Bitcoin for kids – is it a good idea and should children be introduced to cryptocurrency?

Bitcoin for kids – is it a good idea and should children be introduced to cryptocurrency?

Cryptocurrency as an investment continues to be a very divisive asset class, with many experts warning its current momentum can’t be sustained, while others welcome the likes of Bitcoin and Dogecoin as a completely legitimate holding. Regardless of where one stands on cryptocurrency, recent developments on social media, particularly TikTok, can make for very uncomfortable viewing.

Anthony Portno, the Founder of Traders of Crypto, understood why this could make people uncomfortable but he noted the importance of educating youngsters in financial matters before they take unsupervised actions.

He said: “While there are obvious arguments for not teaching kids about crypto, at an appropriate age I think it makes sense.

“It’s a bit like sex education – they are going to find out about it at some point, so do you want them to have quality reliable knowledge or just take what they watch on Tiktok as gospel.

“Crypto is highly risky but it’s everywhere on social media so give them the tools to make wise decisions and fully understand the risks. If you look at what’s happening with Dogecoin you can see plenty of adults who need it too!”

Thomas Skinner, the founder and financial planning director of Barnaby Cecil, was welcoming of the concept: “It is never too early to start teaching your children about finances – habits around money are set at a very young age.

“The way in which we now manage money and payments is constantly evolving – many children now have the gohenry app and card as money becomes less physical it is important for children to understand different ways to save for the future.

“I think cryptocurrencies are here to stay, so it is important that we teach children about them and digital banking in a safe environment. It also helps build on some fundamental life skills – computing and maths – letting children see how investments can multiply, or indeed go down. One important factor to consider when teaching children about investing online, is about the internet and financial safety – so how they store the coins, along with all kinds of digital assets and protecting passwords.”

On the flipside of this, several financial and savings experts have expressed dismay at the proposal.

Lord Lee of Trafford, the Liberal Democrat Life Peer, was particularly damning of the news.

He responded: “As one who has spent a lifetime encouraging the long-term private investor and more recently young people by publishing my Yummi Yoghurt: A First Taste of Stock Market Investment – I believe the first book of its type focussing on teenagers – I find the suggestion of a kid’s piggy bank for bitcoin etc., deeply disturbing.

“Surely this type of stunt has to be condemned by all responsible people.

“If adults want to speculate in cryptocurrencies that is one thing, but to encourage young children that this is a sensible way forward? One might as well open an account for them at Ladbrokes!”

Similar sentiment was shared by Cem Eyi, the Co-Founder of the Beanstalk App, who said: “The link between chores, pocket money and saving is potentially a valuable one but I am not sure that children’s first exposure to investing should in the highly speculative and unregulated world of volatile crypto currencies and NFTs (Non Fungible Tokens).

“There’s a lot of noise and excitement around the peaks and troughs, but the focus should be on having children learn positive financial habits and helping families build a nest-egg for their children’s entry into the adult world.

“Understanding the differences between putting money in a bank account and investing is something they do need to learn about and particularly that, although riskier, over the long term, shares have tended to outperform cash. The lessons I’m trying to teach my children, and others via the Beanstalk app, is that investing in a well-diversified regulated global shares fund, covered by FSCS investment protection, should become automatic and simple.”

Kevin Brown, a savings specialist at Scottish Friendly, concluded on this: “The industry should be focused on making children’s investing straightforward, affordable and accessible to everyone, rather than heavily promoting products so volatile that they could potentially wipe out large chunks of their pot overnight. Rather, we should be making it easier for parents and grandparents to save towards their children and grandchildren’s future in a safe environment. A diversified portfolio, and a little and often approach to begin with could go a long way to helping more children and adults develop a savings habit.”

Published at Sat, 15 May 2021 03:00:00 +0000