Today’s young generation is highly skilled in using technology like computers and smartphones. They know how to find information easily. It’s no surprise that many of them are interested in cryptocurrencies, which are becoming increasingly popular.
If your child is interested in cryptocurrencies or if you want them to invest for their future, it’s important to do some research and involve them in learning about this topic. It’s widely recognized that digital assets are the future, but the market can be complex. So, the first step is to find out if people under 18 can buy bitcoin and other cryptocurrencies. Once you have that information, you can learn the appropriate way to help your child acquire their first crypto assets securely.
How to Buy Crypto Under 18
While buying cryptocurrency as a minor can be challenging due to legal restrictions, there are a few methods you can explore. Here are some alternatives to consider:
Method 1:Buying Crypto from No-KYC Crypto Exchanges
If you are new to the world of cryptocurrency, you may be wondering about KYC verification in crypto. To gain a deep understanding, I suggest you read our article about “What is KYC Verification in Crypto and Why Do Crypto Exchanges Require It?”.
No-KYC (Know Your Customer) crypto exchanges are platforms that allow users to trade cryptocurrencies without undergoing the traditional identity verification process. These exchanges typically do not require users to provide identification documents or personal information. To enhance your cryptocurrency journey, it can be advantageous to familiarize yourself with some of the best crypto exchanges without KYC.
Method 2. Custodial Accounts
Some cryptocurrency exchanges and platforms offer custodial accounts that allow minors to invest with the permission and supervision of a parent or guardian. A custodial account is essentially an account that is managed by an adult (usually a parent or guardian) on behalf of a minor. It allows the minor to invest in cryptocurrencies with the supervision and permission of the adult.
Here’s how it works:
- Research custodial account providers: Start by researching cryptocurrency exchanges or platforms that offer custodial accounts for minors. Look for reputable and trusted platforms that have a good track record in the industry.
- Choose a custodial account provider: Select the custodial account provider that meets your requirements. Consider factors such as fees, user interface, security measures, and the cryptocurrencies available for trading.
- Open the custodial account: Follow the account opening process provided by the chosen platform. This typically involves creating an account, verifying your identity as a minor, and providing necessary details such as your name, date of birth, and contact information.
- Involve a parent or guardian: Since you’re under 18, you’ll need the involvement of a parent or guardian. They will need to create their own account on the same platform and link it to your custodial account. This allows them to oversee and manage the account on your behalf.
- Deposit funds: Once the accounts are set up, the adult can deposit funds into the custodial account. This can be done using various methods, such as bank transfers or debit card payments, depending on the platform’s available options.
- Select cryptocurrencies to buy: With the funds in the custodial account, you can work together with the adult to decide which cryptocurrencies you want to invest in. For example, you might choose to buy Bitcoin, Ethereum, or other popular cryptocurrencies available on the platform.
- Execute the trades: The adult, who has control over the custodial account, will be responsible for executing the trades on your behalf. They will use the funds in the account to buy the chosen cryptocurrencies at the current market prices.
- Monitor the investments: As the investments are made, you can learn about monitoring the performance of your cryptocurrency holdings. The adult can guide you on tracking the value of your investments and understanding how the cryptocurrency market works.
It’s important to note that the adult overseeing the custodial account is responsible for managing the funds and making investment decisions. They will act as a guide and ensure that the investments are made in a responsible and secure manner.
By using a custodial account, you can start learning about cryptocurrencies and participate in the market under the supervision of a trusted adult. This way, you can gain experience and knowledge while complying with the legal restrictions that come with being under 18.
Method 3: Trust Accounts
Establishing a trust can provide a legal pathway for minors to invest in cryptocurrencies. A trust account is a legal arrangement that holds assets, such as money, property, or in this case, cryptocurrencies, on behalf of someone else. It involves three key parties: the settlor, the trustee, and the beneficiary.
- Settlor: The settlor is the person who establishes the trust. In this case, it could be a parent, guardian, or someone else who wants to create the trust account for the minor. The settlor transfers the assets, such as cryptocurrencies, into the trust.
- Trustee: The trustee is the person or entity responsible for managing the trust and its assets. They have a legal duty to act in the best interests of the beneficiary, who is the minor in this scenario. The trustee will make investment decisions, buy or sell cryptocurrencies, and manage the trust account.
- Beneficiary: The beneficiary is the person who benefits from the trust. In this case, it’s the minor. The cryptocurrencies held in the trust account are for the ultimate benefit of the minor. They will receive the benefits and returns from the investments made by the trustee.
Think of a trust account like a safe box that holds the cryptocurrencies for the minor. The trustee is the one who has the key to the safe box and manages the assets inside it, making decisions on behalf of the minor.
The purpose of setting up a trust account is to provide a legal framework for the minor to invest in cryptocurrencies. It ensures that the investments are managed responsibly and in the best interests of the minor, with oversight from a trustee.
Establishing a trust account involves legal documentation and may require the assistance of a legal professional who specializes in financial matters. They will guide you through the process, help create the necessary trust documents, and ensure compliance with the relevant laws and regulations.
Method 4: Peer-to-Peer Trading
Peer-to-peer (P2P) trading platforms connect buyers and sellers directly, eliminating the need for a centralized exchange. Minors can explore P2P platforms and engage in negotiations with trusted individuals to acquire cryptocurrencies. However, it is essential to exercise caution and verify the age restrictions on the platform before entering into any transactions.
While it’s important to note that the terms and conditions of P2P trading platforms may vary, here are some platforms that generally allow users under the age of 18 to participate:
- LocalCryptos: LocalCryptos is a P2P trading platform that facilitates the trading of Ethereum. It doesn’t have a minimum age requirement and allows users to create accounts and engage in trades without age restrictions.
- Paxful: Paxful is a popular P2P trading platform that enables users to buy and sell Bitcoin. While Paxful doesn’t have a specific age requirement, it’s important to comply with the platform’s terms of service and local regulations regarding the minimum age for cryptocurrency trading.
- Bisq: Bisq is a decentralized P2P trading platform that allows users to trade various cryptocurrencies. As a decentralized platform, it doesn’t have strict age restrictions. However, minors should still ensure compliance with their local regulations and exercise caution.
It’s important to understand that even if a P2P trading platform allows users under the age of 18, it’s crucial for minors to comply with local laws and regulations concerning cryptocurrency trading. Additionally, minors should seek guidance from a trusted adult, such as a parent or guardian, to ensure responsible participation in the cryptocurrency market.
Before using any P2P trading platform, it’s recommended to thoroughly read the platform’s terms of service, privacy policies, and community guidelines to ensure compliance and understand any potential restrictions or requirements.
Method 5: Gift Cards and Vouchers
If you are under 18 years old and want to buy cryptocurrency, one method you can consider is using gift cards or vouchers. Some platforms and services allow you to purchase gift cards or vouchers with cash, and these can be redeemed for cryptocurrencies like Bitcoin or Ethereum.
As a minor, you can either use your own money to buy these gift cards or receive them as gifts from your family or friends. The gift cards or vouchers act as a way to indirectly acquire cryptocurrencies without needing a bank account or going through traditional payment methods.
However, it’s important to note that not all platforms or services offer this option, so you should check if the platform you are using supports gift card purchases. Additionally, make sure to review the platform’s age restrictions to ensure that you meet the requirements before making any purchases.
Using gift cards or vouchers is one way for minors to enter the world of cryptocurrency, allowing them to use their own funds or receive them as gifts to acquire digital currencies.
Here are a few popular platforms that allow you to purchase gift cards or vouchers with cash:
- Paxful: Paxful is a peer-to-peer cryptocurrency marketplace where users can buy and sell cryptocurrency using various payment methods, including gift cards. You can find sellers on Paxful who accept gift cards as a form of payment, and you can trade your cash for gift cards, which can then be used to obtain cryptocurrencies.
- LocalCryptos: LocalCryptos is another peer-to-peer marketplace where users can buy and sell cryptocurrencies directly with each other. It supports various payment methods, including gift cards. You can search for sellers who are willing to accept gift cards in exchange for cryptocurrencies.
- CoinCola: CoinCola is a platform that allows users to buy and sell cryptocurrencies using various payment methods, including gift cards. They have a section specifically for gift card trading, where you can find offers from sellers who accept gift cards as payment.
Method 6: Participating in Crypto Mining
It is also possible to mine cryptocurrency if you are under 18 years old. There are no specific age restrictions that prevent minors from engaging in cryptocurrency mining. However, there are a few important considerations to keep in mind:
- Equipment and Resources: Mining cryptocurrencies requires access to suitable hardware and computational resources. Depending on the cryptocurrency you want to mine, you may need specialized mining equipment or powerful computer hardware. It’s important to assess whether you have access to the necessary equipment or resources to engage in mining.
- Energy Costs: Mining cryptocurrencies consumes a significant amount of energy, which can result in high electricity costs. It’s important to consider the impact on your household’s energy consumption and the associated costs. Discuss this with your parents or guardians and ensure they are aware of the potential increase in electricity usage.
- Legal and Regulatory Compliance: Cryptocurrency regulations vary by country and region. It’s crucial to familiarize yourself with the legal requirements and regulations in your jurisdiction. Ensure that mining is legal and compliant with any age restrictions or other regulations that may apply.
- Financial Considerations: Mining can be an investment in terms of equipment, energy costs, and ongoing maintenance. Consider the financial implications and whether you have the necessary funds to cover these expenses. Discuss this with your parents or guardians and ensure you have their support and permission.
- Education and Technical Knowledge: Mining cryptocurrencies requires technical knowledge and understanding of the mining process. As a beginner, it’s essential to educate yourself on mining concepts, hardware requirements, software setup, and operational considerations. There are online resources, tutorials, and communities that can help you learn more about mining.
Here are some useful articles you may need to understand mining:
- What Exactly Is Bitcoin Mining?
- What Hardware Do I Need To Mine Bitcoin?
- Cryptocurrencies to Mine with a PC at Home in 2024
- How to Mine Bitcoin at Home in 2024
- How to Increase Hash Rate in Mining
- What is a Mining Pool and How Does it Work?
- Top 10 Bitcoin Mining Pools in 2024
Method 7: Crypto ATMs
In some regions, there are cryptocurrency ATMs that allow users to buy cryptocurrencies using cash or debit cards. While the age restrictions may vary depending on the ATM operator, it’s worth checking if there are any ATMs near you that allow minors to purchase cryptocurrencies.
Before using a cryptocurrency ATM, you will need to have a cryptocurrency wallet set up. The ATM will typically ask for your wallet address, which is a unique identifier where the purchased cryptocurrency will be sent. You can set up a wallet beforehand by using a mobile app or an online wallet service. The good news is that you can have a cryptocurrency wallet even if you are under the age of 18. There are no specific age restrictions that prevent minors from having a cryptocurrency wallet.
A cryptocurrency wallet is a software application or a hardware device that allows you to securely store, send, and receive cryptocurrencies. Wallets are not typically age-restricted, as they are simply tools for managing your digital assets. Read our article about “How to Use Bitcoin ATM”.
In conclusion, the growing interest among today’s young generation in cryptocurrencies highlights their technological proficiency and ability to access information easily. As digital assets continue to gain popularity and recognition as the future of finance, it is crucial for parents and guardians to support and guide their children’s interest in this field. Conducting thorough research and involving them in the learning process will ensure a solid foundation in understanding the complexities of the cryptocurrency market.