The New York Times: Buying Cryptocurrency Is Right—This Is Not Just a Passing Hype
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The New York Times: Buying Cryptocurrency Is Right—This Is Not Just a Passing Hype
Investing either generates returns or creates income. Cryptocurrencies do neither, unless you sell them for a return.
Navigating Web3 tides with focused insightsCompiled by: Mary Liu, Bitpush News
An increasing number of young people, especially men, are buying cryptocurrency—and here’s some advice (not preaching).
First, you're right—this isn't just a passing fad.
Despite entrepreneurs like Sam Bankman-Fried facing legal troubles and companies such as Binance caught in regulatory chaos, people continue to buy crypto.
Even though Bitcoin's price plummeted sharply in 2022, the share of Americans owning cryptocurrency rose from 3% to 11% within just one year. According to a working paper from the National Bureau of Economic Research (NBER), Bitcoin’s price has climbed 12% this year and is up more than 75% from its 2022 lows.
Belief in cryptocurrency—or even just curiosity—shouldn’t be dismissed by outdated personal finance dogma and scolding. It simply requires asking yourself questions about who you are and why crypto appeals to you.
Indeed, younger generations tend to be more open to this way of making money work. According to NBER research, if you’re under 40, you’re more likely to own cryptocurrency than someone over 60—and ownership skews heavily male.
The gender gap is notable. A Pew Research Center analysis released this year found that while 41% of men aged 18 to 29 said they owned or used cryptocurrency, only 16% of women in the same age group did.
“One possible explanation for the gender bias is chemistry—it’s testosterone at work,” said William Bernstein, 75. “It helps a lot with muscle mass and reflex speed, but nothing for judgment.”
Bernstein is a retired neurologist and author of *The Four Pillars of Investing*.
Are you really that smart trader? That’s not a rhetorical question. Ask the women or others around you—their judgment might be better than yours—or simply different.
Pew Research also reported that while 14% of white adults own cryptocurrency, 21% of Black or Hispanic adults do, as well as 24% of Asian American adults.
The racial wealth gap remains vast. Young people confronting economic inequality for the first time often vow to break the cycle—but any rash move could make them easier targets for influencers and celebrities pushing dubious crypto schemes.
“In America, when it comes to building wealth, people genuinely want to catch up,” said Yanely Espinal, 33. Espinal is director of educational outreach at Next Gen Personal Finance, a nonprofit focused on financial education. “So the marketed vision of crypto is: If you do this, if you take the risk, you can leap ahead financially.”
Often, crypto’s biggest appeal lies in the possibility of high returns—if a Bitcoin holder had bought in early 2019 and sold in early 2021, they’d have made ten times their investment.
But something like that may never happen again, and those who achieved such gains were likely lucky. Repeating that feat—buying and selling at exactly the right moments—would require extraordinary skill (or more realistically, odds akin to being struck by lightning twice).
Still, this article isn’t trying to tell you never to try—quite the opposite.
Consider the journey of Aadi Gujral. At 17, Gujral founded the Financial Literacy Foundation and found his way into crypto early in the pandemic. He bought Bitcoin, then jumped onto the hype train, dabbling in other coins and mining tokens.
“Sometimes it brought incredible profits,” Gujral said. “Other times I regretted every decision. Given the volatility, my money might have been safer and better off in an index fund.”
But would he have learned more from a basket of boring U.S. large-cap stocks? Developed a clearer sense of his risk tolerance? Become a better teacher to his peers? No, no, no.
Espinal, who trains educators on how to teach about crypto and authored *Make Your Money Matter*, worries about teens putting all their savings into crypto and losing everything.
“They might walk away with a bad experience, put their money in a savings account, and never want to feel that pain again,” she said. “That could turn them off investing entirely—and investing is a huge opportunity for building wealth, especially for people of color.”
Espinal’s concern is valid. Many young people watched their parents’ retirement accounts vanish overnight during the 2008 financial collapse and stayed out of the stock market for years. Yet in the heat of bull markets, avoiding them proved to be the wrong choice.
For now, few crypto owners are suffering. According to Pew Research, only 3% say trading crypto has seriously harmed their finances.
But that could change suddenly, without warning. This means you should never invest more in crypto than you can afford to lose mentally and emotionally.
William Bernstein’s grandson is already 10, and he wants to pass along one insight: The biggest mistake crypto enthusiasts make, in his view, is treating ownership as real investing. “Investing,” he says, “either produces earnings—as when you own shares in a company—or generates income, like dividends paid on stocks. Crypto does neither, unless you sell it for a gain.”
You might think of holding crypto for months or years as similar to spending time at a theater or concert—invest only what amount you believe is worth the experience. But don’t immediately dismiss older voices like Bernstein’s. As he puts it: “That’s the nature of old curmudgeons. Older people don’t pour big money into crypto not because they’re unwilling to participate, but because they’ve experienced painful losses—and know how it usually ends.”
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