Is Cryptocurrency a Good Investment for Young Adults?

Cryptocurrency's future.

Interested to know more and perhaps invest a bit in cryptocurrency? Crypto is just as exciting as it is volatile, so let’s touch up on some basics before you start choosing your crypto coins.

Cryptocurrency is digital currency in which the transactions are recorded on a decentralized system protected by cryptography (a.k.a., the blockchain). The currency you probably use on a day to day basis is fiat currency (for example USD, SGD, Pound sterling, Rupiah), which is controlled by national governments and central banks. The allure, which is also the risk of cryptocurrency, is precisely because it’s nature is decentralized. There is no party that can protect you if the value of your assets crash. At the same time, because of this, there is no limit to how high the assets can be valued.

And this is why most people buy cryptocurrency: because they believe in the future the valuation will rise and they will be able to make extra cash out of having those digital assets. So is this belief proven? To answer this, let’s take a look at Bitcoin, the first successful cryptocurrency.

Launched in 2009 by Satoshi Nakamoto (a pseudonym for the mysterious real creator/s), people started picking it up and trading it. At the end of 2010, Bitcoin was trading at a value of USD 0.83. The following decade saw ups and downs, with an all time high early 2021, with a value of USD 64,829. With numbers like these, it’s no wonder there are crypto millionaires hanging just around the corner. In December 2021, Bitcoin crashed by nearly 50%. That’s a lot of money lost in a very short period of time.

So yes, it’s possible to make extra money (a lot of money) with cryptocurrency, but in this game, it’s also possible to lose a whole lot of money. With this framework, we visit the main question, is cryptocurrency a good investment for young adults?

Everyone’s financial and living circumstance is different. But generally speaking, if you are under 30 years old, have a stable income, healthy physique, and have managed to pay off all your daily needs (don’t forget insurance), and still have some extra cash lying around, then yes, the next step would be to invest that extra cash. Now keep in mind every investment has risks (ranging from low to high) and rewards (also ranging from low to high) so the key is really then to diversify your investments. In that spirit of diversifying your investment portfolio, buying some cryptocurrencies would be an exciting option to consider.