MW Here's why young investors are buying so much gold and crypto right now

By Gordon Gottsegen

Investors are turning to these assets to diversify their portfolios and fight inflation

Gold and crypto are two very different assets: The former is seen as a safe haven that tends to increase in value as other investments fall, while the latter can be quite volatile but has seen dramatic growth.

These two investments may serve different purposes, but many individual investors are now turning to both.

Among retail investors, 58% have recently invested more into gold and crypto or plan to do so in the near future, according to a recent survey by brokerage eToro $(ETOR)$. The survey gathered responses from 10,000 self-directed investors across 12 countries, with 1,000 of the respondents based in the U.S. Respondents did not have to be eToro customers to participate.

The survey also found that 25% of those investors are decreasing their exposure to U.S. stocks. This comes at a time when geopolitical conflicts have shaken markets, and tariffs and trade wars have caused some investors to shy away from U.S. assets. The U.S. dollar is also weakening and trading near three-year lows, with the U.S. dollar index DXY falling about 9% year to date.

Meanwhile, both gold (GC00) and bitcoin (BTCUSD) have been clocking in at new all-time highs.

Read: Here's why stocks, bitcoin and gold are racing to record highs at the same time. It hasn't happened in over 10 years.

While it may be unusual to see investors turning to both of these assets at the same time, the two do have some things in common. Both can be used to diversify a portfolio beyond equities, and both can help combat inflation.

"Gold is a risk-off asset - a flight to safety - and bitcoin is very much a risk-on asset. But if you overlap the two, you could argue both are good for fighting inflation," Bret Kenwell, U.S. investment analyst at eToro, told MarketWatch. "If you were worried about inflation chewing away your assets, those are two you would consider."

According to the survey, 28% of U.S. investors said inflation was the biggest threat to their portfolio, making it the most commonly cited threat. Although inflation has cooled since its 2022 highs, new tariffs have the potential to push prices higher, which could have an inflationary effect.

Kenwell said that while bitcoin used to be referred to as "digital gold," that nickname has faded over the years. Gold and bitcoin trade very differently from each other but can be used in tandem when trying to protect against inflation, he noted, adding that gold may be able to protect a portfolio by holding value when other assets fall, while crypto can capitalize on growth.

Read more: Fed's inflation fight isn't over yet, says former No. 2 at central bank

The survey found that younger investors were more likely to already be invested in crypto, with 54% of Gen Z investors and 62% of millennial investors holding crypto assets in their portfolios. Interestingly, the same was true for gold.

"It wasn't surprising that younger investors were more into crypto than older investors. But it was surprising to me that they were [also into] gold," Kenwell said. "I definitely expected the boomers and Silent Generation to have more exposure to it and have more of an openness to adding it - but millennials and Gen Z were stronger in that regard."

Kenwell said this appetite for gold among younger investors was stronger than in past surveys. But he pointed out that gold has been climbing to new highs recently and that the price of gold has outpaced the S&P 500 SPX on an annual basis in three of the past five years. Recent outperformance may therefore be pushing younger investors to gold.

Looking at how gold has been performing lately, Kenwell said, investors may be thinking they can use it to beat the market too.

-Gordon Gottsegen

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 18, 2025 10:47 ET (14:47 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.