Gen Z traders on Binance are directing a growing share of their equity activity into exchange-traded funds (ETFs), according to new findings from Binance Research. ETFs accounted for 25% of the cohort's trading volume in early August.

ETFs represented 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 drift toward funds echoes a longer-running shift in US markets, where low-cost ETFs have steadily taken a larger share of equity flows. Because Binance's equity offerings are new, the findings also offer an early look at how the youngest adult generation trades stocks when they sit alongside crypto on a single platform.

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

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

Buy-only behavior was also widespread among younger users. 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, the top assets by cumulative purchases were Broadcom, Tesla and the Schwab US Dividend Equity ETF, according to 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. US regulators, including the SEC and FINRA, have repeatedly issued investor alerts about the complexity and daily-reset mechanics of such funds.

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

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 back-and-forth comes amid a crowded year for tokenized equities. Kraken introduced xStocks in June with issuance partner Backed Finance, Robinhood began offering stock tokens to customers in the European Union the same month, and Coinbase has said it will seek US regulatory approval to offer tokenized securities. Whether bStocks can hold the number-two spot as more rivals scale, and whether Gen Z's ETF tilt persists as Binance's data window lengthens, remain open questions.

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.