Most of the time, the IRAs we encounter are through the traditional assets–such as gold IRA. We rarely encounter IRAs that are outside this realm.
It is the very reason why a lot of people have raised their eyebrows upon hearing the term “cryptocurrency IRA.” Don’t get us wrong.
Cryptocurrency has been with us for more than decades already. We are also pretty sure that most of you have an idea how cryptocurrencies work and how you can take advantage of them.
However, the amalgamation of IRA and cryptocurrency is still a foreign concept for many. But gradually, it is slowly being introduced to numerous investors and companies.
For instance, the investment firm Regal Assets offer the mixture of cryptocurrencies and precious metals on their products.
But what exactly is a cryptocurrency IRA? And should it be something that you should consider investing? Let’s find out.
Right as of now, it is undeniable that cryptocurrency is the biggest financial trend. It overtook the world by storm, especially in the evident rise of Bitcoin and Ethereum in 2017.
The value of each of these digital currencies is now overwhelmingly big. A single Bitcoin alone can make a person escape from their financial constraints. Even up to now, there are no signs that cryptocurrencies would fail.
There are several advantages that cryptocurrencies hold.
First, it is impervious to fraud. It cannot be counterfeited and the transactions made with any cryptocurrency are not susceptible to being reversed.
Second, it can provide a means of immediate settlements with minimal or no transaction fees.
And the best of all, cryptocurrency has established a good defense against identity theft. Since there’s no need for you to use your credit card that is filled with your personal information, you are always safe on each of your transactions.
These are some of the reasons why the traction of cryptocurrencies is seemingly unstoppable. Many investors today see them as the future of the economy.
They look at these assets as a great and innovative investment vehicle, especially if you want to solidify your retirement plan.
This incessant need gave birth to cryptocurrency IRA
What Is Cryptocurrency IRA?
Essentially, cryptocurrency IRA typically falls in the hands of Bitcoin (because it is the most powerful cryptocurrency today). When you have a Bitcoin IRA, it will allow you to invest in a plethora of cryptocurrencies through the use of your retirement savings.
You can say that this particular IRA is self-directed, which means that you own the right to decide the appropriate investment move for it.
Such a feature is necessary so that you can ensure that you have the total control to whatever you want to do with the IRA.
Apparently, the cryptocurrency IRA is only offered by only a few companies and institutions–which includes Regal Assets.
Even in the United States, cryptocurrency IRA has still not yet a big topic on the financial scene.
Technically speaking, the cryptocurrency IRA will allow you to keep your traditional assets and investments. But at the same time–since it’s a self-directed IRA–you are free to engage on investments that are related to cryptocurrency.
A More Thorough Breakdown
When we are talking about the traditional Individual Retirement Account (IRA) people are entitled to secure their investments through asset classes like bonds and stocks. Money market funds are also an option here.
However, once a person opened a cryptocurrency IRA, he/ she will be able to invest in cryptocurrency assets such as Bitcoin.
But don’t get the wrong idea here. Even this particular IRA is usually called as “Bitcoin IRA,” it will still allow you to get other cryptocurrencies such Litecoin, DogeCoin, and Ethereum.
There are a lot of options that you can try, depending on how far your knowledge about cryptocurrencies is. If you are pretty updated about the price and trend of a particular cryptocurrency, you have leverage in this IRA.
At this point, it is quite important that you have custodians that will help you manage the retirement account. They should make the account open for digital currencies as an alternative form of investment.
Companies like Regal Assets can help you with that.
Is It Worth Investing?
It is undeniable anymore that cryptocurrency is one of the biggest financial hits in the decade. Riding on its wave will certainly give you economic leverage, especially if you know how to play with it.
However, this is still not an assurance that this particular investment is the only way to go. There are a lot of considerations that you have to put in mind before you acquire a cryptocurrency IRA.
For instance, despite being a huge source of wealth, cryptocurrencies are still volatile–just like traditional assets. It did well this year but it might subside after a month or two.
Therefore, it is quite crucial that you have a thorough knowledge about virtual currencies so that you know when to invest in them.
Take into account that similar withdrawal policies still apply with cryptocurrency IRA. Since it is a retirement plan, it comes with a withdrawal period at 59.5 years old. If you are planning to withdraw it an earlier period, a penalty of 10% will be incurred to you.
Because of this factor, you will have to think twice about the cryptocurrency that you need to choose. Will this particular currency will have the same value during the retirement age? You have to do a thorough analysis here.
But of course, there are advantages if you will decide to have a cryptocurrency IRA. Here are some of them:
We are all aware that traditional currencies don’t have any solid backing. It is just our trust in the system that keeps them afloat. Because of this, it is safe to say that these currencies are volatile and erratic. Their value can get low, especially if there are economic and geopolitical crises that struck a specific nation or area.
For investors that have “eyes in the future,” they have already foreseen that the traditional form of investments is heavily dependent on the value of fiat currencies. Once these fiat currencies are devalued, your traditional assets are greatly in danger.
Alternative investments like gold and cryptocurrency can solve this problem. When you have them on your portfolio, there’s a guarantee that your existing wealth will be protected from issues like inflation, recession, and economic depression.
Cryptocurrency has the same trait as precious metals. The former has a limit; it is not as infinite as other people think. The biggest cryptocurrency–Bitcoin–has a threshold of 21 million coins. Out of this limit, around 17 million have been probably mined.
Investing in cryptocurrencies today might be a brilliant move to secure your retirement plan. Despite being volatile, it has been noticed that the prices of these virtual currencies tend to increase.
For example, Bitcoin has reached an overall value of $20,000 per coin just this 2018. If things went smoothly in the long run, their prices–upon the maturity of your retirement–might exceed your expectation.
That’s something that is worth looking forward, too.
Wrapping It Up
Investing in cryptocurrencies and making them part of your portfolio is a sound investment move. Aside from precious metals like gold, these currencies have the capability to protect your traditional assets due to their increasing value.
Having a cryptocurrency IRA will help you diversify your financial portfolio, and at the same time, will open you to huge returns.
If you are planning to try this investment, you should consult the services of Regal Assets. This company is among the few certified cryptocurrency IRA traders in the United States.
They offer safe and hassle-free transactions at a very reasonable price. It is worth checking Regal Assets out.