25 January 2021
As cryptocurrencies continue to gain impressive traction across the world and experience more widespread adoption, many have begun looking at the digital asset as an effective investment model. While traditional stocks, varying interest rates, and static assets gradually became more problematic, heavily taxed, and exhibited poor returns, cryptocurrencies have only improved in status and value.
Over the past ten years, cryptocurrencies have seen major growth in value; and while gold is typically the asset with a solid track record of holding strong in the global equities
market, Bitcoin has built a comparable reputation for itself as a safe-haven asset. It is safe to say that over the past few years, Bitcoin has gained a leveraged position in the market. Additionally, in July 2020, cryptocurrencies became increasingly correlated with the S&P 500, Wall Street’s equity index, and other global stock markets.
With major banks and financial institutions publicly backing Bitcoin and cryptocurrencies either by way of policy or action, crypto got a huge vote of confidence from the financial sector. For example, investment banking giant Goldman Sachs reportedly began exploring the possibility of establishing a cryptocurrency trading desk, while the multinational investment bank HSBC shifted $20 billion worth of assets into a blockchain-based platform.
Most notably, a leaked report from Wall Street giant Citibank revealed that a senior analyst at the firm estimates that Bitcoin could possibly hit $318,000 by December
2021, branding it “21st century gold” causing huge waves in the crypto world. It is clear that cryptocurrencies are on the cusp of widespread adoption.
As it stands, the possibilities of benefitting from crypto appear to be endless with many turning to the digital dollar for creating hefty college saving plans for their kids. Today,
and with the unavoidable appeal of crypto, more and more parents are opting to buy Bitcoin as an alternative form of a college plan in the hopes for more lucrative gains.
Given the fact that cryptocurrencies generate high returns on investments and have proven to be a solid asset throughout periods of economic distress (such as the global COVID-19 pandemic), crypto can be a fantastic way to pay for college. With a few
simple steps, you can invest in cryptocurrencies as part of your college expense plan. Here is how!
While many people drown under the weight of student loans for years after graduation, suffering excruciating interest rates, some are lucky enough to set up college funds to make for easier landing. There are two main types of 529 plans: individual accounts and custodial accounts. The first is funded by individuals (parents, grandparents, or any relatives), while the second is funded by a custodial bank or brokerage account.
After determining the type of 529 plan to undertake, it is as simple as completing an application with your bank details and social security number, then funding the plan and choosing the appropriate investments to keep it growing. In the past it was recommended that parents contribute $2,000 per year to every child’s 529 plan, which would create a sound educational savings plan. These types of plans are attractive due
to them being tax-advantaged.
A Yale study recommends that every financial portfolio should include 6% Bitcoin. The study indicates that this percentage of diversification is ideal enough for skeptics to maintain their other assets, but significant enough for them to see proper returns on their investments. You can then opt to periodically use these gains to cash out and invest in a 529 plan at increments of your choosing.
Setting up a wallet is fairly straight forward and will allow you to purchase, trade, and hold various types of cryptocurrencies. With financial analysts projecting significant growths in crypto’s future, buying and holding can be a great way to generate passive income that is periodically sold and transferred into a static educational fund.
A few altcoins (cryptocurrencies that are not Bitcoin) that offer dividends on ownership include Tezos (XTZ), Cosmos (ATOM), VeChain (VET), NEO (NEO), Tron (TRX), and Ontology (ONT). In this case, you make an initial investment to purchase these types of coins and hold them until dividends are issued. You can then simply use the dividend income to place some additional cash in your pocket or deposit it in a 529 plan (or any other plan you desire).
In order to maximize your wins from cryptocurrencies, it is important to learn as much as possible about Bitcoin. You can check out our full step-by-step overview of “Getting Started in Bitcoin & Crypto” video course, as well as the live coaching options that we have available through our memberships.