The day of his 18th birthday senior Tony Velez knew exactly what he was going to do: download the CoinBase app and start investing his money into cryptocurrency.
The instability of the economy during the pandemic has led Velez and senior James Sutherland to decide to invest their money in something that 53% of students said they have limited or no knowledge about: cryptocurrency.
“You should know what you’re getting into,” Velez said. “Don’t just burn your money because it’s really easy to just put in 10 bucks and then maybe the next day it’s all gone.”
Cryptocurrency can still be an unstable source of income. To Velez, the ups and downs of trading comes as something that has to be accepted and accounted for, but he said the struggles are worth it.
“I probably cried over [cryptocurrency] a couple times, I’ve lost a good amount, but I’ve also gained that amount back,” Velez said. “The gains aren’t crazy. That’s why I just put my money in there and let it do its thing. I know it’s going to increase over time.”
Not having knowledge on cryptocurrency can be very detrimental to someone who wants to get involved because of the volatility of the market and the ability to lose money at any given moment with a bad investment.
“If you don’t have good money or spare money just to experiment with, it’s not a good idea just to put in everything you have,” Velez said. “Have some money set aside and then try to keep everything long term.”
The first cryptocurrency students on the survey said they think about is Bitcoin because it was the first to be created and had the highest peak value at about $67,000.
The creator of the coin is unknown, but the intention was to create an alternate currency that couldn’t be controlled by the government, Sutherland said this is why he invests.
“I share the fears of the people who don’t like the fact that the U.S. dollar can be inflated like crazy,” Sutherland said. “I noticed the trends of crypto where people are dumping their money into it without even knowing what it is and that sort of blind faith is what I like because it will really boost share prices, and it will also contribute to volatility but I would rather honestly be in a volatile market.”
Sutherland said he didn’t understand why he would keep his money in U.S. dollars when he could put it in something to make it grow steadily, which is why he originally got into the stock market before moving some of his money into cryptocurrencies.
“When I was receiving a paycheck, I would put 100% of it in the stock market and cryptocurrency, 50-50,” Sutherland said. “If I need money for gas, food, etc., I’ll just pull out from one of my stock investments, which are paying me dividends.”
Sutherland also said he has done extensive research on the subject of cryptocurrency to be able to know that he is putting his money in the right things at the right time. He predominantly reads books about investing, but said there are good YouTube videos too.
“You can find anything online, so just look it up and make sure it’s not biased information,” he said.
Another thing that Sutherland thinks will be a major part of the future is NFTs, a picture that is, in theory, owned by only one person and its authenticity can be verified through a specialized code. NFTs are not replicable because of the way they are coded. Sutherland said this is how he believes people will be identified in the future.
“They’re an asset,” Sutherland said. “For instance, in the future, all IDs, just like your driver’s license will probably be an entity. So you’ll have a singular NFT that only you have under a certain code.”
A willingness to lose money is what Sutherland said investors need to have when getting into cryptocurrency or anything similar because they’re going to need firsthand experience, outside of a video or book, with the market before they can really understand it.
“My advice would be to only put in what you’re willing to lose because it’s not a guaranteed investment,” Sutherland said. “Nothing is guaranteed in the market, whether it’s the stock market or the crypto market, so only invest what you’re willing to lose and don’t just blindly invest your money.”