Generation Z and millennials are investing in cryptocurrencies and gambling to compensate for financial setbacks.

Northwestern Mutual released a study on the financial behavior of young Americans. Generation Z and millennials lead investments in high-risk speculative assets in the United States. The research was published in 2026.

The "Planning and Progress 2026" survey shows that these demographic groups are seeking cryptocurrencies, prediction markets, and sports betting as alternatives to strengthen their personal finances. According to information from Casino.org, the study reveals a worrying pattern of financial behavior among young Americans, who are increasingly resorting to high-risk investments in an attempt to compensate for perceived economic deficits.

Young people are leading venture capital investments.

Among Americans, 24% invest in cryptocurrencies. Another 17% participate in prediction markets or sports betting.

In Generation Z, the percentages rise to 32% in both categories. Among millennials, 35% invest in cryptocurrencies. In this group, 24% bet on prediction markets or sports.

Northwestern Mutual has identified that younger Americans are turning to speculative market segments. The asset manager states that these young adults are taking significant risks by pursuing these alternatives.

Feelings of financial hardship motivate decisions.

Research indicates that 73% of Americans feel financially behind. This group believes that speculative investments will help them achieve their financial goals more effectively than traditional methods.

The percentage increases to 80% in Generation Z. Among millennials, it reaches 75%.

"Across generations, one of the main factors driving people to take on greater risks with these investments is the feeling of being financially disadvantaged," adds Northwestern Mutual.

High inflation, stagnant wages, and heavy student debt paint the picture. These factors lead many young Americans to feel that they are not where they need or want to be financially.

The asset manager warns that Americans adopting riskier assets because they feel financially disadvantaged are committing a form of gambler's fallacy. They take on more risk to compensate for past events or mistakes.

Platforms face accusations

The study was released at a time when next-generation brokers, prediction markets, and sports betting operators are facing accusations. The companies are being questioned for targeting a young and potentially vulnerable audience.

The data confirms that only a small percentage of sports bettors make a profit in the long run. The majority of individual investors in prediction markets lose money.

Some new Kalshi users lose money more quickly on this platform than when betting on sports through traditional bookmakers. The platforms may exacerbate the financial problems of young investors.

Caution advised.

“Generation Z and Millennials represent the largest segment of Americans who are investing – or considering investing – in high-risk speculative assets this year. These young adults are showing the greatest interest in cryptocurrencies, sports betting, and event-based contracts offered through prediction markets,” according to the asset manager.

John Roberts, Chief Operating Officer of Northwestern Mutual, stated in a press release: “When people feel behind, they often look for shortcuts. These high-risk assets can be fun, but that’s why we recommend spending only fun money on them. Don’t allocate more than you can afford to lose completely, and focus your planning on proven effective strategies to help people build and protect wealth for the long term.”