Cryptocurrency has become one of the most talked-about investment vehicles among young people today. The allure of quick profits and financial freedom has drawn many students into the digital asset space—often without a full understanding of the risks involved. Driven by FOMO (Fear of Missing Out), some dive in impulsively, only to face losses due to poor planning and emotional decision-making.
According to Indonesia’s Commodity Futures Trading Regulatory Agency (BAPPEBTI), approximately 60% of crypto investors in the country are aged between 18 and 30. This statistic highlights a growing trend: students and young adults are increasingly engaging with digital finance. But popularity doesn’t equal safety. While crypto offers exciting opportunities, it also comes with significant volatility and risk.
In a recent episode of the podcast Financial Freedom 101 on FEB UGM’s YouTube channel, Nofie Iman Vidya Kemal, S.E., M.Sc., Ph.D.—a lecturer and researcher in finance and investment—shared valuable insights for students considering cryptocurrency investments. His guidance emphasizes education, discipline, and long-term thinking over quick wins.
Understanding Cryptocurrency
Cryptocurrency is a decentralized digital currency that operates independently of central banks or government control. It relies on blockchain technology, a distributed ledger system that ensures transparency, security, and immutability of transactions through advanced cryptography.
While crypto can function as a medium of exchange, its role as an investment asset depends on key characteristics: utility, scarcity, transferability, and potential for economic return. However, it's important to note that in countries like Indonesia, cryptocurrency is not recognized as legal tender. Instead, it’s regulated under commodity trading laws by BAPPEBTI.
In contrast, jurisdictions such as the United States and members of the European Union may classify certain cryptocurrencies as securities or digital financial assets, depending on their design and use case.
“With crypto, trust shifts from institutions to technology—specifically blockchain protocols and cryptographic systems,” explains Dr. Nofie. “But this creates a paradox: governments support innovation but don’t want national currencies undermined by unregulated digital alternatives like Bitcoin.”
Types of Crypto Assets
The crypto ecosystem is diverse, offering various asset classes beyond just Bitcoin:
- Bitcoin (BTC): The first and most well-known cryptocurrency, often considered digital gold.
- Altcoins: Alternative coins such as Ethereum (ETH), Solana (SOL), and Monero (XMR), each with unique features and use cases.
- Stablecoins: Tokens pegged to fiat currencies like the US dollar or Indonesian rupiah to minimize price volatility.
- NFTs (Non-Fungible Tokens): Digital certificates of ownership for unique items, such as art, music, or virtual real estate.
- DeFi (Decentralized Finance): Platforms enabling lending, borrowing, and earning interest without traditional financial intermediaries.
- Metaverse-integrated tokens: Used within virtual worlds for purchases and interactions.
Dr. Nofie cautions against investing heavily in metaverse-related assets at this stage, citing limited adoption and unclear long-term utility compared to more established crypto forms.
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Investing vs. Trading: Know the Difference
One of the most common misconceptions among student investors is confusing investing with trading.
- Investing focuses on long-term wealth building by selecting assets with strong fundamentals. It prioritizes risk management and patience.
- Trading, especially short-term strategies like scalping or day trading, seeks to profit from market fluctuations. It requires constant monitoring, technical analysis, and a higher tolerance for risk.
“Many people claim they’re traders,” says Dr. Nofie, “but when prices drop, they suddenly say they’re ‘holding for the long term.’ That inconsistency reveals emotional decision-making rather than strategy.”
Understanding your goals—and sticking to them—is crucial for success in any financial market.
How to Make Money from Cryptocurrency
There are multiple ways to generate returns from crypto. Each method varies in complexity, risk level, and required expertise.
1. Mining
Early adopters earned crypto by mining—using computing power to validate transactions. However, rising energy costs and industrial-scale operations have made individual mining less profitable.
2. Trading & Scalping
Buy low, sell high. Scalping involves rapid trades with small profit margins, relying on high volume and precision timing.
3. Staking
By locking up crypto assets in a network (e.g., Ethereum 2.0), users earn rewards for helping secure the blockchain—a form of passive income.
4. Yield Farming (via DeFi)
More aggressive than staking, yield farming involves lending assets on decentralized platforms for higher returns—but with greater smart contract and platform risks.
5. Whale Watching
Monitoring large transactions ("whales") can provide clues about market sentiment and potential price movements.
6. Arbitrage
Exploiting price differences across exchanges—though typically automated due to speed requirements.
7. Early-Stage Investments (ICOs/IDOs)
Participating in Initial Coin Offerings or Decentralized Exchange Offerings can yield high returns—if the project succeeds. Due diligence is essential: review whitepapers, team credibility, and roadmap viability.
8. NFT Flipping
Buying and reselling NFTs with cultural or community value can be lucrative, especially for those with niche market knowledge or influencer reach.
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Risks Involved in Crypto Investing
No investment is without risk—and crypto is no exception.
Psychological Risks: FOMO, overconfidence, and herd mentality often lead to poor decisions.
Liquidity Risk: Not all tokens can be easily sold; some have low trading volumes or are listed on few exchanges.
Fraud & Scams: The low barrier to creating new tokens means many projects lack real utility—some are outright Ponzi schemes.
Systemic Risks: Global events like pandemics, wars, or economic downturns affect crypto markets just like traditional ones.
Regulatory Uncertainty: Governments may impose bans or restrictions overnight—as seen in China’s repeated crackdowns on mining and trading.
Inflation Impact: While some view crypto as an inflation hedge, its high volatility limits this function in practice.
Practical Tips for Student Investors
Dr. Nofie offers actionable advice for students interested in entering the space:
- Educate Yourself First
Understand how blockchain works, what differentiates various crypto types, and how markets operate. - Avoid Emotional Decisions
Don’t let hype or fear dictate your moves. Stick to a plan based on research. - Build a Personal Edge
Whether it’s coding skills, community access, or analytical ability—develop an advantage. - Start Small and Scale Gradually
Begin with simple strategies like scalping to learn market dynamics before advancing to staking or DeFi. - Use This Time Wisely
As a student, you likely have more flexibility and fewer financial responsibilities—making it the perfect time to experiment and learn from mistakes.
“Not everyone needs to invest in crypto,” Dr. Nofie reminds us. “But if you choose to, do so with awareness, discipline, and patience.”
Frequently Asked Questions (FAQ)
Q: Is cryptocurrency legal for students to invest in?
A: In many countries, including Indonesia, crypto trading is legal under regulatory oversight (e.g., BAPPEBTI). However, it's not considered legal tender. Always check local regulations before investing.
Q: How much money should I start with?
A: Start small—only invest what you can afford to lose. Many platforms allow purchases starting from just a few dollars.
Q: Can I lose all my money investing in crypto?
A: Yes. Due to extreme volatility and scams, some assets can lose value rapidly. Diversification and research help reduce risk.
Q: Do I need technical knowledge to get started?
A: Basic understanding helps, but many user-friendly apps simplify buying, selling, and storing crypto securely.
Q: Is now a good time to invest in crypto?
A: Timing the market is difficult. A better approach is dollar-cost averaging—investing fixed amounts regularly regardless of price.
Q: What’s the safest way for beginners to start?
A: Begin with reputable cryptocurrencies like Bitcoin or Ethereum through regulated platforms, avoid leverage, and prioritize security (e.g., two-factor authentication).
Final Thoughts
Cryptocurrency presents both opportunity and challenge for student investors. With proper education, emotional discipline, and strategic planning, it can be a powerful tool for financial growth. But without caution, it can lead to significant losses.
This stage of life—marked by curiosity, flexibility, and lower financial pressure—is ideal for learning about digital assets. Use it wisely. Focus on building knowledge before capital. And remember: sustainable wealth comes not from luck, but from informed decisions over time.
👉 Take control of your financial future—start your crypto journey the smart way today.