Parents Ditch Traditional College Savings Plans for Bitcoin

Reports indicate that a growing number of parents in the US are shifting from traditional 529 college savings plans to Bitcoin.

This move is driven by Bitcoin’s impressive historical price growth, which has outpaced more conventional investment vehicles like stocks.

Many parents see Bitcoin as a hedge against inflation and economic uncertainty, believing in its long-term value preservation despite its volatility.

While some view Bitcoin as a diversification tool rather than a complete replacement for 529 plans, they remain confident that their children will have ample time to weather market fluctuations before accessing funds for tuition.

Rajat Soni, a popular financier on X (formerly known as Twitter), wrote:

“If you’re saving for your kids, add Bitcoin to the portfolio. Buying $10-$100 of Bitcoin per month over 18 years will set your kids up for an excellent life. It will massively outperform the rest of the portfolio.”

Bitcoin’s recent performance, including a record high of nearly $110,000 earlier this year—up 500% from its 2022 low—has bolstered investor confidence, though BTC has since dipped to $93,707.59, marking a 6.85% drop in 24 hours and 7.20% over the past week.

However, opting for Bitcoin over a 529 plan comes with trade-offs.

While Bitcoin offers the potential for significant returns, parents who choose cryptocurrency for college savings forgo the tax advantages of 529 plans, which offer tax-free withdrawals for educational expenses.

Rising Institutional and Political Endorsement of BTC

Bitcoin's adoption is increasingly extending beyond individual investors.

Over the past year, institutional interest has surged, with more than 70 publicly traded companies now holding over 600,000 BTC.

This growing accumulation underscores confidence in Bitcoin's long-term value and its potential as a store of wealth.

In parallel, Bitcoin's rise has been fuelled by political shifts, notably US President Donald Trump's transformation from a crypto sceptic to a pro-Bitcoin advocate.

His proposal for a Bitcoin stockpile has sparked global attention, with countries such as the Czech Republic and Hong Kong also considering Bitcoin reserves.

Market experts view these developments as a natural progression, given Bitcoin's key attributes.

Its decentralised nature, fixed supply, and global accessibility make it an appealing alternative to traditional assets.

Travis Kling, founder of Ikigai Asset Management, has highlighted Bitcoin’s role as a safeguard against central bank mismanagement, noting its capacity to absorb a significant portion of global money supply growth.

Despite Bitcoin's current volatility, Kling predicts it will become more stable and widely accepted over the next decade.

By 2035, he envisions Bitcoin's market capitalisation reaching $15 trillion, with an annual trading volume of $200 trillion, potentially positioning it as superior collateral to traditional assets like US Treasury bonds.