Gen Z is not waiting around for traditional wealth-building paths to work in their favor. With 54% of Gen Z survey respondents having started investing by age 21 — earlier than any previous generation, according to Arta Finance — this cohort is aggressively moving into alternative investments like cryptocurrency, collectibles, real estate crowdfunding, and private market funds. Alternative investments and crypto now comprise 31% of younger investors’ portfolios, compared to just 6% for older investors, according to a Bank of America Survey of Wealthy Americans. That gap is not a rounding error. It represents a generational shift in how wealth is built, stored, and thought about.
Consider the Pokemon card market as a microcosm of this trend. A first-edition holographic Charizard that sold for a few hundred dollars a decade ago now commands six figures at auction. Young collectors who grew up with these cards are not just driven by nostalgia — they see tangible assets with verifiable scarcity as a legitimate portfolio diversifier. A Bank of America study found that 94% of Gen Z and millennial investors expressed interest in collectibles, including trading cards, art, vintage cars, and luxury watches, as a diversification tool rather than relying on the traditional 60/40 stock-and-bond portfolio. This article breaks down why Gen Z is turning away from conventional investing, what alternative assets they favor, the role social media plays, and the risks that come with this new approach.
Table of Contents
- Why Are Gen Z Investors Choosing Alternatives Over Traditional Portfolios?
- Crypto Dominance in Gen Z Portfolios and Its Real Risks
- How Social Media and #RichTok Are Shaping Investment Decisions
- Collectibles, Private Markets, and Real Estate Crowdfunding — Comparing the Options
- The Risk Tolerance Paradox and When Alternatives Backfire
- Values-Driven Investing and What Gen Z Actually Cares About
- Where Alternative Investments Among Gen Z Go From Here
- Conclusion
- Frequently Asked Questions
Why Are Gen Z Investors Choosing Alternatives Over Traditional Portfolios?
The short answer is access and trust — or more precisely, a lack of trust in the old guard. The World Economic Forum attributed Gen Z’s divergent investment behavior to a fundamental distrust of traditional financial institutions, which drives younger investors toward decentralized and alternative options. When you have watched your parents lose retirement savings in the 2008 crash, lived through a pandemic-era economic shutdown, and now face a housing market where starter homes require six-figure down payments, the pitch of “just buy index funds and wait forty years” rings hollow. The numbers back this up. Gen Z is tripling yearly transfers to investment accounts as rising housing costs push homeownership further out of reach, redirecting that capital into stocks and alternative assets, according to PYMNTS. Goldman Sachs’ October 2025 “Opening the Door to Alternatives” survey found that millennials and Gen Z demonstrate greater familiarity and higher allocations to alternatives, and they actually view public equities as riskier than older generations do.
That last point is worth sitting with. For a generation raised on financial volatility, the stock market is not the safe haven their grandparents treated it as. A graded Pokemon card sitting in a vault, by comparison, does not crash 30% on a Tuesday because the Fed chair sneezed during a press conference. However, this distrust can cut both ways. Skepticism toward banks and brokerages is reasonable, but it can also leave younger investors vulnerable to unregulated platforms, rug pulls, and speculative manias where there is no FDIC safety net at all. Choosing alternatives because you distrust institutions does not automatically mean the alternative is safer.
Crypto Dominance in Gen Z Portfolios and Its Real Risks
Cryptocurrency sits at the center of the alternative investment boom among young investors. Forty-two percent of Americans aged 18 to 27 already own cryptocurrency, and 65% say they plan to invest more, according to Benzinga. For 71% of Gen Z investors, crypto makes up more than one-third of their entire portfolio. These are not small allocations on the margins — crypto is the core holding for many young people. Gen Z is not naive about the risk either. Eighty-four percent of Gen Z investors acknowledge crypto as risky, yet nearly 65% still plan to invest in it. This apparent contradiction makes more sense when you consider what CoinDesk has labeled Gen Z “financial nihilism” — a mindset fueling a $100 trillion crypto derivatives boom as of February 2026.
Young investors are turning to perpetual contracts and memecoins because traditional wealth-building paths like homeownership feel permanently out of reach. If the conventional route is already a gamble, the logic goes, why not gamble on something with asymmetric upside? Gen Z and millennials are also more likely to hold crypto-related stocks at 23%, compared to 16% for Gen X and just 8% for boomers, per a 2025 Motley Fool survey. The limitation here is significant. A portfolio where crypto exceeds one-third of total holdings is extremely concentrated. Even seasoned crypto advocates typically recommend keeping speculative assets to 5-10% of a portfolio. If you are 22 and your net worth is $8,000, a 50% crypto drawdown is painful but survivable. If you are 28 with $80,000 in savings and the same allocation, that drawdown becomes a genuine financial setback. The earlier you start investing, the more time you have to recover — but concentration risk does not care about your age.
How Social Media and #RichTok Are Shaping Investment Decisions
social media is not just where Gen Z gets entertained. It is where they learn to invest. Fifty-five percent of Gen Z investors say social media is the top reason they got into investing in the first place, according to an Oliver Wyman Forum survey of 300,000 investors conducted over five years. The #RichTok trend on platforms like TikTok is actively pushing Gen Z toward both the stock market and alternative assets, as reported by Fortune in January 2026. The specific platform breakdown matters. Sixty percent of Gen Z investors use YouTube as a primary investment information source, while 34% rely on TikTok for market trend insights, per the Motley Fool.
YouTube’s longer-form content tends to allow for more nuanced discussion — a 20-minute video breaking down how to evaluate a Pokemon card’s PSA grade and long-term value trajectory can actually be educational. TikTok’s 60-second format, on the other hand, tends to favor hot takes and urgency. “This card is about to 10x” performs better algorithmically than “here is a careful analysis of why this card might appreciate 15% over three years.” This creates a real problem for collectibles investors specifically. A viral TikTok showing someone pulling a rare card can spike demand and prices overnight, only for the market to correct once the hype cycle moves on. Pokemon card investors who bought into the 2020-2021 boom at peak prices learned this lesson the hard way when values corrected significantly through 2022 and 2023. Social media can introduce you to an asset class, but it makes a terrible financial advisor.
Collectibles, Private Markets, and Real Estate Crowdfunding — Comparing the Options
Gen Z’s alternative investment interests extend well beyond crypto and trading cards. On the Arta platform, 51% of Gen Z investors hold at least one private market investment — including private equity, venture capital, real estate funds, and infrastructure — compared to 47% of millennials. Real estate crowdfunding platforms showed the highest 2025 growth score of +10.2 among Gen Z compared to all other investment channels, according to VanEck. The tradeoffs between these alternatives are real. Collectibles like Pokemon cards, sports memorabilia, and art offer tangible ownership and cultural connection, but they are illiquid — you cannot sell a $5,000 card at 2 AM when you need cash, and finding the right buyer at the right price takes time.
Private market funds offer exposure to potentially higher-returning asset classes but typically lock up your capital for years and have higher minimums. Real estate crowdfunding splits the difference, offering relatively small entry points and exposure to real assets, but you are still dependent on the platform’s management and cannot easily exit your position. Gen Z’s top investment preferences by asset type tell an interesting story about where this generation actually parks its money: cash and savings lead at 39%, followed by high-yield bonds at 36%, growth sector stocks at 27%, and crypto assets at 21%, per IPX1031. The gap between the hype and reality matters. While headlines focus on crypto and collectibles, a significant portion of Gen Z still prioritizes liquidity and safety. The most financially successful young investors tend to blend alternatives into a broader portfolio rather than going all-in on any single asset class.
The Risk Tolerance Paradox and When Alternatives Backfire
Despite their reputation as risk-seekers, Gen Z investors are more deliberate than they get credit for. The top factor Gen Z considers when evaluating investments is risk level at 45%, followed by potential returns at 37% and fees and expenses at 37%, according to the Motley Fool. They are not blindly throwing money at memecoins — at least not all of them. But awareness of risk and proper management of risk are different skills. A 22-year-old who knows crypto is volatile but still puts 40% of their savings into it has identified the risk without actually mitigating it.
The “financial nihilism” phenomenon described by CoinDesk is particularly concerning because it reframes reckless concentration as rational behavior. When young investors convince themselves that traditional paths are broken, they can use that belief to justify levels of risk that would make any financial planner wince. The collectibles market carries its own version of this trap. Pokemon cards, for instance, have genuine scarcity dynamics and a passionate collector base, but they are also subject to condition sensitivity, grading subjectivity, and trend cycles. A PSA 10 card is worth multiples of a PSA 9, and the difference between those grades can be invisible to the untrained eye. Investors who treat cards purely as financial instruments without understanding the hobby often overpay, misstore their assets, or panic-sell during normal market corrections.
Values-Driven Investing and What Gen Z Actually Cares About
Gen Z is not just choosing different asset classes — they are choosing different sectors entirely. According to Rolling Out, Gen Z disproportionately invests in technology disruption, climate solutions, alternative health including telehealth and mental health apps, and wellness technology, while underweighting traditional sectors like pharmaceuticals. This values-driven approach extends to collectibles too.
Many young Pokemon card collectors prioritize Japanese-language cards and vintage sets partly because they view supporting the original creators and the broader hobby community as important, not just because of potential price appreciation. This alignment of values and investing can be powerful, but it introduces its own bias. Investing in what you care about feels good, but passion can cloud judgment. The same enthusiasm that makes someone a great Pokemon card collector can make them a poor Pokemon card investor if they cannot separate emotional attachment from financial analysis.
Where Alternative Investments Among Gen Z Go From Here
The structural forces driving Gen Z toward alternatives are not temporary. Housing affordability is not improving. Distrust in institutions is deepening, not reversing. Social media’s influence on financial decisions is accelerating. And the infrastructure for alternative investing — fractional ownership platforms, tokenized assets, online card marketplaces with authentication — is getting better every year.
Goldman Sachs and other major firms are already adapting their product lines and marketing toward younger investors’ preferences for alternatives. For the Pokemon card market specifically, this generational shift could provide a sustained demand floor. As Gen Z investors mature and their incomes grow, the capital available for collectibles grows with them. The collectors who are carefully building graded collections today may find themselves holding assets that benefit from both nostalgia-driven demand and the broader normalization of collectibles as a legitimate portfolio component. But that future is not guaranteed, and treating any alternative asset as a sure thing is the fastest way to learn an expensive lesson.
Conclusion
Gen Z’s embrace of alternative investments is not a fad or a phase — it is a rational response to an economic environment that has made traditional wealth-building strategies feel inadequate. With 31% of younger investors’ portfolios allocated to alternatives and crypto, 54% starting to invest before age 22, and 94% expressing interest in collectibles as diversification tools, the data points in one direction. This generation is building portfolios that look fundamentally different from their parents’, incorporating everything from cryptocurrency and private equity to Pokemon cards and real estate crowdfunding. The key for Gen Z investors is balancing conviction with discipline.
Alternative assets can offer genuine diversification, cultural connection, and potentially outsized returns, but they also carry liquidity risk, concentration risk, and the ever-present danger of letting social media hype drive financial decisions. Whether you are buying your first Bitcoin or your first graded Charizard, the fundamentals still apply: understand what you own, know why you own it, diversify across asset types, and never invest more than you can afford to lose. The rise of alternatives is reshaping investing for a generation. How well it works out depends on whether enthusiasm is paired with education.
Frequently Asked Questions
Are Pokemon cards considered a legitimate alternative investment?
Yes. Pokemon cards fall under the broader category of collectibles, which Bank of America research shows 94% of Gen Z and millennial investors are interested in as diversification tools. Graded, authenticated cards from established sets have demonstrated long-term appreciation, though the market is volatile and illiquid compared to stocks or bonds.
How much of my portfolio should be in alternative investments?
There is no universal answer, but financial professionals generally caution against the concentration levels many Gen Z investors carry. When 71% of young crypto investors have more than a third of their portfolio in a single asset class, that is high concentration risk. Most advisors suggest keeping speculative and alternative holdings to 10-20% of a total portfolio, depending on your age, income stability, and risk tolerance.
Why do Gen Z investors distrust traditional financial institutions?
The World Economic Forum points to a fundamental trust issue rooted in Gen Z’s lived experience — financial crises, pandemic-era disruptions, and a housing market that feels rigged against younger buyers. This distrust drives them toward decentralized options like crypto and tangible assets like collectibles where they feel more control over their investments.
Is social media a reliable source for investment advice?
Social media is effective for discovery — 55% of Gen Z investors credit it as the top reason they started investing. But discovery and advice are different things. YouTube’s longer-form content tends to be more educational, while TikTok’s short format often prioritizes hype over analysis. Always verify social media investment tips against multiple independent sources before committing money.
What alternative investments are growing fastest among Gen Z?
Real estate crowdfunding platforms showed the highest growth score among Gen Z in 2025 at +10.2, according to VanEck. Cryptocurrency remains the most widely held alternative, with 42% of 18-to-27-year-olds owning crypto. Private market investments including venture capital and private equity are also gaining traction, held by 51% of Gen Z investors on platforms like Arta.
