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Crypto, bitcoin, ethereum…We’ve all heard of them. There is no denying that cryptocurrencies are a hot topic and have seen incredible growth over the past few years. In fact, we have seen major companies such as Home Depot and Whole Foods begin to use software that allows customers to pay with Bitcoin. As the crypto space continues to expand, many investors (including myself) are choosing to add them as a balanced part of their investment plan. But, did you know that you can invest in crypto for your kids? No? Keep reading!
When choosing investments for my daughter, I wanted to make sure that she has a well-diversified portfolio with an acceptable amount of risk to maximize her potential growth. This is why I have decided to add crypto as a portion of her overall portfolio.
Here are some of the reasons why my 4 year old owns crypto:
Past Performance and Future Expansion
I know what you may be thinking…crypto is super volatile. Yes, the prices of the major players (like Bitcoin and Ether) go up and down in some pretty significant swings. However, if you zoom out and look at the performance over the past few years, you will see that both Bitcoin and Ethereum have performed remarkably well overall. Similar to our approach to stocks, we are using a “buy and hold” strategy with her crypto holdings. We are buying the major players (no meme coins here) and holding for the long term to maximize returns!
Second, there’s no denying that the crypto space is expanding. We are seeing more companies accept crypto as a form of payment. We are even seeing people choose to use crypto as a part of their retirement plan. In fact, Fidelity (one of the major brokerages) has recently begun to allow individuals to add bitcoin as a part of their 401(k).
We can’t predict exactly what’s going to happen in the crypto space, just as we can’t predict exactly what’s going to happen in any market. However, I believe it is important to add an acceptable amount of risk to her portfolio to maximize growth, as (in my opinion) there is a good chance crypto is here to stay.
Diversifying Her Portfolio
Building a diversified portfolio is an important part of my strategy for my daughter’s investments. Adding crypto to her portfolio is yet another way I am diversifying for her, just as I am making sure she is diversified in the stock market (having stocks in different sectors, diversifying through funds, etc.) She is only 4 years old, so while her portfolio is diversified across the stock market, I have also decided that we are more risk tolerant (she has many years to ride the ups and downs of both the market and of crypto) and while adding crypto to her portfolio is a bit riskier, it can also provide significant returns.
Other Investments for My Daughter
Although I have chosen to invest in cryptocurrency for my daughter, we are still both curious and cautious. We also have other forms of investments for her (a 529 plan as well as a custodial account which is held with EarlyBird.) The majority of her portfolio is in stocks, ETFs, and target date funds that align with my timeline, goals, and risk tolerance. As with any investment, I am doing my research and adjusting her portfolio as I see fit. We absolutely love EarlyBird for her custodial account! Keep reading if you are looking to open an investment account for your kids.
How We Invest in Crypto
Recently, EarlyBird started rolling out early access to their newest offering, EarlyBird Crypto, a way that parents will be able to open a crypto wallet for their child. I was beyond excited when I heard this, as I haven’t seen any other way to buy crypto for your children. We already had a custodial account with EarlyBird and loved the functionality.
Here are some of the logistics (because if you’re reading this, you’re probably like me and want to know the ins and outs of how it works!)
- EarlyBird partners with Apex Clearing Corporation, a third-party SEC registered broker-dealer and member of FINRA and Securities Investor Protection Corporation (SIPC), holds all investment accounts. This means the investments in your account are protected up to $500,000 total.
- Your account is protected thanks to: authentication, automatic logouts, ID verification to prevent unauthorized access, and 256-bit SSL encryption
- EarlyBird Crypto wallets are powered by Gemini, an industry-leading crypto exchange with a deep commitment to security and compliance.
More About EarlyBird:
EarlyBird is one of the simplest ways I’ve found to invest for my children’s future! Parents, grandparents, and family friends can gift to their children’s future and leave notes of love in via video or photo memories with their contributions.
If you’re ready to invest for your children, you can open a custodial account or crypto wallet using the links below!
- Open a custodial account – Personalize your child’s portfolio in minutes and invite family and friends to contribute. You can even start an account before baby is born and share the link on your registry.
- Open a crypto wallet – Get started with a $25 gift from EarlyBird, and invest it in Bitcoin or Ethereum to make your child one of the world’s youngest owners of crypto.
- Send a gift – Invest in a child that you love for an upcoming holiday, birthday, or just because—all without needing to download the app.
I am so excited to continue to contribute to my daughter’s future using the EarlyBird platform. I can’t wait to share with them the notes and videos with messages of love from their family and friends!
*Information provided is for informational and educational purposes only and should not be construed as professional financial advice. Investing involves risk, please consult the appropriate financial professionals before making any investment decisions.*
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