With the rise of cryptocurrencies like Bitcoin and Ethereum, more and more minors under 18 want to invest in this emerging digital asset market. However, traditional crypto exchanges usually require users to be 18 or older. This raises the question of how someone under 18 can get exposure to the cryptocurrency market. In this article, we will explore some methods that allow minors to invest in crypto, as well as risks and strategies they should keep in mind.
Use custodial investment account set up by parents
The easiest way for minors to invest in cryptocurrency is to have a parent or legal guardian open a custodial investment account on their behalf. The parent maintains control of the account until the child turns 18 or 21, depending on state law. The child can then take full control of the crypto assets purchased in their name. This allows minors to get exposure to the market under adult supervision.
Leverage crypto gifting platforms
There are some crypto gifting platforms like Zap and Gifto that allow family and friends to gift minors cryptocurrency. The giver purchases crypto on the platform and sends it to the minor’s wallet address. While the crypto is controlled by the minor, the giver does need to comply with KYC regulations. This provides another simple option for minors to gain access to digital assets.
Look into DeFi protocols with no age limits
Some decentralized finance (DeFi) platforms built on public blockchains like Ethereum have no age restrictions. As long as minors can get funds into the protocol, they can interact directly with things like liquidity pools and lending markets. However, this comes with major risks like hacks, contract bugs, price volatility. Close adult supervision is still recommended.
Wait until 18 to use traditional crypto exchanges
The most beginner-friendly option is to simply wait until age 18 to directly buy and sell crypto on regulated exchanges like Coinbase, Gemini or Kraken. While less exciting, this allows minors to learn about crypto investing first and then directly control their own wallets and trading once they become a legal adult.
While investing in cryptocurrency under 18 comes with restrictions, minors and their parents do have some options to gain exposure through custodial accounts, crypto gifting platforms, and certain DeFi protocols. However, direct use of regulated crypto exchanges likely remains the simplest approach once a minor becomes a legal adult at 18.