There is a lot of excitement, and even more confusion surrounding Bitcoin. It seems like you can’t go one day without hearing about the stock soaring or plummeting from an Elon Musk tweet. As investors or parents to young investors, the returns Bitcoin promises can be enticing. For those of you who don’t know or are simply confused with the crypto craze, Bitcoin is a decentralized digital currency, without a central bank or administrator. This currency can be sent peer-to-peer on Bitcoin without the need for mediators. Again, it’s easy for your young investors to get excited about Bitcoin, but here are three BIG things they should know to safely invest in the currency.
Like learning any new skill, or carving your own path, it is important to start small. Even though your child or teen wants to “get profits fast” it is important for them to understand the tremendous risk involved with investing in this volatile currency. This is certainly not for the passive investor. Bitcoin needs to be watched carefully since it is largely controlled through external forces. One tweet from an influencer can send Bitcoin plummeting or skyrocketing. If your child doesn’t have a portfolio started, then advise them to make a small investment, something they can afford to lose if Bitcoin goes south. If they do have a portfolio, they should only dedicate a small percentage. We recommend investing no more than 5%.
Understand The Risk & Volatility
If keeping cool is not your child or teen’s forte, we advise avoiding Bitcoin at all costs. However, if they can handle some pressure and make rational decisions in volatile times, then they could find success investing in Bitcoin. Back in 2013, Bitcoin was trading below $130 then flew to $17,060.55 in 2017, before crashing in 2018. Bitcoin jumped to $64,000 in April 2021, it now sits at $42,000. So fasten everyone’s seatbelts!
Keep An Eye On Other Cryptocurrencies
It’s not just Bitcoin your child or teens has to watch. For example, when buying Apple stock, it is important to look at how competition like IBM and Microsoft are performing to get a litmus test for the industry as a whole. There are Bitcoin alternatives including the popular Ethereum, used for trading NFTs, and meme stock Dogecoin, which Elon Musk fancies one day and hates the next. To understand the future of Bitcoin, it is important or your child or teen to keep their eye on the competition and more importantly the media to properly time the market and earn a rewarding return on their investment.
And if you or your child still have questions or concerns about Bitcoin investing or want to learn more about cryptocurrency as a whole, we offer a Bitcoin masterclass to show your teen the ins and outs. We’ll cover the history of cryptocurrency, crypto exchanges, and different digital currencies! For more information visit: https://explorerhop.com/products/bitcoin-blockchain-grade-6-11?_pos=2&_sid=a7cbec55f&_ss=r