Young people are starting their investment adventure younger than previous generations, thanks to the emergence of trading applications. For digitally native generations, streamlined user interfaces and gamified elements offer an appealing and familiar onramp. It’s a far cry from the days when you had to phone a stockbroker to place a transaction (and pay a commission!). This is a good thing!
The mixture of more accessible tools, the media’s adoration of every stock market drop and bounce, and the frantic ascent of crypto has piqued the curiosity of youngsters under the age of 18 who want to start investing immediately and reap the advantages of compounding over a longer period of time.
The good news is that parents can create custodial accounts for their kids. The assets are owned by their offspring, but the account is handled by the parent.
The bad news is that unless you’re just interested in stocks, bonds, and mutual funds, finding a non-traditional means to acquire crypto might be difficult whether you’re a youngster or a parent looking to buy crypto on your child’s behalf.
Because most crypto exchanges, which are the simplest method to purchase cryptocurrency, need traders to be at least 18 years old to open an account, this is the case. Overall, this is a wonderful thing for fraud prevention prevention, but it’s not fantastic for the youngster grabbing your elbow and urging you to purchase them Crypto through a digital bitcoin wallet with the check they gave you.It’s one thing to invest in crypto for a youngster, but it’s quite another to explain what crypto is and how it operates to them.
So, what’s the best approach to explain cryptography to kids?
Experts think the idea is to connect cryptocurrency to something that children are already familiar with. You may begin by comparing cryptocurrencies to the monopoly board game to introduce to them.
In its simplest form, a crypto currency is similar to the Monopoly hotel tokens. You purchase them using traditional currency (in this case, your Monopoly money). However, once you have your hotels, they are assets that may increase in value. Crypto coins, unlike Monopoly money, do not have a fixed value. They are only worth whatever someone is prepared to pay for them. Likewise, if you buy a hotel for $100 in Monopoly and another player agrees to pay $200 for it, the value of your hotel has grown at no cost to you.
Another important distinction to emphasise when discussing crypto with children is that, unlike Monopoly chips, crypto currencies are entirely digital.That means they’re all kept on computers and aren’t visible or touchable — but that doesn’t mean you can’t use them to make purchases.
They’re still assets with the potential to grow in value, and you may sell them for cash at any time.If your children aren’t fans of Monopoly (it does need a lot of concentration), you may use alternative explanations that you believe they’ll understand.However, before you buy, you should absolutely explain cryptocurrency and bitcoin wallets to the children you care about. They can be ready for the future and thus, learn how to buy and store bitcoins and other crypto.This means they’ll have a better understanding of and appreciation for your investment, and it’ll also help them improve their financial literacy abilities.