by Most children over the age of 12 have likely come across the idea of cryptocurrency and Bitcoin. It may be that they have watched viral YouTube or TikTok videos where influencers explain how they have gotten rich quickly.
Alternatively, they could have recognised that it is an emerging technology that they could potentially take advantage of and maybe even have bought some cryptocurrency of their own; other kids, however, may have zero knowledge or interest in cryptocurrency altogether.
Why it Is Important To Educate Children About Cryptocurrency And Investing
In the past decade, we have all been bombarded with an endless slurry of video and social media content made by influencers, who show off the benefits of living their lives a particular way and inspire others to make similar decisions. In November 2021, the value of each
Bitcoin reached an all-time high, which caused Bitcoin holders to experience financial windfalls. In some cases, people profited millions of pounds when they sold their cryptocurrency for a profit. Some of these people, who made a significant profit on their investment, have turned to social media to inspire more people to get into the cryptocurrency field.
These individuals make videos sitting in flashy cars with wads of cash and explain that by getting into cryptocurrency, their wildest financial dreams came true. Viewers may distort risks in unregulated markets like cryptocurrency, leading to an inaccurate perception of investment dangers in any commodity.
This can mean that people across all age groups may discount the risk involved with investing and instead fixate on the potential profit they can make; after all, they have seen other people do this!
The reality is that the majority of people who invest in financial markets lose their money, but you won’t find many influencers who will go out of their way to tell you this.
Children are even more likely to underestimate the risks of investing, which is why it is a good idea to educate your children about cryptocurrency, investing and the risks involved.
After speaking with your child and you both decide that your child is ready to invest in cryptocurrency, it is important to reiterate that they may lose their money and there are no guarantees. It may also be a good idea for you to set a financial limit for how much they can spend, as this reduces the amount of money they can potentially lose.
Explain The Importance Of Research
Investing blindly in commodities that you don’t understand is a recipe for disaster. Before investing, it is important to understand the use case for the cryptocurrency, its financial history and the potential risks that investing in that cryptocurrency holds.
Another important consideration is to research the history of the creators of the cryptocurrency. It may be that they have a shady history that could haunt investors in the cryptocurrency you are currently looking at. If you do not feel comfortable with your child making such complex and potentially financially risky investments, you should make your views clear to them.
If your child is persistent in their desire to invest, you could tell them that they need to do extensive research on the cryptocurrency field as a whole and any cryptocurrencies that they want to invest in and report back to you.
This can mean that your child may have much better knowledge about what they are investing in compared to if you did not intervene.
Make Sure Your Child Fully Understands The Risks Involved
Cryptocurrency offers financial hopes, but stay realistic; statistically, you’re more likely to lose than gain. Exercise caution and understanding.
Educate your child on cryptocurrency risks through videos of real-life losses and their impact on people’s lives. This may open your child’s eyes and cause them to be a more responsible investor in the future, or this warning may cause them to pack in their cryptocurrency ideas altogether.
Explain That There Are Cryptocurrency Scams Out There
Scammers have prayed for hopeful people looking to invest their money for hundreds of years. Cryptocurrency was seen as a new, flashy investment opportunity by many who were hoping to profit. Unfortunately for them, cryptocurrency scammers were also looking to profit from the mistakes of investors. Scammers may contact people within the cryptocurrency space and offer to manage their cryptocurrency investments for them.
Once victims send their cryptocurrency, they have lost it to the clutches of the cryptocurrency scammer.
In some cases, it may be possible for cryptocurrency scam recovery lawyers to be able to recover cryptocurrency and financial assets back from scammers, which is why it is always beneficial to get in touch with a crypto lawyer to check your case.
Conclusion
It can be difficult for many adults to wrap their heads around cryptocurrency, let alone children. Educate your child on cryptocurrency risks. Younger generations, well-versed in the digital realm, benefit from understanding potential investment pitfalls.
