he answer to this question is case-specific. Whether a student or young person should invest in cryptocurrency or not depends upon the particular situation, condition, knowledge about cryptocurrencies, trading skills/experience, and many more factors. Now, let’s explore all the possibilities before answering this question.
Why Do Students and Young Invest in Cryptocurrencies?
Cryptocurrencies have come up as one of the most rewarding financial assets in the last few years, especially for the university students and young. The increasing pressure to finance student loans and keep up with the expenses, more and more students are investing money in cryptocurrencies, especially Bitcoin (which holds a 65% share in the crypto market).
Should Students and Young Invest in Bitcoin and Other Cryptocurrencies?
The answer is relative in nature.
- If you are investing money from your student loan or other loans (which many university students generally do), you should immediately stop now. Investing in cryptos is a speculative business and you can never be sure whether you will make money or lose it.
Is it Good for Students to use Loan Money to Invest in Cryptocurrencies?
The millennials attending universities are particularly open to learn new technologies so that they can create new and better opportunities for themselves and their families. While investing in cryptocurrencies, many are doing so with their borrowed money (sometimes from student loans). As the market is highly volatile and students can’t give full-time to trading cryptos, it is not a good option to invest from borrowed money.
In the United States, students can take out the surplus funds from the cost of the tuition and no proof is required to verify where the money is spent. This is giving rise to irresponsible investing by many students. Reports say that ⅕th of the college students are using their student loans for investing in cryptos.
No matter whether you are a pro crypto investor or a newbie, you should never use your student loan or any other debt to invest in Bitcoin and other cryptocurrencies.
What are the Reasons for Students and Young Persons to Invest in Bitcoin and Cryptocurrencies?
Reason #1: Great Opportunity for Students and Young to Robustly Grow their Initial Investment
Bitcoin’s ascent is phenomenal. In the last 3-years, Bitcoin’s price against the US Dollar (BTC/USD pair) has increased from around US$1,000 at the beginning of 2017 to the all-time high US$24,255 in December 2020.
If you invested US$1,000 during January-February 2017, your return of investment (ROI) by December 2020 would have been around 2,400%. In 2020 itself, it has increased by over 230%. Even if you invested a small amount of money (say, US$100) every week since 2017 by following the dollar-cost averaging (DCA) method, you would have received a return on investment (ROI) of 160% in 3-years.
The ROI of the other leading cryptocurrencies are:
- NEM (XEM): 555%
- Chainlink (LINK): 484%
- Ethereum (ETH): 344%
- Cardano (ADA): 321%
- Monero (XMR): 236%
- Stellar (XLM): 204%
- Litecoin (LTC): 151%
- Dash (DASH): 117%
- Zcash (ZEC): 102%
- Tron (TRX): 95%
- IOTA (IOTA): 72%
- NEO (NEO): 59%
- Tezos (XTZ): 39%
- Bitcoin Cash (BCH): 37%
- Basic Attention Token (BAT): 16%
Wall Street is almost unanimous that 2021 will be a bullish year for Bitcoin and other leading cryptocurrencies such as Ethereum (ETH), Chainlink (LINK), Litecoin (LTC), and many more. Chainanalysis data confirms that the 2020’s bullish run was fuelled by increased investments by institutional investors such as Paypal, Square, MassMutual, Grayscale, MicroStrategy, and many others.
If some of the analysts (including ) are to be believed, the BTC/USD pair is expected to increase by 10-times from the current level in the next 12-months. Sounds outrageous, right? If you check the volume of investment to be invested in the coming years, especially from 2021 is enormous.
Reports say that the pension funds and insurance companies are gearing up to make investments to the tune of US$600-billion in 2021 and near future. This means that the amount of investment likely to be invested mainly in 2021 is equivalent to the current global crypto market cap. With this gargantuan institutional investment, there should be no doubt that the market will experience a paradigm shift.
- An asset management firm having more than US$230 billion under management, Guggenheim Investments, expects the worth of Bitcoin to become around US$400,000 in the near future. Scott Minerd, the chief investment officer of Guggenheim, believes:
“It’s based on the scarcity and relative valuation to things like gold as a percentage of GDP. Bitcoin actually has a lot of the attributes of gold and at the same time has an unusual value in terms of the transaction.”
- Founder of FiCAS AG, Ali Mizan believes that the Bitcoin price will be anywhere around the US$200,000-US$300,000 range by the end of December 2021 to March 2022. His comments are especially important to note because he had correctly predicted the past bullish price rise of BTC in 2016, 2017, and 2020.
- A renowned crypto statistician, Willy Woo, believes that the Bitcoin price will rise as high as US$300,000 by the end of 2021. According to him, the US$200,000 target looks conservative.
- Nexo co-founder Antoni Trenche believes that the BTC/USD pair will rise to US$50,000 by 2021-end.
No matter what their estimated target for BTC is (be it US$400K, US$300K, US$200K, or US$50K), it seems that Wall Street is almost unanimous that 2021 is going to be a robustly bullish year.
The Bitcoin and cryptocurrency market, as a whole, are a great investment opportunity. If you are a knowledgeable person in matters of finance, cryptocurrency market, and trading, it is a totally credible investment opportunity for you.
The sooner a student or a young individual can learn about digital money, the sooner he/she can start investing in cryptos and start earning. Even if you don’t want to deal with cryptos full time, you can use this opportunity to earn passive income from cryptocurrency trading.
There are many students and young persons (having small investible money with them) are trying out autopilot crypto trading bots for making passive income. These automated trading bots (such NapBots) allow you to concentrate on your studies as these bots automatically analyze market data and make trading operations on your behalf based on indicators built with these data. This crypto robot removes fears and emotions from their trading and enables you to run techniques normally available in hedge funds.
Reason #2: Better Store of Value than Gold
They say start early. If you want to see your money grow and store value over a long period of time, Bitcoin is definitely one of the most promising financial assets. JPMorgan’s analysts believe that the crypto market will put a bear case for gold in 2021 and beyond.
To hedge their portfolio’s return, do away with the global political uncertainties, and beat increasing inflation, more and more high networth individuals, big players, and institutional investors are considering Bitcoin as a better store of value than gold. The analysts believe billions of dollars worth of investment are likely to flow from gold to Bitcoin in the near future, starting in 2021.
Reason #3: Promising Career Opportunities
You should start teaching your children about cryptocurrencies because they provide a promising career opportunity. A wide array of new perspectives for young scholars open up because of digital currencies and the underlying blockchain technology. If a student starts dealing with cryptos early, they could explore some of the highest paying career opportunities such as:
- Cryptocurrency analyst
- Mining of Bitcoin and other cryptocurrencies
- Blockchain Developer
- Blockchain-based software engineer
- Cloud engineer, who is in charge of blockchain protocols
The paycheck is also hefty. If you are working in the blockchain or cryptocurrency-related positions as developers in the US, a talented developer may earn more than US$100-thousand. With the high rate of growth in the crypto world, the number of vacancies in 2021 and in the next few years will boom.
Reason #4: Governments have started Taking Cryptocurrencies and Blockchain Technology Seriously
Governments of countries across the globe are taking note of the growing market of cryptocurrencies and the effectiveness of blockchain technology. They are increasingly becoming more interested in digital coins. In fact, different countries have started to release their own digital coins.
One of the most promising of them all is the Petro (₽), or petromoneda, a cryptocurrency issued by the Venezuelan government. The countries that have either launched their own cryptocurrencies or plan to do it very soon include Russia, China, Japan, Ecuador, Sweden, Singapore, Estonia, and many more.
Top 5 Tips to Invest in Bitcoin and Other Cryptocurrencies
1. Only Invest that Much of Money which you can Write off
They say, “Never put your eggs in one basket.” This is because if one basket having all the eggs break, everything will get ruined. If you maintain a healthy portfolio, that will give you a considerable return in addition to the right balance. As you are a student, you have to pay your rent, gtet food, buy clothes, and so on.
If you invest all your money in cryptocurrencies, you may lose all your money (especially when you buy at higher price and sell at lower prices). I’m not giving you an ominous picture. What I’m trying to say is that it is a very possible scenario and you should take all possible precautions and diversify your portfolio to hedge your risks.
2. Stagger your Crypto Investments
When you make a lump sum investment, your risk profile increases. As you are a student, you must be cautious and try to average out the risk potential. This approach will decrease your rate of return but will also save you from going kaput. That’s why you should invest a certain amount of money at a regular interval, say, every week or every month. By staggering your purchases you can benefit from dollar-cost averaging.
An example will help you understand better. Suppose, you invested US$1,000 in BTC/USD during January-February 2017. Then your Return Of Investment (ROI) by December 2020 would have been around 2,400%. This means the value of your US$1,000 investment at current would have been US$24,000.
However, you could follow a “safer” method of investing suggested by the likes of Warren Buffet known as the dollar-cost averaging (DCA) method. As per this method, you have to invest a small amount of money (say, US$100) every week. If you had invested US$100 every week in Bitcoin (BTC/USD) since December 2017, you would have invested US$15,700 till December 2020. At current prices, the total value would have been US$40,867. This means your ROI would have been 160% by 2020-end.
Staggering investment distributes your risk evenly over a certain period of time, thereby decreasing your risks significantly. However, it also gives you a return which is significantly good too.
3. Don’t be Emotional while Trading
Bitcoin price is highly volatile. After investing your money, stop checking your net Bitcoin/crypto worth every second. Instead, check the technical charts, back it up with the fundamentals, and then make entry into the crypto market. Always remember that prices will come down heavily but they will also come up.
There are two ways you can feel less emotional about your investment:
- Invest only a part of the money available to you. Always remember that don’t overstretch and invest only that much of money that you can write-off.
- You can go for Crypto Trading Bots such as NapBots.com. These bots are software that remove fears and emotions from their trading, automatically analyzes market data, and makes trading operations based on indicators built with these data.
4. Avoid Greed
Always start investing into cryptocurrencies by realizing smaller percentage profits. At the end of a certain period of time you’ll find that these smaller profits have added together to provide you a healthy ROI. If you get too speculative and try to earn more, the market may come down and it can block your money for quite some time. So, try to sell your Bitcoin by realizing smaller profits.
5. Read the Fine Print
When you are buying Bitcoin or other cryptocurrencies from a crypto exchange, always check the brokerage you have to pay. This is important because you can earn profits only after adding the brokerage charges into your total cost of buying crypotos. Also check whether there are any charges associated with depositing/withdrawing fiat money.
Suppose, the brokerage charge of buying a crypto is 1%. Always keep in mind that you have to pay this brokerage charge every time you buy or sell. So, your margin should always be greater than your initial investment in buying the cryptocurrency plus the 1% (paid at the time of buying)+1% (paid at the time of selling)=2% brokerage fees. If you invested US$1000 in Bitcoin, to earn profit you should sell it above US$1,020 (considering your brokerage charge at the time of buying and selling is 1% each).
What are the Top 10 Cryptocurrencies you can Invest in 2021?
- Bitcoin (BTC)
- Chainlink (LINK)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- TRON (TRX)
- Cardano (ADA)
- IOTA (MIOTA)
- Zcash (ZEC)
- Stellar Lumens (XLM)
Can you Earn Passive Income even when you Sleep?
Yes, you can and it’s not a joke. Cryptocurrency trading bots such as NapBots can help you out.
Cryptocurrency Trading Robots automatically scan the market in real-time and trades for you. They run 24/7, which means that you can keep earning your passive income even when you are sleeping. This gives you an edge over other investors as it enables the bot to book profits on your behalf when other investors are sleeping.
Smart crypto investors always remain prepared to get the best of a big market move. They don’t wake up suddenly. To remain alert round the clock, they use cryptocurrency trading bots so that they don’t miss any big market movement.
What is NapBots?
NapBots.com is a Trading Bot, cloud-based platform, on which you can connect to major exchanges such as Binance, Bitmex, Bitfinex, OKEX, Kraken, Bitstamp, and Bitpanda.
The best thing about the Napbots trading software is that you don’t have to monitor charts and candles to predict your next move. Any novice trader with zero skills can also start trading like a pro and earn money with this unique trading tool. Let Napbots take full control over your trades in just a few clicks. Now, sit back and enjoy earning money.
NapBots crypto trading software is special because it comes with:
- A unique trading algorithm that processes market data for you
- A unique crypto trading bot library so that you can create your own mix of trading strategies
- Autopilot mode that enables you to automate trading 24×7
- An easy-to-use interface so that you can copy the proven strategies of NapBots to make successful trades and make money
NapBots offers complete trading automation solutions through the use of its own tested trading strategies; offering quantitative trading strategies previously reserved for hedge funds to the public.
The setup and installation process are easy. So, the non-experts can also use it. The simple and special approach of NapBots helps it provide you with excellent ROI.
The team of professionals behind NapBots has extensive experience in the financial market. They have put their years of experience in place so that you can easily automate the management of your funds with no technical skills. This service can run 24/7 and work as your passive source of revenue even when you sleep.
Our pricing is simple and there are no setup fees. 7 days free trial is also available.
Are You Ready To Start Automating Your Passive Income Now?
If you still need assistance, you can refer to the following guides: