April 24, 2026Updated May 1, 2026, 12:35 p.m. ET
Younger Americans are flocking to high-risk “alternative” investments in 2026, driven by the conviction that crypto, meme stocks and prediction markets offer better odds for meeting their financial goals.
Gen Zers and millennials are gripped by a pervasive sense of financial nihilism that pushes them into risky investments, according to Northwestern Mutual’s Planning & Progress Study 2026.
Three-quarters of millennials and 80% of Gen Zers who choose risky investments feel “financially behind,” the study says. They believe speculative investments “will help reach financial goals more effectively than traditional methods,” such as conventional stocks and bonds.
But some high-risk investments are more akin to gambling, investing experts say, and the losses can go beyond money.
In one high-profile case, a U.S. Army Special Forces soldier who participated in the raid to capture former Venezuelan President Nicolás Maduro faces charges in connection with placing bets on the top-secret operation on the prediction market platform Polymarket.
Crypto is arguably the most popular “alternative” investment. Among all U.S. adults, 24% are invested in crypto or considering it, according to the study. That figure rises to 32% for Gen Z and 35% for millennials.
But crypto is just one of the riskier investments drawing increased attention.
Gen Z and millennials favor these ‘alternative’ investments
Smaller but significant shares of young adults are drawn to three other categories of high-risk investments: sports betting and prediction markets, options trading and so-called meme stocks. Here’s the breakdown:
- 32% of Gen Z and 24% of millennials are invested in or considering sports betting or prediction markets.
- 18% of millennials and 17% of Gen Z are invested in or considering options trades.
- 14% of Gen Z and 13% of millennials are invested in meme stocks or are considering it.
All of those categories are dominated by younger investors, Northwestern Mutual reports. By contrast, fewer than 10% of baby boomers are dabbling in any of the four high-risk investments. The study draws on a survey of 4,375 Americans in January.
The problem with some “alternative” investments, experts say, is that they aren’t really investments.
“I define investing as something with an expected positive return,” said David Gardner, cofounder of The Motley Fool. “The expected return for any sports bettor is negative. And there’s no way around that.”
Investors in crypto, meme stocks and prediction markets tend to be male, according to research and anecdotal evidence. They might get lured in by YouTube or TikTok videos from other young men bragging about their winnings, often with an appeal to masculine virtues of bravery and derring-do.
“There’s a lot of presence on social media of people showing a successful lifestyle, and that gives a fear of missing out,” said Tim Procita, a wealth management adviser at Northwestern Mutual.
“I hear the term ‘cheat code’ a lot when people call in to talk to me,” Procita said. “I think a lot of people think of these alternative assets as a cheat code.”
Alternative investments are on the rise
The personal finance industry has been abuzz with talk of alternative assets and diversification, inspired in part by a spreading belief that stocks and bonds alone might not suffice to deliver big returns for a retail investor in the 2020s.
The Trump administration has pushed for American retirement savers to gain access to alternative investments, including private equity and crypto. That push is feeding debate on whether those potentially risky assets belong in retirement accounts.
On April 25, President Donald Trump is expected to deliver the keynote speech at a crypto conference at his Mar-a-Lago Club.
Younger investors seem particularly receptive to investment alternatives, a finding echoed in previous studies.
A study of wealthy Americans, published in 2024, found younger and older investors are sharply divided on which investments they considered the strongest opportunities for growth. Older Americans, ages 44 and above, mostly favor stocks, the study found. Younger investors prefer alternatives, including crypto, real estate and private equity.
The Northwestern Mutual study covers investment sectors that might not ring familiar to many older investors.
Here’s a rundown:
Crypto
By now, most Americans are at least passingly familiar with cryptocurrencies. They are digital currencies. Unlike cash in your wallet, they aren’t generally backed by a government or bank, nor by any “real” asset. Bitcoin, the best-known cryptocurrency, made its debut in 2009.
Crypto investors used to buy and sell on crypto exchanges, a potential deal-breaker for those unfamiliar with bitcoin. In 2024, federal regulators cleared the way for ordinary investors to buy and sell bitcoin ETFs, opening it up to the broader investing public.
Bitcoin’s value plunged in late 2025 and early 2026, but the currency has posted spectacular gains over its brief existence.
“Even with crypto prices basically cut in half from their highs, it is still a meaningful asset that will be a part of our financial infrastructure for the foreseeable future,” said Caleb Silver, editor in chief of Investopedia, the financial journalism site.
Sports betting and prediction markets
Americans have bet nearly $450 billion on sports in the years since a 2018 Supreme Court decision that effectively legalized sports betting, Investopedia reports.
Prediction markets enable investors to wager on the outcome of almost anything. “To be able to predict: Will the Fed raise interest rates or not this month?” Procita said. “Or, will oil prices be above $100 a barrel or below $100 a barrel at the end of the month? … Who’s going to win ‘Survivor’? You can put money on that.”
Investors can tap prediction markets on sites such as Coinbase, Robinhood, Polymarket and Kalshi.
The sports betting and prediction markets blur the line between investing and gambling.
“You’re betting on an outcome, with the hopes of turning a quick profit,” Silver said. “And that is very different from investing for the long term, where you’re not betting.”
Meme stocks
Remember when the GameStop stock soared during the COVID-19 pandemic amid a flurry of social media posts?
A meme stock “is typically a company whose share price gets bid up irrationally by retail investors who are trying to popularize it and broaden its attraction to more retail traders to make a quick profit,” Silver said.
Meme stocks take off “not based on their financial performance, but just based on hype,” Silver said. Some meme stocks have risen 1,000% or more.
“And all of them have come crashing to earth,” he said.
Options
An option gives the buyer the right to buy or sell an asset, such as a stock, at a set price by a set date.
Options can hedge against a sinking stock market, Investopedia reports. Savvy investors can use options to buy stocks at a discount, or to protect their holdings from a price drop.
“Options trading is betting on price and learning how to understand risk and reward,” Silver said. “But if you do it without learning how the options market works, you are going to lose money 100% of the time.”
Contributing: Michael Loria
