The crypto market started to show recovery signs from its sharp fall in this year’s second quarter. Its flagship coin Bitcoin lost over 50 per cent of its value within 2 months during such a period. Yet when the third quarter started officially in July, the speed seemed to get shifted away from the constant fall. Bitcoin for instance showed signs of strength as it closed more than the dreaded level of $20,000. Check how bitcoin loophole live differs conventional apps.
Thus one can agree that the market has already started to prepare for one rally that may be coming later in 2022. With such a thing in mind, the crypto market prospect seems to brighten up. The idea of cryptocurrency being one viable tradable investment may present a chance for those that are ready to take on high risk in exchange for a probable big winner in their respective portfolios. Additionally earlier in 2022, a few of the most renowned fund managers like Vanguard began rolling out a retirement fund type. It included blue chip cryptocurrency projects along with blockchain ventures.
Now college/education funds have started to follow the trend. Everyone will begin to see a few alluring options soon.
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Thursday 19 Dec. 2024
Now a large number of parents are planning to pay for their kids’ college with cryptocurrency. 87 per cent of parents saving for college for their kids say they invested in cryptocurrency as per the current poll of 1250 parents. Yet is investing in cryptocurrency to pay for your kid’s college a great idea? There are warnings given to such newness, volatility along with unregulated status as per investment professionals and cryptocurrency professionals.
Let’s understand how one could capitalize on such an opportunity and if you should be considering this or not.
Things to consider before you take the path
Do your due diligence
As cryptocurrency projects stay highly risky, one needs to be alert and do their due diligence to research the potential crypto projects they intend to place their hard-earned money into. Also sticking to major coins like Bitcoin and Ether for building the bulk of their cryptocurrency allocation and transacting only with renowned and reputable cryptocurrency exchanges like Coinbase and Binance will be making sure a strong base for steering one away from a lot of risks.
Invest only small
Despite the current market rebound, the fact is that cryptocurrency is one of the riskiest digital assets one can invest in. Any allocation of less than 10 per cent will be perfect for ensuring you are never taking any unnecessary huge risk for the future of your child.
You will never wish to gamble the ability of your child to go to some college on a risky bet. You must have limited crypto exposure. It should never be the majority of anyone’s portfolio due to its volatility.
Time horizon is important
As a result of crypto’s high volatility, it is unwise to consider making any investment over a short time period. As it has already been illustrated previously, even Bitcoin the flagship coin may lose half of its value in two months. So to weather such volatility, ensure you have a long period horizon of at least five years or more than that.
Be aware of your coin and crypto exchange options
There are many ways of investing in crypto, directly or via options including hedge funds, exchange traded funds, and funds of funds that invest in mining of Bitcoin for example. If you have plans to directly own crypto ensure paying attention to quality. Families must stick to Bitcoin and Ether as they are the largest with respect to market cap. Also, buy the coins from popular exchanges.
Conclusion
As per a recent poll 87 per cent of the parents currently saving for the college fund of their children revealed that they previously invested or were investing in the market of crypto with hopes that it will be supplementing their capacity for sending their kids to a level of tertiary.
The high returns allure that the market enjoyed for the last few years has captured the interest of such parents. Yet it is especially vital to be prudent as the future of your child is at stake.
