Students should think about investing in cryptocurrencies
Bitcoin and other cryptocurrencies have been taking the world by storm with their decentralized and profitable currency. College students should start thinking about investing as cryptocurrency can be very lucrative.
Bitcoin has value because of the technology behind it, blockchains. Blockchain is a type of database that stores data in blocks that are chained together. One block is filed with data and attached to a previous block in chronological order.
Crucially, blockchains are immutable which means that the data is irreversible. For Bitcoin this results in transactions that are recorded and viewable.
Of course, Bitcoin isn’t the only cryptocurrency around, but it is the most important and well known. A lot of consumer expectations of the market are based on how well Bitcoin is doing. If Bitcoin is surging, then it’s a safe bet that other cryptocurrencies are thriving.
In late October of 2021, it reached a new, all time high of $66,930. Other cryptocurrencies like Ethereum surged as well. The new ATH was a result of the first-ever Bitcoin-linked Exchange Traded Fund going live on the New York Stock Exchange.
Steps like these are showing just how much potential cryptocurrencies have in the future. It even became legal tender in El Salvador, meaning it is now issued by the government.
There is a lot of potential in cryptocurrencies as it is still early in its existence leaving room for young people to invest. One does not even have to buy the entire Bitcoin. In fact, most shares are fractional so people don’t have to pay all $66,930 for one Bitcoin.
It is important to know that cryptocurrencies are extremely volatile. One tweet from Elon Musk can send the price of any NFT tumbling down which actually happened. While people should start trading cryptocurrency and investing, it’s important to know the risks and remember the golden rule, don’t invest what you aren’t willing to lose.
Cryptocurrency as a speculative asset shows impressive returns. People that bought Bitcoin were rewarded with two new ATH’s this year.
“I strongly believe that students should start investing in a stable and reputable form of crypto,” said electrical engineering sophomore Ben Buley. “Bank experts have been predicting all of 2021 that the value of USD is going to decrease. Other nations are also beginning to implement crypto in their societies. I think it’s smart to hold financial assets to something that will only become more common in the near future.”
The monetary benefits of cryptocurrencies are numerous for potential investors, but there are societal benefits as well. Bitcoin and other cryptos are decentralized, meaning that it’s a bank-free method of transferring wealth. If you don’t want your money to be used by banks, then cryptocurrency is a good alternative.
Some cryptocurrencies like XRP are centralized, but because there’s no central administrator, there is no risk of centralized security failures. There are also lower transaction costs and more transparency between parties.
It’s important to invest into reputable currencies, because just about anyone can start a new cryptocurrency. Projects can be started with the intention of making a quick buck rather than a stable crypto so make sure that whichever cryptocurrency you invest in is legit.
Bitcoin and Ethereum are the most reputable cryptocurrencies on the market right now, so any fledgling investor should start looking there. Interest in cryptocurrency is rising and college students should take advantage of that and think about investing in their future.
Fernando Rivera is an economics sophomore who can be reached at [email protected]