Bitcoin IRA

IRAs were first introduced way back in 1974. For those over 50 this might seem like just a short time ago. Yet, it’s wild to think that if our parents are in their 80s today, the IRA never figured into their lexicon until much later in life. 

Well, now we’re going to talk about another concept that we’re sure, unless you’re a clever three-year-old reading this, none of us grew up with – bitcoin. To give a quick refresher, bitcoin is a digital currency that resides on something known as a blockchain. This is atype of public ledger (all online) that calls upon cryptography to secure the transactions. The process is run on a peer-to-peer network and does not count on a central authority to regulate it. 

Getting back to your IRA, the idea is to grow it of course, and the best shot at growing anything is having a diversified pool of assets. When gold goes down for example, you’ve got blue-chip stocks rising on the other end. If your high-flying lithium stock begins to sputter, thankfully you have some solid treasury or bond investments to cushion the blow. Adding a bitcoin IRA should be thought of in these terms. Just another one of many investments that are preparing you for a comfortable retirement.

There are a handful of advantages of bitcoin as an investment. One is the supply is capped. At any given time, there will never be more than 21 million circulating about. Average transactions hovered in the 50,000 mark in 2013 and that skyrocketed to 320,000 by 2017. Another advantage is you can hold bitcoin, thus eliminating the “storage” and transaction fees of a third-part. Lastly, during any economic downturn bitcoin is not tied into the economy. So, whenbonds, stocks and savings take a hit, historically bitcoin has increased in value (an inverse relationship). 

Back in March of 2014 the IRS noted it would treat bitcoin as a commodity. This means it would be taxed in a similar manner as stocks and bonds. Typical IRAs only accept mainstream assets, so if you’d like to include bitcoin in your retirement plans then the self-directed IRA is the route to take. To set up a self-directed IRA you need to first set up an LLC for your bitcoins. A quick google search will put you on the right path. The other avenue is using folks like BitcoinIRA.com to assist. There is of course a commission involved but they like others are established entities working in this sphere. 

Whether or not you should invest in a bitcoin IRA is of course up to you. But the good news is the resources are plenty and if bitcoincontinues to grow in value, then jumping in at a pre-defined price point might be a reasonable risk to take.

To learn more about companies that can assist you in investments, take a look at Riffbuddy - Investments.