Cryptocurrency Investing for College Students

Matthew Dannenbaum
Jan 2, 2018 · 3 min read

As a college student, I know the struggle of wanting to invest money in something but not having the capital to do so. Luckily, an investment in cryptocurrencies does not involve putting up a large portion of your net worth, as it is too risky of an industry right now to take a large risk. That risk however comes with tremendous growth potential–which is why the industry is a great place for college students to invest a little money. There are hundreds of cryptocurrencies on the market, many of which are still in their early stages with coins costing under $5. Not long ago bitcoin and Ethereum were in that price range, so investing early (now) in a successful cryptocurrency can turn a small investment into a small fortune.

As with any investment it is important to make educated decisions while understanding the potential risks. The cryptocurrency market is new, uncharted territory and nobody knows if, when, or how much of an impact blockchain technology will have on the world and therefore the price of cryptocurrencies.

The majority of cryptocurrencies correspond to a blockchain platform created for a specific application. To name a few examples, Ripple is a payment system for banks and businesses, Ethereum is a platform to build smart contracts, and Cardano runs an array of financial applications. Therefore, research into the functionality of the platform to judge growth potential can be helpful in deciding which cryptocurrencies to invest in.

While research into the application of the cryptocurrency is important, there’s a whole lot of unknown in the industry that research will not illuminate. All of the cryptocurrencies and corresponding blockchain applications are advertised as world changing, but very few actually have the results and numbers to prove their growth potential–it is all speculation. Therefore, inherent in a cryptocurrency investment is the possibility of loosing it all, which you must consider when deciding how much money to invest.

This brings me to my main point on how college students should invest in cryptocurrencies. Because of the inherent risk of loosing it all, but potential for enormous returns, a small investment in multiple different cryptocurrencies would give you the best chance of investing in a winner and minimize the potential for loosing it all on one failure. If blockchain technology takes off, the growth potential for successful cryptocurrencies is huge and all you would need is a small investment to realize sizable returns.

As a college student extra money lying around is a rarity, but there are certainly ways to go about finding some capital to invest. Think about the opportunity cost of spending say $50 out one night (or any extra activity that involves spending money) and instead investing that $50 in crypto. The potential return of the investment has a greater chance of positively impacting your life than does one night out (unless you were to meet the love of your life). And if the investment instead goes to zero, well that night is history, you can hear the stories from your friends the next morning, and you did yourself a favor by staying in, studying, and getting to bed early.

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