If you are a Bitcoin Investor, then you are aware of the great potential of Bitcoin as an investment. But what about as a retirement account? Many investors like your retirement savings – 401(k) or IRA – lack returns over the long run due to market volatility and market collapses. This, together with the increase in life expectancy of retirees, is creating a demand for a savings plan that helps create consistent and safer income streams for the retiree. IRAs have a provision that allows them to hold stocks, but until 2016 it did not allow stocks that fluctuated in value like gold and Bitcoin. The government never saw Bitcoins as an investment instrument capable of replacing inflation-protected instruments like savings accounts, bonds, and other traditional asset classes available in an IRA. However, in 2016 this changed when the IRS ruled that virtual currencies such as Bitcoin are property, not currency. So can we use Bitcoins in our IRAs? The answer is yes!
Why you should use a Crypto IRA Account
There are several benefits to using a crypto IRA account. First, you can invest in Bitcoin without having to worry about buying, storing, and securing your Bitcoins. If you’re uncomfortable or inexperienced with trading or investing in cryptocurrencies, this is an excellent option for you. Second, you don’t have to worry about the tax consequences of selling and buying Bitcoins like you would if you were trading stocks. There are no capital gains taxes on Bitcoin transactions because it’s still an emerging asset class. Finally, if you have a 401(k), then your contribution limits are likely lower than they’d be with a self-directed IRA. A crypto IRA account allows you to make significantly higher contributions than you could through other retirement accounts.
When should I open an account?
Many people think of a crypto IRA account as being something only for the wealthy, but they’re actually quite useful for small investors as well. In fact, you don’t need to be wealthy to open an IRA — you just need to have earned income and/or money saved up. The Internal Revenue Service (IRS) has set up some pretty generous guidelines for those who qualify to have an IRA — and it doesn’t matter how much money (if any!) you have saved.
What is the minimum you can invest?
You can invest as little as $100 and as much as $100,000. Set up the investment by transferring funds from your current IRA provider or bank account.
How do I invest?
First, a crypto IRA account (also known as Digital Currency IRAs) is a self-directed account. This means that the account holder has complete control over the investments. And unlike most traditional IRAs, crypto IRA accounts don’t need to be held at a traditional bank or brokerage firm; they can be held at any number of third-party custodians approved by the IRS. The only catch is that the custodian has to be approved by a tax professional – so most crypto IRA account are set up by tax professionals who help investors make sure they stay within IRS guidelines.
So how does it work
When you open a crypto IRA account with a custodian, you’re given two unique codes: public and private. You give your public key to anyone who wants to send you money, while your private key grants you access to your funds. Anyone who has your public key but not your private key can only see how much money you have but not withdraw any of it.
Conclusion
A crypto IRA account is an excellent investment opportunity for retirement. Use it to diversify and safeguard your investment today!