On Binance, Gen Z increasingly prefers ETFs to individual stocks

Generation Z is changing the way they invest in the markets tracked by Binance. According to an analysis by Binance Research, ETFs are becoming more prominent in their stock trading. As of early August, these funds represented 25% of this cohort’s trading volume. Younger investors trade less and use leveraged products less than older generations. This development also concerns tokenized shares and perpetual contracts linked to traditional markets.

ETFs are gaining ground among Gen Z

In July, ETFs accounted for 21.9% of net flows into Gen Z stocks, up from 18.5% in June. At the same time, the share devoted to individual stocks fell to 74.2%, compared to 77% previously. Binance Research compared several product categories to measure these changes. L’study covers direct shares, tokenized shares and traditional financing perpetual contracts.

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

Binance observes limited use of leverage

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

L’analysis also notes a significant proportion of accounts devoted solely to purchases. 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 accounts dedicated to purchasing, at 30%. Among the most purchased assets are Broadcom, Tesla and the Schwab US Dividend Equity ETF.

bStocks accelerates into the tokenized stock market

At the same time, Binance bStocks briefly overtook Kraken’s xStocks among tokenized stock issuers. As of Tuesday, bStocks had a value of $610.6 million, compared to $601.2 million for xStocks, according to Token Terminal data. On Friday, the ranking was reversed, with 610.7 million for xStocks and 579.6 million for bStocks. Ondo Finance then retained first place, with $971.8 million.

The tokenized stock market also continued to grow. RWA.xyz posted a distributed value of $2.43 billion on Fridayor approximately 5% more over thirty days. Binance specifies, however, that its direct equity investment product only reached significant scale in June. The observation period therefore remains short to identify lasting trends regarding the investment habits of Generation Z.

In the short term, the available data mainly shows an increase in the role of ETFs and more measured activity among young investors. This trend is reflected across several products tracked in the analysis, including individual stocks, ETFs, tokenized stocks, and perpetual contracts linked to traditional markets.

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