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Thursday, December 9, 2021

Should You Consider Buying Crypto for Your Children?

I know nothing about investing and I know nothing about crypto but I know many are talking about crypto and investing in it, so I was happy to learn more from this reader who sent in this post about whether or not it is a good idea to invest in crypto for your children. 


When it comes to investing, we’re always taught that the sooner you start the more you have to gain (at least in a general sense) and with that, many parents tend to invest heavily for their children from birth, or their earlier years.

There’s a good chance that like many of us, your parents had some sort of college fund, life fund or even a trust set up in your name since your youngest years. And with years of hard work and commitment, that fund was raring and ready to go once you turned eighteen.

If you’re looking to follow suit with your own children, there is, of course, the traditional stocks and savings accounts to consider – however – the new kid on the block to watch is the cryptocurrencies, and you might want to teach your children how to buy Bitcoin. We will take a look at buying crypto for your children below.

Crypto is Volatile, but a Mover

If you’ve taken a look into the world of crypto over the past five years you’ll know that there is a lot of movement in the market. Not only have there been tales of investors becoming profoundly wealthy in the spans of just hours, but there have also been stories of people losing everything in an instant.

With that being said, it is important to keep in mind that crypto is somewhat of an investment that moves at a pace unseen in the investment world.

When we talk about growth, you should always be wary, though when it comes to buying cryptocurrency for your children the consideration switches from fast-paced growth and over to stability and sustained gains. Experts in the investment fields have made it clear that a vast majority of the tokens you see on dedicated bitcoin exchanges like Independent Reserve won’t exist in years to come – and that being said, delving into a token that has its roots in more than just the stock market is a way to go.

Bitcoin and Ethereum, for example, are woven in the fabric of society through payment platforms and even large-scale corporations accepting these coins as a form of payment. Other coins though, have little to no true ‘societal value’ beyond simply being a coin on the exchange.

Cryptocurrency May Become the New ‘Normal’

As the world transitions into a more digital-first realm, there is the chance that the maneuverable crypto assets will become the new normal and have a presence in our everyday life.

When compared to typical currencies, coins like Bitcoin are able to smoothly allow transactions on a global scale in an instant and in a far more secure way than with traditional currencies. And with that in mind, a lot of experts are quietly confident that in the coming decade we may soon be paying with crypto assets, rather than the almighty dollar.

For our children, investing in crypto early might be one of the biggest investments you could ever make for them, and if crypto assets do become the new standard, and you’re holding a highly valued number of tokens that skyrocket in price you could likely be holding on to the entire value of a college degree.

One point that is important to keep in mind is that due to crypto assets looking to reduce in numbers over the next few years, it might be worthwhile to diversify in tokens across the board. This, much like typical investing, will reduce your risk of losses and take all of your eggs out of one basket.

Managed Crypto Funds Should be Considered

One final point to keep in mind is that crypto assets change in value a lot in a short period of time, and with that, you may lose or gain a lot without realising. In circumstances such as these, it may be better off to invest in crypto ETFs or a managed fund.

These managed funds work well in terms of reducing losses and moving with the market. You’ll have a better chance of seeing growth given that a team of investment managers are going to be monitoring your assets and buying and selling in growth waves to keep your bottom line in the green.

Added to this, because you’re likely looking to invest in the long-term for your children, you may want to set and forget the management side of the tokens and leave this to the professionals. Less hands-on time may be the simple option for parents looking for zero-contact investment.

Conclusion

With all of those points in mind, it is a good idea to place a small to medium investment in a diverse range of crypto assets for your children. These funds have relatively good growth outlooks, and though they may be volatile in the short term, they are projected to see slow and steady growth into the future as the financial markets begin to adapt and become more used to these all-digital currencies.

Always be mindful of investing in more than one currency and don’t invest more than you can afford to lose.

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