Gen Z Turns to ETFs as Binance bStocks Gain Market Share

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Gen Z traders on Binance are allocating a growing share of their equity activity to exchange-traded funds (ETFs), with the products accounting for 25% of the cohort’s trading volume in early August, according to Binance Research.

ETFs accounted for 21.9% of Gen Z net equity inflows in July, up from 18.5% in June, while the share going to individual stocks fell to 74.2% from 77%.

The analysis examined activity across direct equities, tokenized stocks and traditional finance perpetuals, comparing Gen Z accounts with Millennials, Gen X and Baby Boomers on measures including trading frequency, net flows and leverage use.

The younger cohort traded less frequently than other working-age generations across all three products. Gen Z averaged 13 monthly trades in TradFi perpetuals, compared with 17 for Millennials and 16.5 for Gen X.

Among Gen Z direct-equity accounts, 22% had never placed a sell order, compared with 19% of Gen X accounts and 9% of Baby Boomer accounts. Millennials had the highest share of buy-only accounts at 30%. Among those Gen Z buy-only accounts, top assets by cumulative purchases included Broadcom, Tesla and the Schwab US Dividend Equity ETF, according to Binance.

Net buyers by generation and product. Source: Binance

Gen Z also showed relatively little appetite for leveraged and inverse ETFs; 88.2% of Gen Z TradFi perpetual accounts recorded no activity in those products, compared with 84.5% of Millennials and 85.9% of Gen X.

Binance cautioned that its direct-equities product only reached meaningful scale in June, leaving a relatively short data window for establishing longer-term trends.

Related: Binance to restrict transactions involving HTX, 10 other crypto platforms

Binance bStocks briefly overtakes xStocks

Binance’s bStocks briefly overtook Kraken’s xStocks as the second-largest tokenized stock issuer this week, less than two months after launching. As of Tuesday, bStocks held $610.6 million in tokenized stock value, compared with $601.2 million for xStocks, according to Token Terminal data.

The positions had reversed by Friday, with Token Terminal showing xStocks at $610.7 million and bStocks at $579.6 million, representing 22.3% and 21.2% of the roughly $2.7 billion market, respectively. Ondo Finance remained the largest issuer at $971.8 million.

The broader tokenized stock market has continued to expand, with RWA.xyz tracking $2.43 billion in distributed value as of Friday, up about 5% over the past 30 days.