Cryptocurrency Within Generations
According to a study, 94 percent of cryptocurrency buyers are Gen Z/Millennials, but Gen X outspends them.
With Bitcoin reaching a trillion-dollar valuation for the first time and growing interest in Ethereum and NFT art, cryptocurrency has been making a lot of noise.
There has been a lot of speculation about the viability of digital currency over crypto’s 13-year existence. While the futures of Bitcoin and Ethereum are still being determined, some aspects of what is driving crypto growth today are clear.
We considered alternative approaches to analyzing our data in order to better understand who is a crypto buyer. We wanted to know who is paving the way for cryptocurrency, if it is the way of the future.
Before we dive into cryptocurrency spending, we’d like to get a better understanding of how cryptocurrency buyers differ by generation:
The general perception of cryptocurrency is that it is a market for young people, and studies support this.
Buyers in the Gen Z and Millennial categories account for 94 percent of all crypto buyers, compared to just 6.14 percent of all buyers over the age of 40.
A closer look reveals that Gen Z buyers outnumber Gen X buyers by 3.5x and Boomer buyers by 14.3x.
Millennial buyers outnumber Gen X buyers by a factor of 15.5x and Boomer buyers by a factor of 62.9x.
So crypto is not only a young buyer’s game, but it is, by a wide margin.
According to the data, there is a clear relationship between age and the likelihood of purchasing cryptocurrency — the older you are, the less likely you are to make a purchase. Who, however, is spending the most money on cryptocurrency?
Crypto buyers from Generation X outspend buyers from Gen Z and Gen Y.
We wanted to look at how much crypto buyers in our age groups were spending now that we knew who was buying it.
Except for the Boomer bucket, which accounts for only 1.2 percent of all crypto buyers, the data showed that each older age group purchased more cryptocurrency than the buyers in the previous younger bucket.
Despite accounting for only 4.9 percent of all crypto buyers, Gen X buyers spent an average of $9,611 on cryptocurrency over the course of a year, or:
- 1.6 times more than Gen Z purchasers
- 1.1 times more than Millennial purchasers
Older people have more spending power and disposable income because they have had more time to advance in their careers and have access to large lines of credit.
However, how those people are spending their money on cryptocurrency — especially when compared to younger buyers — is surprising.
Younger Gen Z and Millennial crypto buyers outnumber older buyers by a factor of 15x. So it’s easy to attribute this to older investors’ apprehension about an emerging and volatile market and younger buyers’ willingness to take on more risk.
The data, however, tells a different story.
It clearly shows that not only are Gen X crypto buyers outspending younger buyers, but that there is also a correlation between increasing age and higher crypto spending.
So, while younger crypto buyers outnumber Gen X buyers, Gen X buyers spend more on cryptocurrency on average.
Millennial cryptocurrency buyers have higher levels of debt than the national average.
Finally, we wanted to compare the average debts of Gen Z and Millennial crypto buyers — who make up most of all crypto buyers — to the debt totals of an average American household.
According to the data, crypto buyers aged 40 and under have more debt than the average U.S. household. With student loans and personal loans, millennials — who account for roughly three-quarters of all crypto buyers — all have more debt than the national average.
Crypto buyers in Generation Z and Millennials often have less access to various types of credit, and the options they have are higher-interest loans and lines of credit. When you combine that with rising living costs for younger generations, it’s easy to see why their debt balances are significantly higher than those of older generations.
Despite more limited access to credit and higher levels of debt, Gen Z’ers and Millennials are still investing a significant amount of their money — and their dreams — in cryptocurrencies