Crypto trading is risky because of its highly volatile tendency, but even has the potential of bringing in huge returns. Looking at the involved risk is cryptocurrency a smart investment that can help to support your kid’s college funding down the road?
Some of the reasons you can consider the crypto investment as a saving to fund your child’s college. According to a cryptocurrency expert, it is good to diversify your financial investment portfolio and also consider adding cryptocurrency to it. The amount of stablecoin to hold in your USDC wallet as savings for college funding is personal preference, budget, and goals. Many people hold the majority of crypto assets in their portfolio, while a few dedicate some percentage.
Volatility & stability
Bitcoin has a solid performance record and has the potential to support your kid’s college education. BTC has its ups and downs but has proven its value, since its introduction in 2009. It is decentralized and has a fixed supply, so many consider it to be a solid long-term investment. It is a great asset for a long time horizon like more than 5 years is safe.
There is no strong direction in where the BTC price will move. It is highly volatile but you need to consider more time. To counteract major swings invest in USDC stablecoin. The USD Coin is attached to the US dollar. It means 1 USDC is equivalent to 1 dollar. Stablecoins are designed to provide a more stable value than a rate that theoretically appreciates over time.
You are wondering why to invest in USDC when its value is equal to one dollar. Generally, USDC is commonly used to store in ZenGo wallet and later you can buy other cryptocurrencies. You don’t have to move dollars or euros in & out from exchanges. You can transfer USDC 24/7, which means college fees can be paid instantly without having to wait for bank transfers, even on holidays. Users can use USDC to pay for their child’s college fees across borders. Cryptocurrency has no geographical limits because the transaction is quick with low fee.
Dollar-cost averaging strategy
Even if USDC value doesn’t appreciate as it is pegged to the US dollar, passive income is made by lending to crypto investors. You can even use it to trade other currencies like BTC or ETH. Experts recommend using the dollar-cost average investing method.
It means making consistent crypto investments every week. A regular amount goes towards investment at regular intervals. So, when the market is low the fixed crypto amount will buy more and vice versa. The purchases will balance one another and over time you will be ahead of what you would with less or sporadic investment. Soon, you will learn to handle the dollar-cost average strategy. You gain a leeway for more time-sensitive investments.
Chances you may be unable to support your child’s college funding
Cryptocurrency investment value may not be on the upside at the time you have to pay college fees. Flexibility to access specific fund amounts at a specific time is essential. There are chances that it may not coincide with a market swing. It is something to seriously ponder over, but it is just like stock trading. The only difference is crypto swings can be massively higher at times and if you are lucky….!