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Bitcoin and cryptocurrency in general are some of the more avant-garde forms of non-traditional investment. But did you know that that a traditional individual retirement account or IRA can involve getting bitcoin as well?
Enter the bitcoin IRA. This is a retirement account that combines a traditional investment strategy with the frontier currency of bitcoin. These five reasons to get a bitcoin IRA will help you see its benefits.
By the time most Americans get to retirement, they have only accrued about $300 a month to live on. If this is not enough for you, you need to examine your options.
One of these options could be a Bitcoin IRA, as they have a much higher earning potential in the long and short runs than a traditional IRA. According to some estimates, the price of Bitcoin could push 400,000 by 2030.
If you have an IRA incorporating Bitcoin, this means massive returns on your investment. This corresponds to higher monthly budget allotments once you break up your nest egg in retirement.
Traditional assets such as stocks and annuities fluctuate in value in direct correspondence with the value of the U.S. dollar and the value of the traditional marketplace.
These assets are heavily influenced by factors such as inflation and interest rate changes. GDP and other economic indices, as well as those inherent to a speculative marketplace also factor into total portfolio value change.
If you have all of your eggs in one basket in the form of an IRA based solely around these traditional assets, your retirement plan is inflexible and at the mercy of traditional market forces.
By incorporating bitcoin into your plan, you are diversifying your portfolio. Bitcoin is less affected by interest rate changes, GDP fluctuations, and other traditional market forces.
In fact, in times of economic turmoil, bitcoin is often seen as an alternative asset. This helps explain bitcoin's meteoric rise to the $50,000 per coin mark in 2021, even as the traditional market was thrown into turmoil by the pandemic.
Bitcoin is seen by many investors as the new "gold standard." Some view it as less of a fiat currency than the U.S. dollar because it is not influenced by the machinations of the central banking establishment.
It often goes up as the economy's total value goes down. This is because people panic and put their money into a non-traditional asset that hold's its value well during times of crisis.
By incorporating bitcoin into your retirement plan, you have an insurance policy against traditional market failure because even if your stocks, bonds, and other traditional assets go down, your bitcoin investment may go up.
Both traditional IRA's and IRA's incorporating cryptocurrency provide an investor many tax benefits. Most tax benefits are geared towards long-term investments such as retirement.
If you keep your money in an IRA for long enough, you will not need to pay taxes or fees when withdrawing it. Most IRAs allow you to withdraw your money at age 60 without any penalties.
Here is a full list of rules associated with a traditional IRA. Many of these apply to bitcoin individual retirement accounts as well.
Any interest your IRA produces will be tax-deferred as it grows. You can also write off contributions to your IRA in the year they are made.
The maximum annual contribution to an IRA for 2020 is $6,000. This bumps up to $7,000 if you are above the age of 50.
This means that you can save thousands of dollars on your taxes this year by contributing to either a traditional or bitcoin IRA. This is in the short term; in the long term, you will be saving taxes on your total investment.
One of the greatest benefits of bitcoin IRAs is that you have so many options to choose from when selecting your ideal retirement plan.
There are many different bitcoin IRA platforms, and each has its own unique set of pros and cons. Big names in the bitcoin IRA world are iTrust Capital, Regal Assets, and Blockmint, but there are many more.
You can compare and contrast all of these different options by reading our online reviews about each. That way, you will find the perfect platform to incorporate into your retirement plan.
Instead of letting a faceless hedge-fund manage all of your retirement assets, why not jump right in yourself and get your hands dirty?
Depending on the platform and investment strategies you select, bitcoin IRA's can be a much more hands-on option for investors. You can choose when you purchase bitcoin and how much to purchase.
As long as you stay below the maximum contribution of $6,000, this gives you a lot of flexibility when building your portfolio. You can follow bitcoin fluctuations yourself and choose when to pull the trigger on purchasing.
You can either do this with a more hands-off approach by setting limit orders that automatically purchase bitcoin once it drops to a certain point or by clicking the button yourself.
Either way, both options provide a much more hands-on investment approach than an index fund. Index funds troll the stock market seeking to make small dividend returns over a long period.
By selecting a bitcoin IRA, you can be the master of your destiny rather than trusting it to an investment firm or aggregate fund.
The benefits of a more decentralized economic system are clear with the meteoric rise of bitcoin in recent years. A bitcoin IRA is one of the most recent manifestations of decentralized wealth production.
Don't miss the boat by neglecting to diversify your portfolio with an asset as lucrative as bitcoin. Start a bitcoin IRA today and for all your other news and information, make sure to check out the rest of our page.
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