Binance data shows Gen Z turning to ETFs over single stocks

Generation Z is changing its way of investing in the markets monitored by Binance. According to an analysis by Binance Research, ETFs hold a more significant place in their stock transactions. In early August, these funds represented 25% of the transaction volume for this cohort. Young investors make fewer trades and use leveraged products less than older generations. This trend also concerns tokenized stocks and perpetual contracts linked to traditional markets.

ETFs gaining ground with Gen Z investors

In July, ETFs represented 21.9% of Generation Z’s net stock flows, up from 18.5% in June. At the same time, the share allocated to individual stocks fell to 74.2%, from 77% previously. Binance Research compared several product categories to measure these changes. The study covers direct stocks, tokenized stocks, and traditional finance perpetual contracts.

Transaction frequency also distinguishes this cohort from other generations studied. Generation Z executes fewer trades on the three analyzed products, according to Binance Research data. On TradFi perpetual contracts, it makes 13 monthly trades on average, compared to 17 for Millennials and 16.5 for Generation X. Furthermore, 22% of Generation Z’s stock investment accounts have never placed a sell order.

Binance sees limited use of leverage among younger traders

Differences also appear in the use of leveraged and inverse ETFs. According to Binance, 88.2% of Generation Z’s TradFi perpetual accounts have recorded no activity on these products. This proportion reaches 84.5% among Millennials and 85.9% for Generation X. The data thus show more limited use of these instruments among the young accounts studied.

The analysis also notes a significant share of accounts dedicated only to buying. Among Generation Z, 22% of accounts have never placed a sell order, compared to 19% for Generation X and 9% for Baby Boomers. Millennials have the highest share of buy-only accounts, at 30%. Among the most purchased assets are Broadcom, Tesla, and the Schwab US Dividend Equity ETF.

bStocks accelerates in the tokenized stock market

At the same time, Binance bStocks briefly surpassed Kraken’s xStocks among tokenized stock issuers. On Tuesday, bStocks showed a value of 610.6 million dollars, compared to 601.2 million for xStocks, according to Token Terminal data. On Friday, the ranking reversed, with 610.7 million for xStocks and 579.6 million for bStocks. Ondo Finance then held the top spot, with 971.8 million dollars.

The tokenized stock market was also continuing its progress. RWA.xyz showed a distributed value of 2.43 billion dollars on Friday, about 5% more over thirty days. However, Binance specifies that its direct stock investment product reached significant scale only in June. The observation period remains short to identify durable trends regarding Generation Z’s investment habits.

In the short term, available data mostly show an increase in the place of ETFs and a more measured activity among young investors. This trend is reflected in several products covered by the analysis, notably individual stocks, ETFs, tokenized stocks, and perpetual contracts linked to traditional markets.

Generation Z thus seems to favor a less intensive trading approach, with fewer transactions and more limited use of leveraged products. ETFs simultaneously occupy a growing place in their flows, while tokenized stocks continue to gain ground in the market. The coming months will determine whether these behaviors observed on Binance mark a lasting trend or still correspond to an adaptation phase for this new generation of investors.