Everyone is gearing up these days to invest in cryptocurrencies like the Bitcoin. With this sudden surge of interest for Bitcoins, a lot of teenagers are showing keenness to jump on the bandwagon because they are afraid of being left out. But, should teens invest in crypto assets is a million dollar question.
Cryptocurrencies have been there for a decade and more and they have a market value to the tune of almost $170 billion. They are like digital cash which are neither issued nor regulated by the government or any financial institution like banks. So, the Bitcoin Revolution is changing the way people conduct financial transactions. According to the teen Bitcoin millionaire Finman, millennials are rather curious to invest in crypto coins and they can do for as little as $1000. He himself had invested only this amount to get where he is today.
But most people are understandably skeptical of crypto assets due to the erratic price swings of these digital coins. Everyone knows of the dramatic price fluctuations of the Bitcoin. Since they are unregulated their reputation is not credible enough for investment purposes. But Finman strongly advises teens to invest their money instead of storing it in a savings account. At the same time, he warns millennials to invest only what they can afford to lose, and nothing more.
When Finman was questioned about the sudden plunge in Bitcoin value since early 2018, he appeared unaffected. He states that his belief in cryptocurrencies remains unaffected and this plunge had been anticipated. He feels that it is a huge mistake for investors to have a short-term approach. Such investors will be tempted to sell off their coins simply because of such a setback. Buy young people have many inherent advantages where understanding cryptocurrencies is concerned.
Experienced investors not only understand the advantages but also the inherent risks of making investments in crypto coins. According to a counsel of the SEC, youngsters may not be able to understand this. This is because teens have not experienced this phenomenon as have experienced Bitcoin investors. And it is rather difficult to dissuade teens from investing in Bitcoins when you have to compete against the get-rich-quick scheme that is being so aggressively promoted by advocates of the Bitcoin.
As long as the money teens are investing is not related to their parents’ retirement funds or their own college education funds it is alright. But when teenagers get used to earning money quickly without putting in much effort, it may send out a wrong message to them. They may not understand the value of earning it or saving it. Some youngsters are even turning to cryptocurrencies to pay off their college debts, but in the process are getting caught up in more debts when their crypto trades go south.
To sum up, teens can invest in Bitcoins if that money is not going to eat into their college funds. They must understand that they cannot keep all their eggs in one basket just like experienced investors. They have to diversify their portfolios and start with small investments. Most importantly, they cannot hope to become a millionaire overnight; they have to be prepared to research thoroughly to make the right trades at the right times.