I would definitely recommend including BTC to your children's portfolios. I do wish it were easier right now to manage their 'total' portfolio in one account - but for now, we will have to make due and manually reconcile their traditional securities portfolio and digital portfolio.
I would by no mean recommend "all eggs in one basket", more so for older persons than children as we have a reduced inherited risk tolerance the older we get. But, a diversified portfolio should these days include crypto.
The traditional rule of thumb in portfolio management is to subtract the investors age from 100 - that represents the split of bonds vs equity (30 year old would have 70% stock and 30% bond).
The modern model should be subtract age from 100, then the age is their bond holdings, the remaining equity structure (the remainder of their age) should be 1/3 crypto and 2/3 traditional securities (traditional securities should be diversified across multiple asset classes of course). We could diversify cryptos as well (some BTH, ETH, LTC, AltCoin, ICOs...).
Then naturally, rebalance 1-2 times per year.
Point of this, I would absolutely recommend holding cryptocurrency for your kids.
You may be surprised that before long, they know this stuff better than you do.