Can You Buy Crypto Under 18? A Guide to Investing in Cryptocurrency as a Minor

Can You Buy Crypto Under 18? A Guide to Investing in Cryptocurrency as a Minor

Young people have had an interest in cryptos since they emerged. Interestingly, some of the first crypto miners were teens, and many big investors in digital assets were under 18 when they bought their first crypto investments.

However, can you buy crypto under 18? While there is no minimum age requirement for owning digital currencies, some of the most significant currency exchanges have a minimum age and request verification through the KYC process.

Here’s a guide to investing in cryptocurrency as a minor, including legal considerations, researching the best digital assets, finding exchanges, setting up an account, and getting started.

Age Restrictions for Buying Crypto

Countries and regions have laws determining the minimum age allowed for crypto investors buying from crypto platforms. The minimal age is meant to protect young investors from making risky investments they cannot understand or can’t afford.

Most countries, including the U.S., have set the minimum age for buying cryptos at 18. Some countries are even stricter, having set the restriction at 21.

The American Securities and Exchange Commission (SEC) sets a minimum age limit of 18, even if young investors have financial knowledge. Investors must provide identity and address proof to create an investment account with a broker-dealer or consultant. Brokers and investment consultants must inform their clients of the risks associated with cryptos before they can purchase digital assets.

The aim of regulators globally is to provide a safer environment for all crypto investors in these volatile investments.

However, besides these restrictions on the crypto exchanges, technically, there are no age restrictions for mining or trading in cryptos.

Buying Cryptocurrency as a Minor

As a minor, cryptocurrency investments can hold several benefits. Like all investments, it does carry risk since cryptos are volatile, but they have a place in any balanced portfolio thanks to their long-term performance.

Here are some of the reasons for minors to consider investing in cryptos:

  • Low entry barrier: Anyone with an internet connection can access these crypto assets by connecting with an exchange or crypto broker.
  • Ease of liquidity: You can buy and sell crypto assets easily and quickly.
  • Decentralized: The decentralized nature of crypto transactions means they don’t rely on an intermediary, giving you complete control over your investment.
  • Low transaction fees: Cryptos have much lower transaction fees than most traditional payment platforms. When buying digital assets on a crypto exchange, you transact directly, meaning you don’t pay broker fees.
  • Global accessibility: Cryptocurrencies are accessible worldwide thanks to their digital nature and can be used globally for payments. Merchants and payment systems like PayPal accept cryptos as a payment mode.
  • Secure transactions: The blockchain is an encrypted network that provides secure cryptocurrency transactions that are decentralized and transparent. The encryption technology makes it extremely difficult to erase the track record of transactions.
  • Transparency: Any transactions on the blockchain are viewable and verifiable, providing excellent clarity.
  • Asset growth potential: Even though they are volatile, some cryptocurrencies have performed well in the past when compared to other investments. However, past performances are not a good indicator of how these may perform in the future, and young investors must consider several factors before buying them.
  • Anonymity: When transacting on digital exchanges, users remain anonymous, helping to protect their personal and banking details from falling into the wrong hands.
  • Easier access to global markets: Because of several restrictions, young investors have very few ways of experiencing trading on international markets. With cryptos, they gain access to these.

Is it Legal to Purchase Crypto Under 18?

As you prepare to venture into cryptos, you should understand the legal implications of owning digital assets. Can you buy crypto under 18, and is it legal?

First, the legal age to enter into financial contracts and transactions varies according to your country or state. In most countries, you are a minor if you are under 18, meaning you probably need permission or assistance from a parent or legal guardian to buy and invest in cryptos.

Different age restrictions mean it’s vital to understand the law in your country before participating in crypto investments.

Cryptocurrency exchanges must verify the identity of their users in adherence to laws against money laundering, so they implement a process called Know Your Customer (KYC) in the U.S. When joining an exchange, they will ask you for personal information, ID, and address proof. They may even request proof of income.

If the exchange you want to join requires that you are of legal age, you won’t be able to join. Some exchanges will allow you to create an account as a minor if you have parental consent proven by documentation. In this exciting article from Young and the Invested, find information about the different types of crypto accounts to consider if you are under 18.

Finally, it would help if you remembered that the laws on crypto taxation are not the same in all countries. Read about the tax regulations in your country to ensure you remain compliant when withdrawing profits from your crypto investments.

Understanding Age Limits in Crypto Transactions

Teens and adults must know that investing in cryptos is risky since they are speculative. Therefore, investing carefully is essential and should preferably be done under adult supervision.

The age limit of 18 in most countries is meant to protect you from losing your savings since you may not fully understand how cryptos work.

You must understand the basic risks of trading in cryptos:

1.     They are volatile

As a relatively new asset class, cryptos’ value rises and falls according to demand and other circumstances. Their volatility can easily see prices dropping substantially, meaning you can lose a considerable chunk of your investment, in some cases all of it. Therefore, never investing more than you are prepared to lose is crucial.

2.     Regulatory Uncertainty

Unlike other asset classes, cryptos are still mostly unregulated. Governments are considering how to proceed with regulations, and some have banned them altogether. Others are considering restricting their use. Therefore, as rules start to fall in place, you can expect them to affect the value of your crypto investments.

3.     Hacks and Scams

Encryption within the blockchain keeps cryptos secured, but several hacks and scams have resulted in huge losses.

Exploring Options for Underage Crypto Investors

Can you buy crypto under 18? Yes, there are ways to buy it. However, we have established that even though digital currencies are popular among young people, they also carry inherent risks.

Cryptocurrencies are very volatile, meaning you will see dramatic price fluctuations. There is also a risk that you could lose all the money you invested. Therefore, you must only invest an amount you can afford to lose.

Let’s explore some more options for underage crypto investors:

1.     Trading Peer-to-Peer (P2P)

With a parent or another trusted family member or friend over the legal age, you could consider buying and selling cryptos on a peer-to-peer trading platform. On these P2P trading platforms, you can buy or sell cryptocurrencies directly from others. However, the legal age requirement applies to the person enabling the transaction.

2.     Mining cryptocurrency:

Another option is to use crypto mining instead of directly investing in them. For mining, you solve complex mathematical problems using computational power to add cryptos to the blockchain. Depending on the cryptocurrency you mine, you could need basic computer hardware or more sophisticated systems. However, crypto mining is not cheap because it’s resource-intensive. Before starting, research the costs and technical requirements.

  1. Simulated trading

Simulated trading is a good alternative if you are not old enough to invest in cryptos directly. One of the great things about simulated trading platforms is that you gain investment skills and experience as you trade in virtual currencies without using actual money.

Navigating the World of Crypto for Teenagers

As a young investor in cryptos, there are several things you can learn. These include the following:

  • Improving your financial literacy
  • Start investing toward your future
  • Start to learn about blockchain technology

Once you have mastered how savings work by putting the money from your piggy bank into a bank account that gives you interest, cryptos can prove a fantastic way to learn about other investment classes. Their potential to shrink as suddenly as they grow can give you a good idea of how high-risk investments work.

There are several ways to learn more about cryptos before investing some of your savings. Besides online blogs dedicated to learning more about digital currencies, you can also learn more by playing games on crypto apps to help you improve your financial literacy.

Once you know more about cryptos, the younger you can invest in them, the better your chances of seeing substantial growth with time. However, it’s worth noting that cryptocurrencies have no guarantees due to their volatile nature and future regulatory measures.

How to Invest in Cryptocurrency if You’re Underage

If you are underage, here’s how you can invest in cryptocurrency:

1.     Crypto Custodial Account

With a custodial account, your parents or guardians can open an account on your behalf. Your parents can invest for you, but the cryptos are in your name. Once you reach the age of majority, you have complete control of the account.

One example is EarlyBird, one of the first custodial accounts offering crypto investing with other traditional investing. Other custodial accounts that allow parents to establish accounts for the under-18s are Flyte, Stack, and Onu. You can read more about crypto custodial accounts in this informative blog on buying cryptos before you turn 18 from Teenvestor.

2.     Crypto Apps

People under 18 can buy, sell, or earn cryptos from some crypto apps. Step Visa Card was created for teens. It has a finance where you can buy and sell Bitcoin. Your parents must sponsor you to get the account, and then you can use the card to buy things in stores that accept Visa.

3.     Decentralized Exchange

Decentralized crypto exchanges process their transactions directly on the blockchain without age limits because they are unregulated. Therefore, if you are under 18, you can connect your digital wallet to these exchanges and trade cryptos. One drawback is that these exchanges don’t trade in normal currencies, meaning you can only trade with cryptos in your digital wallet.

Tips for Young Investors in the Crypto Market

As an underage crypto investor, you need to research two critical things. These are the types of cryptos you want to invest in and a trustworthy cryptocurrency exchange that will facilitate your trading.

Here are the most important things to research before deciding on a crypto platform:

  • Reputation: Many exchanges exist, but you want one with a good track record. You can find information online about which crypto platforms have experienced significant security breaches and avoid them. Furthermore, you want the exchange to have as many security measures as possible, especially two-way authentication and insurance coverage.
  • Selection of cryptocurrencies: Once you have decided which crypto you want to invest in, you must ensure the crypto exchange you choose supports it. Some have a more limited selection of cryptos than others.
  • User experience: The best crypto platforms provide a user-friendly experience, clear instructions, and intuitive navigation, making it easy for learners and experienced users to transact.
  • Liquidity: The more liquidity an exchange has, the easier it is to trade. A low-liquidity platform can experience extreme price fluctuations (especially drops) during your most crucial trades.
  • Compare fees and trading options: Thanks to the internet, it’s easy to compare the fees charged by the various exchanges before deciding on one that’s competitive. Trading options are also important. Check for limit orders, market orders, and stop-loss orders.
  • Compliance with regulations: Ensure the exchange you choose works within the legal framework of your country or region.
  • Customer support: If you have issues, you want a crypto exchange with good customer support. Therefore, check which platform has a responsive one. Avoid exchanges without it.
  • Mobile App: An exchange with a mobile app allows you to make investments or check on them anytime, even if you aren’t home.


Expanding Your Crypto Horizons: Additional Considerations for Minor Investors

Entering the world of cryptocurrency is like stepping into a new frontier. It’s an exciting realm filled with opportunities and risks alike. As a minor, navigating this domain requires a blend of curiosity, education, and guidance. The ensuing sections delve deeper into facets beyond the basic mechanics of crypto investments, shedding light on the broader considerations essential for underage investors eyeing the crypto sphere. Here’s a roadmap to refining your crypto journey, ensuring it’s well-rounded, informed, and safe.

Engaging with Family: A Step Towards Mutual Understanding

Every venture into the unknown, especially one as complex as cryptocurrency, is better undertaken with the support and understanding of your family. Here’s how you can bridge the crypto knowledge gap and foster a supportive environment:

Community Learning: Broadening Your Crypto Knowledge

Learning is a treasure, and the community is your map when it comes to understanding cryptocurrencies. Dive into the vast ocean of collective knowledge, experiences, and insights that crypto communities offer:

Educational Escapades: Structured Learning Pathways

Structured learning pathways offer a step-by-step journey through the intricacies of cryptocurrency. Embark on an educational escapade that demystifies blockchain and the world of digital assets:

Realistic Expectations: Navigating Crypto Realities

A balanced perspective is your compass in the unpredictable waters of cryptocurrency investments. Setting realistic expectations will anchor your journey, ensuring you remain steadfast amidst the crypto storms:

Cyber Safety: Fortifying Your Digital Footprints

In the digital realm, safety is paramount. As you traverse the crypto pathways, ensure your digital footprints are fortified against the lurking shadows of online threats:

Financial Advisory: Guided Financial Voyages

A seasoned guide can unveil the obscured paths in your financial voyage. Seeking advice from savvy financial advisors can illuminate your way, making your crypto journey well-informed and compliant:

Legal Labyrinth: Navigating the Regulatory Maze

The realm of cryptocurrency is enshrouded in a complex maze of legal frameworks. Navigating through this labyrinth with a clear understanding of the legalities involved is crucial for a compliant crypto venture:

Reflective Ruminations: Evolving Your Crypto Strategy

As the crypto landscapes shift, so should your strategies. Reflective ruminations on your crypto journey so far will unveil insights, aiding in fine-tuning your path ahead: