TikTok crypto hype puts Gen Z at risk
ASIC has warned younger Australians that cryptocurrency and the like could be setting them up for failure, setting unrealistic expectations on returns, price volatility and long-term investing.
A national survey conducted by YouGov found around one in four Gen Z Australians owns crypto; 66% say they take a speculative approach to at least some of their crypto investments.
Twenty-four percent of Gen Z crypto investors report trying to pick a winner by buying the latest new 'coins' and 15% say they invest just for a 'bit of a punt'. They also reported being contacted about crypto investing, with men being contacted more often than women.
"Short-term or speculative trading based on what's popular online carries real risks, particularly in volatile markets like crypto," says ASIC commissioner Alan Kirkland.
Social media, one of the main sources of information for the 18 to 28 age demographic, is also a major distributor for crypto marketing. Almost three-quarters of Gen Z have seen crypto ads on social media.
Sixty-three percent of Gen Z respondents say they use social media for financial information and guidance, while 30% use YouTube and 18% use AI platforms.
More than half of Gen Z say they somewhat or completely trust financial information on social media and from 'finfluencers', while 64% trusted AI platforms.
The regulator urged Gen Z Australians to complement the information they seek from influencers and content with reputable and evidence-based sources.
ASIC warned relying on a narrow range of sources, particularly unverified or promotional content, can increase financial risk, especially in an environment where markets and online trends move quickly and information is rarely tailored to individual circumstances.
At the same time, ASIC has refreshed the Moneysmart website, its consumer education platform, to make it more engaging and relevant for Australians of all generations.
"This refresh helps ensure Moneysmart provides a trusted alternative - free, independent and designed to help young Australians make decisions that work for them, not someone selling a product," says ASIC.
It comes as the Ecstra Foundation notes a decline in financial literacy has meant young people enter adulthood without the skills they need to manage money, avoid scams and navigate an increasingly complex financial system.
Its program, Talk Money, recently introduced a workshop called Becoming Scam Savvy, designed to help high school students recognise scams and stay safe online.
Ecstra Foundation chief executive Caroline Stewart says: "Financial education goes far beyond understanding money. It's about building the confidence, habits and practical life skills young people need to make good financial decisions throughout their lives."
This article first appeared on Financial Standard
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