Generation Z is transforming the global market through a phenomenon termed financial economic nihilism, which has catapulted crypto derivatives volume to a staggering 100 trillion dollars. According to David Pakman, managing partner at CoinFund, this behavior is not recklessness but a rational response to a broken system that makes home ownership and traditional stability unattainable.
During his presentation at Consensus Hong Kong, Pakman explained that rising costs have effectively shut young people out of the housing market entirely. Since the average home now costs 7.5 times the annual salary, many prefer to bet on massive returns through perpetual contracts instead of accepting a slow and certain decline within the conventional financial systems that dominate the current era.
A rational response to the collapse of the homeownership dream
It is evident that for previous generations, savings and property were pillars of wealth, yet today only 13% of 25-year-olds own a home. This scenario has fostered financial economic nihilism, pushing more than 50% of Gen Z to invest in high-risk digital assets to attempt accelerated capital generation given the lack of viable traditional alternatives for wealth building.
On the other hand, the notional volume of perpetual contracts reached astronomical figures last year, while prediction markets grew from 100 million to 44 billion dollars in just three years. Young people are now using memecoins and zero-day-to-expiration options as strategic tools, considering that a small chance of large financial returns is preferable to the total exclusion from traditional finance.
What tools should developers build for this new high-risk investor profile?
For Pakman, the industry’s challenge lies in creating products that allow this risk expression to be more transparent, fair, and with lower operational fees. The blockchain industry must evolve to offer platforms that not only capture speculation but provide greater clarity on risk disclosure and payout abilities of the derivatives protocols that currently dominate the global digital asset market.
Furthermore, prediction markets have proven to be fertile ground, where 80% of activity is centered on sports betting, reflecting a search for immediate utility. Therefore, cryptocurrency is establishing itself not just as a store of value, but as a financial expression vehicle for a generation that feels betrayed by the economic models that benefited their predecessors during the last few decades.
Finally, the boom in derivatives suggests that the appetite for risk will continue to rise as long as structural barriers persist in the physical world. The convergence between technology and financial economic nihilism is redefining the frontiers of capital, establishing a new paradigm where high-level speculation is perceived as the only path to achieving financial independence in the year 2026.
