An increasing number of young individuals, mostly guys, have purchased cryptocurrency. Here are some suggestions without any criticism.
Cryptocurrencies continue to be purchased despite legal issues faced by business owners and organizations like Binance.
Despite a sharp decline in Bitcoin prices in 2022, the proportion of Americans holding cryptocurrencies increased from 3 to 11% in one year. A National Bureau of Economic Research study shows this percentage is at 12% this year, a 75% increase since its 2022 low. Crypto conviction or curiosity can be justified by answering simple questions about oneself and the reasons they find crypto appealing.
Moreover, you’re more likely to be a man.
A Pew Research Center study revealed that only 16% of women in the same age group own or used cryptocurrency, compared to 41% of males. This gender imbalance is attributed to chemical factors, as cryptocurrency enhances muscle strength and reaction speed but lacks judgment, according to retired neurologist William Bernstein. It is recommended to consult a woman or someone with different judgment levels to avoid such biases in trading.
Pew also found that while just 14% of white individuals held cryptocurrency, 21% of Black or Hispanic adults and 24% of Asian American adults did.
Young adults are promoting cryptocurrencies to help end the persistent income gap across races, but they may be targeted by influencers and celebrities selling fraudulent schemes. The desire to catch up on wealth accumulation in America is a key factor in promoting cryptocurrencies. The primary draw of cryptocurrencies is the potential for significant profits, as seen in the tenfold payback Bitcoin owners would receive if they bought in 2019 and sold in 2021.
The few people who experienced such benefits may have been fortunate, but anything like to that may never occur again. It takes exceptional ability (or, more likely, something comparable to lightning striking twice) to repeat a performance like that, both purchasing and selling at the exact perfect time.
Aadi Gujral, founder of the Foundation for Financial Literacy, discovered cryptocurrency during the early stages of the epidemic. He experimented with other currencies and coin mining, finding some profitable periods and others regrettable. Gujral believes that a stock index fund would have been a safer and better investment due to the volatility of cryptocurrency. He encourages others to try cryptocurrency and consider the potential risks and rewards.
But would he have learnt more from a dull selection of the 500 biggest stocks in the United States? Developed a greater understanding of his own risk tolerance? to improve as a teacher to kids his own age? Three times, no.
Ms. Espinal, the author of “Mind Your Money,” who teaches schools how to educate about cryptocurrency, is concerned about teens who invest all of their money in cryptocurrency and lose everything.
They may decide to retain their money in savings accounts because they don’t want to experience that emotion again and leave with a nasty taste in their mouth, she added. That may discourage individuals from investing, which presents a great chance for accumulating money, particularly for people of color.
Ms. Espinal is correct to be concerned, and many young adults who witnessed the significant losses suffered by their parents’ retirement accounts in the wake of the 2008 financial crisis were terrified to invest in equities for years. Choosing to avoid them during what developed into a raging bull market proved to be the incorrect move.
Few cryptocurrency owners are now hurting, though. According to the Pew study, just 3% of them claim that their behavior has significantly harmed their money.
That could alter quickly and without prior notice. But what it really means is that you shouldn’t invest more in cryptocurrency than you can afford to lose.
The worst error a crypto fan may make, according to Mr. Bernstein, is to consider holding cryptocurrency to be a genuine investment. His eldest granddaughter is 10 years old and will soon be old enough to understand his advice. According to him, investments either produce income (when a corporation pays a dividend on its shares) or have earnings (like a company whose stock you own). If you don’t sell it for a profit, cryptocurrency does neither.
You might think of your months or years of crypto ownership as you would your hours at the theater or a concert, and spend only as much as you think the enlightenment or pleasure you’ll receive is worth.
But don’t dismiss people like Mr. Bernstein out of hand. “That’s the thing about being an old fogey,” he said. “Older people don’t put money into crypto as much as younger people not because they’re not with it, but because they’ve seen this movie before, and they know how it usually ends.”
