Parenting in the digital age: A guide to cryptocurrencies for parents

As a parent, keeping abreast of your children's latest trends and interests can be tricky. One trend that is becoming increasingly popular among youngsters is cryptocurrency. You may have heard your child talking about investing in Bitcoin or Ethereum and wonder how to deal with it. In this blog post, we will give you tips and tricks on how best to tackle this topic so that you can make an informed decision together with your child.

Immerse yourself in crypto

Before you can have a conversation with your child about cryptocurrency, it is important to understand what it is and how it works. Cryptocurrency is basically a digital currency that operates independently of a Central Bank. Bitcoin and Ethereum are two of the best-known types of cryptocurrency.

Cryptocurrency has the potential for a high return on investment, but it also comes with risks, such as volatility and the potential for fraud. Therefore, it is crucial that you understand the potential benefits and risks associated with investing in crypto. You can do some research online or consult a financial adviser to find out more. A good place to start this research is the Knaken Academy, filled with educational content on crypto and finance.

Open conversation with your child

Once you have a basic understanding of cryptocurrency, it's time to have an open conversation with your child. Encourage your child to share his or her reasons for wanting to invest in crypto and ask questions to help them think critically about their decision. Keep in mind that it is important to have this conversation with an open mind and without judgement.

Set clear rules and boundaries

As with any investment, it is important to set clear rules and boundaries. Discuss how much money your child can invest and how often. Agree on when and how they can access their crypto wallet. Set expectations for how your child should handle their investment, including possible losses.

It is also a good idea to set some guidelines for security. Make sure your child knows the importance of keeping their password and wallet information safe. Encourage them to use a two-step verification process for added security.

Consider using a custodial service

One way to ensure your child's investment is safe is to use a custodial service, such as Knaken. A custodial service is a platform that provides extra security and monitoring for cryptocurrency investments.
A custodial service will keep your child's cryptocurrency in a secure digital wallet and provide extra protection against theft and fraud. They also offer support for questions and problems you or your child may encounter.

Check the age limit

Although cryptocurrency is open to everyone, some platforms and exchanges are restricted to people over 18 years old. Therefore, always check the age limit before your child signs up for a particular platform.

At Knaken, we can open accounts for children under 18, for which we need a permission letter from a parent or guardian. Once this is signed, the account is in the child's name. This way, you can easily keep your investments and those of your children apart. Because the account is in the child's name, no unexpected tax issues arise when the child turns 18.

Be involved, but not overprotective

As a parent, you naturally want to be involved in your children's interests, but it is also important not to be overprotective. Investing in cryptocurrency can be a learning experience for your child and can help them develop financial responsibility. Encourage them to learn and experiment with small investments, but stay alert to any problems and risks.

Conclusion

If your child is interested in buying cryptocurrency, it is important to understand what it is and how it works. Talk openly with your child about their wishes and set clear rules and boundaries to ensure the investment remains safe and responsible. Consider using a custodial service and always check the age limit of the platform. Stay involved and vigilant, but also encourage your child to learn and experiment with small investments.

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