The Economy Is Shifting to Digital Natives: Markets Are Following

Key Takeaways:

• Gen Z was born into digital finance. 93% use P2P payment apps and cash preference has collapsed to just 7%.
• Three pillars define how this generation lives. GENZ covers digital finance, gig platforms, and online sports betting equally.
• Sports betting shows the scale of this shift. U.S. online betting revenue exploded 55x in just seven years.

Meet the Consumer Who's Never Written a Check: The Case for the Digital Native Economy

There are 145 million of them in the United States. They are the largest spending cohort in the country's history. And they have never walked into a bank branch to open an account.

Gen Z and younger millennials, roughly anyone born between 1981 and 2012, didn't adopt the digital economy. They were born into it. Their first financial account was an app. Their first job was on a platform. Their first bet was placed on a phone. The economy they participate in looks almost nothing like the one their parents navigated.

Today, VanEck is relaunching the VanEck Digital Native Economy ETF (GENZ) formerly the VanEck Gaming ETF (BJK) to capture this structural shift. GENZ seeks to track the MarketVector Digital Native Economy Index (MVGENZTR), a benchmark organized around three segments of the economy that these consumers have reshaped from the ground up.

Why the Digital Native Economy Is Here to Stay

We have been watching this transition unfold for years, but the numbers now make it impossible to ignore:

• 93% of Gen Z and younger millennials use P2P payment apps. Cash preference has collapsed to just 7% (Source: Billtrust as of 2025).
• The gig economy is growing 3x faster than the traditional workforce, with Gen Z leading the charge (Source: Fortune as of 2025).
• 34% of this cohort bets online regularly. U.S. sports betting revenue has exploded from $248 million in 2017 to $13.7 billion in 2024 a 55x increase in seven years (Source: Transunion as of 2025).

These aren't behavioral quirks. They are the permanent financial habits of a generation that has never known anything different. The companies built to serve them, neobanks, gig platforms, digital betting operators are not disrupting incumbents. They are the incumbents for this cohort.

From BJK to GENZ: Aligning with a New Consumer Reality

We launched BJK in 2008 to capture the global gaming and leisure sector. It served investors well for nearly two decades. But the world has changed.

The most interesting growth in consumer behavior is no longer confined to gaming. It runs across three distinct pillars of digital-native life and the companies driving that growth increasingly don't fit inside a "gaming" label. We needed a broader, more accurate lens.

That lens is the digital native economy.

The Three Pillars of GENZ

The MarketVector Digital Native Economy Index organizes this economy around three segments:

1. Millennial Finance

Traditional banking never got the same foothold with this generation. They discovered finance through apps like Venmo, Cash App, Robinhood and Affirm. Neobanks and fintech platforms now handle billions in daily transactions with no physical presence. The index captures companies across:

• Digital payment networks and peer-to-peer transfer platforms.
• Buy-now-pay-later providers and digital lending.
• App-first brokerage and investing platforms.

2. Gig Economy & Online Forums

Work, for this generation, is not entirely 9-to-5. It's a gig, a freelance contract, a creator monetization deal. Platforms like Fiverr, Etsy, and Reddit don't just connect buyers and sellers, they are the economic infrastructure for tens of millions of people who earn, transact, and build community entirely online. The index captures:

• On-demand labor and freelance marketplace platforms.
• Creator economy and community commerce companies.
• Online forum and social commerce operators.

3. Digital Sports Betting & Video Game Developers

Sports betting has gone from niche to mainstream faster than almost any consumer category in history. Since the Supreme Court struck down federal betting restrictions in 2018, state after state has legalized online wagering. Online operators now generate tens of billions in annual revenue and are among the fastest-growing digital consumer platforms in the country. The index includes:

• Online sports betting operators and iGaming platforms.
• Fantasy sports and digital wagering companies.
• Technology providers enabling regulated online gambling.
• Video game developers.
• Sports data and analytics services.

How the Digital Native Economy Index Works

The MarketVector Digital Native Economy Index applies a rules-based methodology to identify and weight companies across all three segments. Eligible constituents must:

• Derive at least 50% of revenues from digital-native economy activities (25% for existing index components).
• Meet minimum market capitalization and liquidity thresholds.
• Be listed on a US exchange.

The index is rebalanced quarterly and reconstituted on a defined schedule, ensuring the portfolio stays current as companies and market dynamics evolve. Each of the three tiers carries an equal weight of approximately 33.3% at rebalance, with individual security weights capped at 8% to manage concentration risk.

GENZ Brings Consumer Layer to VanEck's Thematic ETF Suite

GENZ fits within a broader suite of VanEck thematic ETFs that collectively trace the infrastructure of modern economic life. SMH captures the semiconductor supply chain powering every digital device. ESPO covers competitive gaming and esports. DAPP provides exposure to digital asset companies. GENZ now adds the consumer layer, the people and platforms where all of that technology meets real economic behavior.

Together, they represent VanEck's conviction that the most durable investment themes are the ones tied to how people actually live, work, and spend not just how they did in the past.