Do College Savings and Cryptocurrencies Fit Well Together?

Should parents use cryptos for college savings?

Cryptocurrencies have belly-flopped in recent weeks, with prices on Bitcoin and Ethereum — the two most widely-used cryptos — plummeting.

Bitcoin has dropped about 50% of its value in the past two months and ethereum has fared worse of late, falling from $4,800 in November 2021 to $985 in June 2022.

Simultaneously, a new study shows that U.S. parents continue to pour cryptocurrency assets into household college savings accounts.

According to Intelligent, 87% of parents have invested in crypto to pay for kids’ college expenses, while 41% have $10,000 or more in crypto investments in their college funds.

There’s more . . .

-80% say they have earned money from these accounts, despite recent crashes.

– More than 50% believe these funds will cover at least half of their kids’ college costs.

– 68% of respondents say they believe it will be a more reliable long-term investment.

– 59% say they believe they can make more money with crypto than with traditional investments.

– 34% say they feel pressure not to miss out on a potential opportunity.

With cryptocurrency prices in free fall in 2022, isn’t relying on cryptos for what amounts to a long-term investment account a risky proposition?

“If you’re going to invest in crypto, you must have a strong stomach,” said Ksenia Yudina, founder at UNest, a mobile app-based investment services company in Los Angeles, Cal. “It’s highly volatile compared to other asset classes. If you look back, in 2014, it dropped 89% and in 2017, it fell 83% from its all-time high.”

Yudina believes that this downward cycle is temporary.

“If you have a time horizon of five years or more, crypto can be a great way to diversify a portfolio and help fund your child’s college education,” she said. “Over the last decade, it’s been one of the best-performing asset classes, which isn’t necessarily indicative of future returns, but it has the potential to be a transformative wealth-building tool.”

Not for the Short-Term

Even investment professionals who specialize in cryptocurrencies say that bitcoin-happy parents need to be cautious with their college funds.

“For those with shorter investment horizons or who will need to rely on their funds within a specified time, such as for a college fund or making mortgage payments, Bitcoin and other cryptocurrencies should probably only be considered for a modest portion of a diversified portfolio,” said. Jake Weiner, co-founder, and CEO of, an actively managed cryptocurrency hedge fund based in Beverly Hills, Cal. “Crypto is still an immature and highly volatile asset class, and as such, while it may increase in value significantly, it cannot be relied upon in the short-term to maintain a certain value at the time you will need.”

For parents with discretionary income and long-term investment time horizons, cryptocurrencies can be a compelling asset class to consider as part of a diversified portfolio, investment experts say.

“The reason that an increasing number of people, including parents, have been investing in crypto is primarily that they have seen the long-term price appreciations of many of the leading cryptocurrencies and are hopeful for the future,” Weiner said. “Bitcoin is the best performing asset of the past decade and still has the potential for significantly outsized returns in the future.”

“However, while I am cautiously optimistic about the potential of bitcoin and other cryptocurrencies, there are no guaranteed returns,” he added. “Nothing, especially in crypto, is certain.”

Fundamentals Firm?

Despite the asset’s recent slide in value, crypto’s underlying fundamentals remain, investment professionals say.

Michael Chauliac, president at StableHouse, an Ireland-based cryptocurrency platform, offers three reasons why parents know what they’re doing by packing their college funds with cryptos.

Increasing adoption. “We’re seeing increasing adoption from traditional financial institutional investors, merchants, and even countries,” Chauliac said.

– Regulatory focus: As with any nascent, growing industry, regulation is the genesis of mainstream adoption. “Once the regulatory framework and foundation are in place, adoption may accelerate further,” Chauliac said.

 – Use cases: Beyond their value as an investment, cryptocurrencies provide access to many financial services and other applications that typically aren’t available to many investors. “As its use cases increase, so will its adoption,” he added.

Still, Chauliac urges caution to parents who may tend to go overboard with crypto-heavy college savings strategies,

“Recent market conditions have demonstrated the importance of having the same rigorous risk management as traditional finance,” he said. “They’re universal across all asset classes, especially crypto which is inherently volatile. We believe that only with sound risk management, can one truly reap the benefits of crypto.”

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Union Capital Financial Group Ltd, registered in the British Virgin Islands, does not provide investment services inside the United States. The company only provides consulting, advisory and educational services.