Unexpectedly, many parents now intend to use cryptocurrency to pay for their children’s education expenses.
Notably, a recent survey found out that 87 percent of parents who are saving for their children’s college said they have invested in cryptocurrency.
But is it a good idea to invest in cryptocurrencies to pay for college? According to investing experts and crypto specialists, there are undoubtedly warnings given its youth, volatility, and lack of regulation.
Things to Consider Before Investing into Crypto for College Fund
Here are the things to think about if you’re considering adopting cryptocurrency to contribute to your college savings.
Sparingly Use Cryptocurrency for Payment of College Education
Since it is still a new asset, cryptocurrency is prone to extreme price fluctuations. Take note that the value of bitcoin has dropped drastically this year. Families should exercise caution while using cryptocurrency to find colleges.
Think about Cryptocurrency Tax Consequences
You must take tax liabilities into account when choosing how to pay for your college expenses because they may be significant depending on when you purchased the cryptocurrency. Imagine that you generated a significant profit on your investment in bitcoin ten years ago. You’ll have a significant tax obligation when you sell your interest.
Recognize the Student’s Time Frame
It is highly advisable for parents to be cautious about their time frames. Cryptocurrency is definitely not a good short-term investment if you have a child going to college the following year. But if you have, say, 10 years, it will probably increase significantly during that period.