. Smart Contracts & dApps

Smart contracts power automated, self-executing agreements that remove the need for third parties. Decentralized applications (dApps) built on Ethereum, Solana, and other networks let users participate in complex financial strategies — staking, liquidity provision, governance — through user-friendly interfaces.

4. Empowered Ownership

Web3 returns control to the individual. Assets live in private wallets, data belongs to the user, and identity is decentralized. This resonates deeply with Gen Z’s emphasis on digital sovereignty and financial independence.

Challenges Hindering Broader Adoption

Despite its promise, Web3 and crypto still face major hurdles that could slow mainstream acceptance:

1. Regulatory Uncertainty

One of the biggest threats to broader crypto adoption is the lack of regulatory clarity. While the EU’s MiCA framework provides some direction, DeFi, NFTs, and DAOs remain largely unregulated, leaving investors and developers in a legal grey area. Inconsistent approaches from the U.S. SEC, China’s bans, and fragmented global policies create compliance risk.

2. User Experience & Accessibility

Let’s be honest: many Web3 platforms are difficult to use. Wallets, seed phrases, and gas fees are confusing for newcomers. Until interfaces become as easy as banking apps or social media platforms, mass adoption will be limited to tech-savvy users.

3. Security Risks

Ironically, decentralization doesn’t mean invincibility. In the first half of 2024 alone, Web3 projects lost $1.4 billion to hacks and exploits. Without the safety nets provided by traditional finance (like FDIC insurance), every user is their own custodian, raising the stakes of simple mistakes.

4. Scalability and Performance

High gas fees, network congestion, and slow transaction times plague many blockchains. While Ethereum’s rollups and Layer 2 solutions help, the tech still lags behind the instant speed of Visa or PayPal. Scalability remains a major obstacle to real-time, high-volume applications.

5. Public Understanding and Education

Crypto is complex. Many users simply don’t understand the risks or mechanics behind what they’re using. More accessible education and clearer communication are essential for ethical onboarding into this new system.

Conclusion

Gen Z and Millennials are not just investing differently — they’re thinking differently about what investment even means. They see crypto and Web3 not as trends, but as tools to build financial ecosystems that are more transparent, accessible, and equitable.

Their values, transparency, ownership, and autonomy are shaping not just their personal portfolios but the future of finance itself. Financial institutions that want to stay relevant will need to listen to this new generation, understand the tools they prefer, and adapt to a landscape where users expect more control and less centralization.

Crypto is no longer a fringe bet. For millions of young investors, it’s the foundation of a new financial reality.