A significant increase in housing costs makes home ownership unattainable for many Gen Z individuals, leading to financial nihilism, said CoinFund’s David Pakman.
What to know:
- Gen Z’s embrace of high-risk investments is a rational response to limited traditional wealth-building opportunities, such as affordable housing, CoinFund’s Pakman said.
- The significant increase in housing costs compared with previous generations makes home ownership unattainable for many Gen Z individuals, leading to financial nihilism.
- With limited traditional options, Gen Z is turning to perpetual contracts, memecoins and other high-risk investments to build wealth.
The surge in speculation driving prediction markets and leveraged bets on various sectors isn’t reckless, it’s rational, according to CoinFund managing partner David Pakman.
In a presentation during Consensus Hong Kong, Pakman reframed the behavior as “economic nihilism,” a calculated response by Gen Z to structural barriers in wealth building.
His case started with housing. For Gen X and Boomers, he said, the average home cost about 4.5 times their annual salary. For Gen Z, it’s closer to 7.5 times.
That shift, Pakman argued, effectively shuts younger people out of the housing market, long considered the cornerstone of middle-class wealth. Only 13% of 25-year-olds own their homes, over half of Gen Z investors now own crypto, he said.
With few traditional options, Pakman said younger generations are turning to high-risk bets, including memecoins, perpetual futures, zero-days-to-expiration options and prediction markets, not out of ignorance but as a strategy.
“It’s becoming actually rational to think that if the typical ways that long-term wealth creation is closed off to you, a small chance at a large return beats near certainty of slow decline,” he said.
He pointed to crypto perpetual contracts. These products, futures contracts that don’t expire, saw $100 trillion in notional volume last year, according to data he shared.
Prediction markets also exploded, from $100 million to $44 billion in just three years. While some pundits use them for political forecasting, Pakman said 80% of the activity is sports betting. Dune data paints a similar picture, with $1.8 billion out of $2 billion in daily prediction-market volumes centered on sports at the beginning of the month.
Pakman urged builders to meet it with better tools.
“It’s up to us in crypto to build products that allow the expression of risk in more transparent ways, that are more fair, have lower fees, and can be more transparent to both disclose risk and payout abilities,” he said.
Japan’s SBI to issue 10 billion yen onchain bond with XRP rewards for retail investors
The SBI START Bonds offer a fixed interest rate, blockchain settlement, and XRP rewards for eligible investors registered on the firm’s exchange.
What to know:
- SBI Holdings is launching a 10 billion yen blockchain-based bond for individual investors.
- The SBI START Bonds offer a fixed interest rate, blockchain settlement, and XRP rewards for eligible investors registered on the firm’s exchange.
- SBI Holdings has long supported XRP, and the company owns 9% of Ripple Labs, according to its Chairman and CEO Yoshitaka Kitao.
