You’ve built a strong, trusting relationship, decided to get married, and begun planning for your long-term goals together. Soon enough, it’s time to embark on the process of planning your shared financial future.. You begin to weigh options and think ahead with an eye towards the financial growth needed for things like purchasing a house, raising children, sending them to college, taking family vacations, retiring comfortably, buying a private island that comes with an expensive pet tiger trained to hug you, and whatever else might be on your bucket list. You likely hear lots of people tell you that it’s important to diversify your assets and invest broadly, and you probably have that one nerdy friend sporting a shirt that says “HODLGANG” who can’t shut up about cryptocurrencies. “Have you bought Cardano yet?” is his constant reprise every time you meet.
Actually, he’s not wrong. Crypto is shaping up to be an important asset which is gaining prominence and being taken seriously by the masses. As you merge and plan your finances, you would be remiss not to consider investing in crypto.
Millennials and Crypto
66% of millenials have more faith in crypto than in the stock market (Economic Times, 2021). An ambitious generation, millenials value instant gratification. In terms of investments, this means favoring assets with high returns over a relatively short duration of time. Most assets don’t yield high returns quickly, but crypto can often be an exception (although it’s also risky and volatile). Nevertheless, since its inception in 2009, Bitcoin has outperformed the traditional market every year except 2018 (Economic Times, 2021).
Here are a few more reasons why millennials and cryptocurrencies are a match made in heaven:
-Millennials are one of the most spontaneous generations yet, and tend to appreciate that cryptocurrency trading and transactions are not relegated to business hours. Crypto can be traded or invested 24/7 (Economic Times, 2021).
-Unfortunately, millennials rarely have access to a pension from their employers. Therefore, even at a young age they need to seek investments to add to their retirement portfolios. As a young generation, cryptocurrencies can be a wise investment because millennials can afford to take risks and experiment with their investments as they add to their retirement portfolios gradually over time (Economic times, 2021). Now is the time to jump on the bandwagon and investigate!
Unfortunately, some couples shy away from crypto because they don’t understand it. Learning about cryptocurrencies comes with such a wide array of new vocabulary and radically new concepts that it can feel like learning another language. But fear not! It is not necessary to become a blockchain expert in order to make wise crypto investments. Let’s take a look at some super basic crypto background info + recommendations for your first cryptocurrency investments.
Our Users and Cryptocurrencies
The millennial generation is in the midst of a budding love affair with cryptocurrencies, and Hello Prenup users (average age 34) are no exception. A sizeable proportion of our users have chosen to include cryptocurrency in their portfolios. In fact, our crypto-loving users hold an average of $264,000 in cryptocurrencies, or a median of $9,125. The high average shows that some of our users feel confident enough about their cryptocurrency holdings to invest a substantial amount of money, while the lower median evidences the fact that a large number of prenup-seekers are electing to make at least modest investments in crypto. The need to protect crypto assets is also one among many reasons you should consider a prenup.
These days, cryptocurrencies are more and more likely to be included in a well-rounded, diversified portfolio. In case you’re thinking of investing in crypto yourself, below we will explore some crypto background information + investment tips and recommendations for 2022.
A Crypto History Lesson
You know that weird kid from high school who invested in bitcoin early on, struck gold, and ended up rich in their 30’s? In all likelihood, this person probably invested in Bitcoin when it was first invented. From its inception in 2009, bitcoin gave rise to a new era of decentralized digital currencies and blockchain technology (Reiff, 2021). Crypto expert Ryan Allis (2021) defines blockchain as “a new type of database that stores its data across multiple computers instead of just one centralized computer. A ‘block’ is a collection of data and a ‘chain’ is what ties the blocks together across multiple computers.”
Why is this revolutionary? Because it is decentralized and distributed, blockchain technology provides a high level of security and a reduction in risks posed by hacking because there is no single point of failure which can be exploited by hackers (Gadgets 360, 2021). It also allows for faster transactions and increased transparency (Geroni, 2021), among other benefits.
Tips for Investing in Cryptocurrencies
-Use Weiss Ratings to evaluate your choices before making a purchase. A = potentially excellent investment; E = very weak investment (Wasik, 2018).
-Don’t invest more than 5% of your liquid assets in any one cryptocurrency, no matter how promising it appears. It’s just as important to diversify your crypto portfolio as it is to diversify your assets overall (Wasik, 2018).
-Never buy when a cryptocurrency is surging in value! Buy in small amounts when the market is at a low and keep adding to your portfolio gradually if and when a particular currency continues to fall (Wasik, 2018).
-Don’t invest exclusively in the biggest and most popular cryptocurrencies; include some newer and smaller cryptos, as well (Wasik, 2018).
-Store your crypto in your own personal self-controlled crypto wallet, not in an exchange, where it could be compromised (Wasik, 2018).
-Store your login information somewhere secure and in a location which you won’t forget. Also, share it with someone you trust (Wasik, 2018); getting locked out of your account because you forgot or lost access to some bit of crucial information is not fun and could ultimately cost you a lot of money if it happens at the wrong time.
Our Top 3 Cryptocurrencies for 2022
Check out these well-reputed cryptocurrencies for 2022., Read on to see the hottest cryptos + some background info on what makes each one unique and what you should know about it.
The world’s most famous crypto is our #1 choice–and for good reason. Bitcoin has proven itself to be a solid choice for any crypto portfolio. Despite its topsy-turvy up and down track record, the value of Bitcoin has risen to new heights time and again over time. One expert panel forecast Bitcoin to be worth $420,240 by 2030 (Park, 2022). That means if you invest now, when Bitcoin is hovering under $40,000, your money will grow 10x in the next 8 years. That’s absolutely remarkable. Of course, any investment is a risk, but Bitcoin’s potential payoff is incredible.
Here are some of the other reasons people love bitcoin, many of which also apply to other cryptocurrencies:
-Because there is a fixed amount of bitcoin that can be created (21 million bitcoins) It cannot be inflated (Allis, 2021).
-It isn’t controlled by governments (Allis, 2021).
-It cannot be taken away (Allis, 2021).
-It is decentralized; information about bitcoin transactions and ownership is stored on many different computers worldwide, rather than in the database of one particular institution. Therefore, it cannot be banned or stopped (Allis, 2021).
-It uses less energy than the banking industry and gold mining, and there are efforts in progress to get bitcoin computers running on renewable energy (Allis, 2021).
Last year, Bitcoin showcased both its potential and volatility by achieving multiple all-time highs alongside a number of steep drops. It also saw more big companies buying in (Haar, 2022). Bitcoin hit its record high last November, at $68,000. As of late April 2022, it’s back down to around $39,000 (DeMatteo, 2022), which means now may be an optimal time to invest in bitcoin. Many experts even predict that Bitcoin could reach $100,000 this year (DeMatteo, 2022).
In case you’re not convinced yet, a new study straight out of Yale suggests that an investment portfolio which holds at least 6% bitcoin is likely to yield higher returns and mitigate risk (Georgiev, 2021).
The second-largest cryptocurrency in terms of market cap (Reiff, 2020) is also our second choice. Ethereum is special because it doubles as a digital currency and a platform
for developers to build and run decentralized apps which don’t experience downtime, fraud, or third-party control. It also allows one to deploy ‘smart contracts’, which are automatically executed once conditions have been met. Ethereum can be used for a diverse array of purposes, including to store value, make payments, or as collateral (Reiff, 2020). It can even be used to earn interest or to play games (Coin Telegraph, 2021).
In addition, many promising and highly-rated crypto projects are built atop the ethereal blockchain. Like Bitcoin, Ethereum has seen incredible growth over time, with its value increasing over 32,000% (yes, you read that right) in the past 6 years (Analytics Insight, 2022).
Binance Coin (BNB)
If you haven’t heard of it, Binance is the world’s foremost crypto exchange, leading in both trade volume and number of users. They also have their own cryptocurrency.
The pros of Binance Coin is that Binance users who own Binance Coin pay less commission than other users. Binance’s native crypto asset can also be used for an array of purposes, including booking travel, investing, and payment processing. It can also be exchanged for other crypto assets. However, the value of Binance Coin has dropped substantially in the past few months. That said, many major cryptocurrencies have followed the same trajectory as of late (Analytics Insight, 2022). One Binance Coin is only $401 as of April 28th. Although this is a risky investment, it could have a real payoff in the future. If you can afford to risk $400, this might be an ideal moment to buy a Binance Coin.
Aside from these five low-risk cryptocurrencies, we also recommend reading up on non-fungible tokens with an eye towards making NFTs a part of your financial future. An NFT is another related type of digital asset which cannot be exchanged or substituted, and it is quickly gathering steam as an integral part of a digital asset portfolio.
Protecting Your Digital Assets with A Prenup
Marriage can be wonderful, and divorce is usually… awful. Protect your digital assets (and relationship!) by adding these assets to your financial schedule in your prenup. At the end of the day, it is healthier for everyone if you don’t have to debate with your spouse over who owns the binance coin when it skyrockets in value.
A prenup doesn’t only protect your digital and non-digital assets, it also helps you to lay out expectations for the management of digital assets during your long and financially secure marriage. Some individuals are better at maintaining certain assets or managing money than others. Even in a happy marriage, clearly defining who is in charge of which assets and who owns what can save you a lot of stress and arguments.
Complete financial disclosure is necessary in a prenup, so if you do own any crypto assets, make sure to include them when you disclose your finances.
We have discussed many of the positives of entering into a prenuptial agreement with your fiancé, ya know, everywhere on this website, but here is a little review:
- Protect assets
- An opportunity to discuss finances with your future spouse
- Save money and time on legal fees in the event of a divorce (hopefully you never have to deal with this!)
- Protect inheritance
Our interactive platform personalizes and streamlines the process of getting a prenup. Curious? Check out how it works.
The Bottom Line
Although we don’t advise spending your whole retirement fund on crypto as it is still a very new and volatile system (Wasik, 2018), crypto assets are rapidly growing in importance and prominence and their potential should not be overlooked. A diverse investment portfolio which includes a range of cryptocurrencies in addition to more traditional holdings is an investment in your own financial future as a couple as well as the financial future of the world. Crypto can and should be listed as an asset in the financial schedule on your prenup!
Analytics Insight. 2022. Top Cryptocurrencies to Invest 2022. Retrieved from: https://www.analyticsinsight.net/top-cryptocurrencies-to-invest-in-2022/
Allis, R. 2021. Are we at the Crypto Bottom yet? We Think so. Retrieved from: https://coinstack.substack.com/p/are-we-at-the-bottom-yet
Allis, R. 2021. Crypto: Explain it Like I’m 5. Retrieved from: https://coinstack.substack.com/p/crypto-explain-it-like-im-5
Coin Telegraph. 2021. What is Ethereum: An Explanation in Plain English. Retrieved from: https://cointelegraph.com/ethereum-for-beginners/what-is-ethereum
DeMatteo, M. 2022. Experts Say Bitcoin Could Hit $100,000 in 2022. Here’s What Investors Should Know. Retrieved from: https://time.com/nextadvisor/investing/cryptocurrency/bitcoin-price-predictions/
Economic Times (2021). 3 Reasons Why Millennials Need to Diversify Investments in Cryptocurrencies. Retrieved From: https://economictimes.indiatimes.com/markets/stocks/news/3-reasons-why-millennials-need-to-diversify-investments-in-cryptocurrencies/articleshow/80840141.cms?from=mdr
Georgiev, G. 2021. New Yale Study: Every Portfolio Should Include 6% Bitcoin (At Least). Retrieved from: https://bitcoinist.com/new-yale-study-every-portfolio-must-include-at-least-6-bitcoin/
Gadgets 360. 2021. How Secure is the Bitcoin Blockchain, and is Your Cryptocurrency Safe? Retrieved from: https://gadgets360.com/cryptocurrency/features/how-secure-is-bitcoin-blockchain-cryptocurrency-technology-2516405#:~:text=Blockchain%20technology%20is%20secure%20as,system%20cannot%20affect%20other%20parts.
Geroni, D. 2021. Top 5 Benefits of Blockchain Technology. Retrieved from https://101blockchains.com/benefits-of-blockchain-technology/
Haar, R. 2022. The Future of Cryptocurrency: 5 Experts’ Predictions After a ‘Breakthrough’ 2021. Retrieved from: https://time.com/nextadvisor/investing/cryptocurrency/future-of-cryptocurrency/
Park, D. 2022. Experts Cut Bitcoin’s 2022 Price Outlook to Slightly Less Bullish: Report. Retrieved from https://finance.yahoo.com/news/experts-cut-bitcoin-2022-price-074139919.html#:~:text=Fast%20facts,for%20April%20released%20on%20Wednesday.
Reiff, N. 2020. Bitcoin vs. Ethereum: What’s the Difference? Retrieved from: https://www.investopedia.com/articles/investing/031416/bitcoin-vs-ethereum-driven-different-purposes.asp
Reiff, N. 2021. Were There Cryptocurrencies Before Bitcoin? Retrieved from: https://www.investopedia.com/tech/were-there-cryptocurrencies-bitcoin/
Julia Rodgers is HelloPrenup’s CEO and Co-Founder. She is a Massachusetts family law attorney and true believer in the value of prenuptial agreements. HelloPrenup was created with the goal of automating the prenup process, making it more collaborative, time efficient and cost effective. Julia believes that a healthy marriage is one in which couples can openly communicate about finances and life goals. You can read more about us here Questions? Reach out to Julia directly at [email protected].