Explained: How Old Do You Have To Be To Buy Crypto Legally?

Cryptocurrency has captured the attention of investors of all ages — whether it is from the recent crypto bull run or the fall of FTX. But for whatever reasons you're interested in investing in Bitcoin or Ether, you probably wonder how old you have to be to invest in crypto legally.  

Read on to figure out if you're eligible to invest in crypto. 

Age Eligibility to Buy Cryptocurrency

The age requirements for buying cryptocurrency vary from country to country. For example, the minimum age to purchase crypto in the United States is 18 years old on most crypto exchanges. However, some platforms incur a higher age restriction. 

Since most crypto exchanges require users to verify their identity before making a purchase, it is vital to comply with the platform regulations before investing. This verification process helps to prevent fraud by making sure the person who is buying or selling the cryptocurrency is who they claim to be. It is also not uncommon for exchanges to offer additional measures, such as parental controls, custodial accounts, and time limits to protect minors from accidentally buying or trading cryptocurrency.

Here's a list of the age limits for the top cryptocurrency exchange:

Can a 12-Year-Old Invest In Crypto Under Parental Consent?

A 12-year-old can invest in cryptocurrency under parental consent, but it should comply with the platform's use of services. The measures are put in place to safeguard the investment. These include:

• Requiring the parent or guardian to complete proof of identification or know-your-customer (KYC)

• Setting limits on the amount of money a minor can invest

• Requiring parental consent for any crypto transactions

• Educating children about the risks associated with investing in cryptocurrency

Also, minors should only use reputable and secure exchanges when investing in crypto. Being mindful of where you trade will help protect your assets from theft, fraud, and other security threats.

A reputable financial institution or exchange will have adequate security measures. Some of these measures that help to protect user funds include two-factor authentication, cold storage, and security protocols.

Further, reputable exchanges typically provide educational resources. These materials help minors understand the risks associated with investing in crypto and get deeper insights into the technology involved. 

Who Decides the Age Limit to Invest in Crypto?

Local laws and regulations of the country or region where the investor resides determine the age limit for investing in crypto. These age restrictions protect minors from making risky investments they may not be able to afford or understand.

In most countries, purchasing cryptocurrencies is considered illegal for individuals under 18. Some countries also restrict cryptocurrency investments for those under 21 years old.

The Securities and Exchange Commission (SEC) in the U.S. has set a minimum age limit of 18 for all investors, regardless of their financial sophistication. The SEC also requires investors to provide proof of their identity and address before creating an account with a broker-dealer or an investment advisor.

Further, brokers must ensure that all investors are adequately informed about the risks associated with investing in cryptocurrencies before they are allowed to purchase them.

In Europe, different countries have different regulations regarding crypto investments. Most European jurisdictions have set a minimum age limit of 18 for investing in cryptocurrencies. Still, some countries may have even stricter requirements depending on their specific laws and regulations.

By setting an appropriate age limit and requiring investors to provide proof of identity and address, regulators hope to create a safe environment for all crypto investors regardless of their experience level or financial sophistication.

Note: These regulations vary based on the geographical regions or areas you live in. Please check with the local authority before investing in any cryptocurrency. 

Should Minors Be Buying Bitcoin?

Minors should not be investing in the cryptocurrency markets on their own. Cryptocurrency is a highly volatile and risky investment and can result in considerable losses.

But, minors interested in investing in cryptocurrency could invest with adult supervision and guidance. An adult should be present to provide advice and monitor the investments made by a child.

If a minor decides to trade Bitcoin or other assets with parental supervision, they should do so with caution and only with funds they can afford to lose.

10 Reasons to Buy Crypto for Minors As an Early Investment

Here are some reasons for why minors can consider buying crypto for investment. Keep in mind that they can also apply to almost anyone.

1. Low barrier to entry: Crypto is an attainable asset class that anyone with an internet connection can access. All you need to do is get connected with a broker or buy crypto directly on an exchange like Bybit. 

2. High liquidity: Cryptocurrencies are highly liquid assets that can be bought and sold quickly and easily.

3. Decentralized nature: Cryptocurrency transactions do not require a third party or middleman. This feature gives you complete control over your money.

4. Low fees: Cryptocurrency transaction fees are generally much lower than fees charged by traditional payment methods. If you buy crypto on a crypto exchange, you can eradicate the broker fees and transact directly. 

5. Accessibility: Cryptocurrencies are accessible worldwide, making them ideal for international payments and remittances. As more merchants and institutions like PayPal started accepting crypto as a mode of payment, assets like Bitcoin and Ether made it a good investment for diversification than just local fiat. 

6. Security: Cryptocurrency transactions are secured through robust encryption technology. All transactions made on the blockchain are transparent and decentralized. It is comparatively more secure than traditional payment methods as altering the track record is relatively difficult. 

7. Transparency: All cryptocurrency transactions are publicly viewable on the blockchain, providing unprecedented transparency for users and businesses.

8. Growth potential: Many cryptocurrencies have seen massive growth in recent years, providing investors with the potential to make significant returns on their investments if they choose wisely and time it correctly.

9. Anonymity: Users of cryptocurrencies remain anonymous when transacting on DEXes, allowing them to maintain their privacy while still enjoying all of the benefits of digital currency technology. This feature is ideal for minors since there is no need to reveal personal information or banking details to third parties. Still, transacting on DEX is more sophisticated and requires a deeper understanding of blockchain. 

10. Increased access to global markets: By using cryptocurrency, investors have access to international markets which may otherwise not be available due to geographical restrictions or high costs for minors.

Benefits of Buying Crypto for Minors

In addition to the above reasons, there are many more benefits to buying crypto for minors:

Investing in Crypto as a Gift

The advantage of buying cryptocurrency as a gift is that the receiver can potentially use it as an investment vehicle, delivering long-term benefits.

You can also provide children with a valuable education tool, teaching them about investing, technology, and money management principles.

Last, it offers minors access to a global financial system that would otherwise be inaccessible due to age limits.

College Funds

Cryptocurrency transactions are suitable for use as college funds as they are often much cheaper than traditional payment methods.

Payments are secure and trustless, meaning there is no risk of fraud or chargebacks. You can send payments anywhere in the world in minutes, making them ideal for international students or those studying abroad.

Cryptocurrencies are highly divisible and can be used to pay for small tuition or other college expenses without incurring high-interest fees associated with traditional payment methods.

You can securely hold college funds stored in cryptocurrency over time, allowing students to benefit from the potential appreciation of the asset. This strategy safeguards against any possible currency devaluations during their college years.

Allowance/Rewards

Purchasing cryptocurrency as an allowance or reward for a minor can be a great way to teach them about the financial system and the importance of saving and investing. This introduction of financial education will help them develop better saving and spending habits in the future.

Introducing a minor to cryptocurrency, you are helping them become familiar with this new asset class and be exposed to digital money. This information could benefit them to get a better foundation for investment and prepare them for more significant investments when they're legally compliant with the rules and regulations. 

Cryptocurrency is easy to purchase and store, making it an ideal investment option for minors who may not yet have access to traditional banking services or stock markets.

As cryptocurrencies appreciate over time, holding onto these assets can also help minors build long-term wealth.

How to Buy Crypto 

First, you must find a way to store and manage your crypto after you buy it. This step is a reasonably simple task utilizing either Metamask or Ledger. Alternatively, you could store digital assets in an exchange's wallet. 

MetaMask is a digital cryptocurrency wallet that allows users to store, send, receive, and manage Ethereum-based tokens and Ether. It runs as a browser extension on Chrome, Firefox, and Brave. Metamask also allows users to interact directly with Ethereum-based decentralized applications (dApps) from the browser.

Ledger is a hardware crypto wallet allowing users to store their cryptocurrencies offline securely. It is available in two models: Ledger Nano S and Ledger Nano X. Ledger supports more than 1,100 coins and tokens, including

• Bitcoin (BTC)

• Ethereum (ETH)

• Ripple (XRP)

• EOS (EOS)

• Stellar (XLM)

• Litecoin (LTC)

• Cardano (ADA)

• Monero (XMR)

• Zcash (ZEC)

• More ERC20 tokens

The main difference between MetaMask and Ledger is that MetaMask is a software wallet while Ledger is a hardware wallet. MetaMask stores your private keys on your computer or mobile device. Ledger keeps them on the device in an isolated environment known as the Secure Element.

In addition, MetaMask only supports Ethereum-based tokens, while Ledger supports multiple coins and tokens, including Bitcoin and other altcoins. Finally, you can use MetaMask to interact with dApps, while Ledger does not have this capability.

To buy crypto for minors using Metamask or Ledger, the first step is to create a wallet. You can accomplish this by going to their website and following the instructions for creating an account.

Once you have created the account, you can fund it with cryptocurrency from an existing wallet or exchange it for the newly created wallet address.

After funding the wallet, it is time to purchase crypto for minors using MetaMask or Ledger storage. First, navigate to an exchange platform that supports buying and selling crypto assets, such as Coinbase, Binance, or Bybit and select Buy on a cryptocurrency of choice. Then, enter an amount and select Purchase when ready.

After purchasing cryptocurrencies, you should transfer them from the exchange platform into your MetaMask or Ledger storage. They will be securely stored away from potential hacks or other malicious activities on exchanges.

The last step is to secure private keys as well as passwords. This action prevents any unauthorized access to funds stored in your crypto investment account.

Disclaimer: This content is purely for educational purposes only. There is no way that Bybit encourages minors to purchase/invest in cryptocurrency. We highly encourage users to read the terms of services before investing in any digital assets. Bybit condemns all illicit activities and frauds.