Cryptocurrency For Teens
Teens are leading the way when it comes to cryptocurrency investment, and it is not surprising. Since cryptocurrency is a relatively modern concept, therefore market gets more young investors than middle-aged or rich people, thus making cryptocurrency for teens a reality.
Age is just a number for cryptocurrency because you can trade them with complete anonymity. So you can easily buy cryptocurrency under 18 and make money through crypto.
Furthermore, today’s teens prefer digital transactions to hold physical cash. Therefore, cryptocurrencies offer them the freedom to transact their way with ease. However, opening a crypto account for minors is highly risky since the market is highly volatile.
One thing is clear: the crypto market operates per modern teens’ wishes. So, if you are a teen looking to learn the art of crypto trade, stick around till the end as we discuss related points in this article.
Understanding Crypto Investment
Cryptocurrency investment is similar to investing in any other security, bond or stock. The most famous way of investment is to buy a coin with the hope of its pricing in the future.
However, there are other ways to invest in crypto; a few are listed below.
- Teens can stake their coins on the blockchain and earn interest. Recently staking has surfaced as a significant form of making money from cryptocurrency.
- You can earn cryptos by offering services, selling products, and getting payback in tokens.
- Miners also earn cryptocurrency by offering their services.
Cryptocurrency trade is mainly made through a centralized crypto exchange. You can buy crypto tokens with fiat money or business with other cryptocurrencies. Furthermore, to buy coins, you need a digital wallet.
In short, teens can invest in cryptocurrencies in numerous ways. They can even generate passive income streams through crypto investment.
Can Teens Invest In Cryptocurrency?
Since there is no legal minimum age to own cryptocurrency, teens can start investing in them at any age. However, governments have begun monitoring the crypto market over the past few years; thus, many brokers do not open minor accounts.
As cryptocurrency is the future of finance, thus teens can become a billionaire through cryptocurrency trade. While it is challenging to trade crypto as a teen, it is not illegal. There are other ways to hold cryptos, as its peer-to-peer nature allows teens to buy and sell.
In addition, teens can legally hold coins through their parents to take advantage of the loopholes in the crypto market as the government allows opening a teen account with an adult managing it. Custodial accounts are the best way for teens to taste cryptocurrency.
Risks Investing In Cryptos For Teens
The crypto market is full of risks, so if you consider crypto your first investment avenue, keep an eye on related risks. The key ones are listed below.
Crypto prices are highly volatile and can go up or down in a few hours. The price swings are dramatic and can lead to hefty losses.
So, if you are ready to tolerate see-saw prices, then on-board the crypto plane.
Another risk to cater to is speculation, and fluctuations are somewhat arbitrary. Therefore, you cannot base your decision on technical analysis.
Such lack of data leaves teens with nothing but to guess their moves. Thus, it leaves a massive gap between the plan and achieving it.
Cryptocurrencies are not regulated, unlike other financial assets. Just as there is a lack of clear regulations, thus chances of fraud and scam increases.
In addition, crypto exchanges and brokers aren’t too unregulated. Thus, investing in an asset class such as cryptocurrency is rocky for new investors, especially for teens.
Lack of Insurance
Cryptocurrency investments lack insurance coverage; thus, investment loss is not recoverable and will be gone forever.
Custodial Accounts For Teens
Teen investors in the U.S. can only invest in cryptocurrency through a custodial account. In short, cryptocurrency for teens is subject to a custodial account. Parents or guardians manage funds on behalf of their kids in their teenage. However, the ownership is transferred once teens reach 18 or 21, depending on the state.
A parent has to open a custodial account by providing the below information for both the teen and his.
- Social security number
- Date of birth
- Passport, driver’s license or state ID
Once your account is open, you can start funding it. However, the manager will have control over this account unless you reach the age of majority.
Frequently Asked Questions
What crypto can I buy under 18?
You can buy all types of cryptos even if you are under 18. However, you may require to open an account with your parents in charge of your funds till you reach adulthood.
Which companies opening a custodial account?
The following platforms allow you to open a custodial account.
Can teens invest in crypto-exchange-traded funds (ETFs)?
Yes! Teens can invest in ETFs. However, they have to open a custodial account to trade ETF.
Should teens invest in cryptocurrency?
The crypto market is highly volatile. Therefore investing in cryptocurrency is full of risks. Teens must seek professional advice and do technical analysis before investing in cryptos.
Can I trade crypto at 14?
Although there is no age restriction for trading cryptocurrency, we suggest waiting for your eighteenth birthday or involving your parents.
Cryptocurrency for teens is written in the stars since modern youth love to control things, and cryptocurrency offers the same sense to them. Although it is an infant idea, it is indeed here to stay.
Furthermore, cryptocurrency has gained an enormous following among young investors. Since there is no age requirement, and it offers anonymity, teens can quickly jump in and try their luck with the crypto world.
However, governments devised rules and regulations to govern their trade as the crypto market increased. Along the same lines, the U.S. government restricts the sale of cryptos to teenagers. However, they can open a custodial account jointly with their parents to operate cryptocurrency.
Similarly, teens should consider risk factors as the crypto market is full of humps.
We leave you hoping to hear back from your side in the comment section. Please let us know at what age did you start trading cryptocurrency.