Like many bitcoin investors, Ray Russell heard about cryptocurrencies from a friend who made money.
Investing in crypto sounded easier than how he was earning money — reselling high-end clothes on ebay. He started with a $6,000 investment to buy part of a bitcoin last December when it was priced around $15,000. Five months, and some additional investments later, he now owns eight bitcoins, worth about $70,000.
The thing that sets him apart as an investor? Ray Russell is a 17-year-old high-school junior from Maryland.
There’s still a huge debate over whether crypto is the way of the future, or a passing fad. Even as some legendary investors are calling out crypto as “rat poison” and “trading turds,” other mainstream investors are expanding and doubling down on the asset.
Young people are increasingly drawn to cryptocurrencies as a way to make easy money. But their inexperience with investing makes them even more vulnerable to an already high-risk investment.
Consequently, regulators, financial educators and parents are struggling to keep up with a dynamic and evolving investment that they may fear more than they understand.
Mom, what is bitcoin?
When Ray first asked his mother, Mia Russell, what she knew about bitcoin, she told him diplomatically: it’s an intangible asset, but there’s a lot of risk and we don’t know how it’s going to work.
“I wanted to say, ‘What in the world?! This is crazy!’ ” said Russell, a finance professional. “But I know that won’t be productive.”
Still, she’s concerned. The elder Russell noticed by looking over her son’s accounts (to which she has access) that money was going out to CoinBase, a cryptocurrency exchange. And money was coming in.
“I would say, ‘How does he have more money in his checking account than I do?'” she said.
And Mia Russell is no rube: she’s worked in finance for more than 20 years. She’s taught university level courses on personal finance and now works with a national financial institution creating money management programs.
But ask her about distributed ledger technology, and she’s a little out of her depth. When Ray talks about bitcoin, she says she feels like all her real world experience and academic training can’t provide him the answers he needs.
“I chuckle because I am relatively knowledgeable in this space and I’m challenged,” she says. “My son will joke. ‘You don’t even know about this and you have a PhD!'”
Ray says most of his knowledge has come not from adults, but from friends, websites, YouTube videos and a massive online open course on crypto.
“A lot of adults feel like bitcoin is a fraud,” he says. “And people keep telling me to sell before I lose all my money. But once you make that much money and people are telling you it’s a scam, it’s like: ‘How? I already made so much.'”