College Students Get Into Crypto to Plug Financial Gap, Recent Survey Shows

A survey from Save the Student website shows that college students are now turning to cryptocurrencies to fund their expenses. The number of such scholars has tripled over the past 12 months.

However, one student warns scholars against getting into crypto and advises them to research more before investing.

Financial Crisis For Student Funding

Out of those surveyed, 75% said that they had considered dropping out of school. The reasons given were either mental health issues or the pandemic, but about 41% pinged money as the issue.

The unstable part-time job market and several parents lost their income due to the pandemic over the past year. The survey outlined that average students faced a shortfall of $340 each month. It is because maintenance loans failed to cater to the average monthly living expenses of $810.

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The most common ways to come up with more money weren’t efficient either. Some of these solutions included getting a part-time job, digging into savings, or getting help from parents. However, other methods they used to raise the money were overdrafts, gambling, selling possessions, drug trial participation, etc. Cryptocurrencies also had become a popular investment, with their prices going up even thrice in a year.

Most students mentioned that the investment interest came from social media such as posts, group chats, etc. They hopped onto the crypto boat as soon as they realized it could be a viable investment opportunity.

Young Investors Face Risks

Even though investing in cryptocurrencies has been successful for some people, there is still considerable risk. Young people need to be aware of what they are getting themselves into, after all. According to the Financial Conduct Authority (FCA), young people have a clear motive for investing in high-risk products. For instance, they crave the competition and the challenge that come with them. The thrill involved is quite attractive to them rather than saving for the future.

Cryptocurrencies are highly volatile. For example, it is common for prices to experience wild swings in a short amount of time. Investing in such a product is quite dangerous, considering that most students are using their few savings. Typically, fundamentals would support currencies. However, since cryptos are not fully functioning currencies, their fundamentals are still coming up.

Another argument is that cryptocurrencies are a hedge against fiat if they ever fail. However, if this would happen, governments and central banks would tackle the issue. Above all, they would hold tangible assets such as gold in vaults and not cryptocurrencies.

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Considering that most students are short-term investors, it is significantly risky. In the end, it just comes down to the willingness to accept both gains and losses.