Tag: IRA

Bitcoin IRA | Crypto: To Invest or Not to Invest

Crypto: To Invest or Not to Invest | Bitcoin IRA

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Cryptocurrency investing has become a hot topic over the last five years, and because of how its popularity has risen, long-term investors could worry that cryptocurrency investing may seem like the wild west of finance. One thing we can say is that it’s starting to appear that crypto  is here to stay.

 

What Makes Cryptocurrencies a Good Investment?

First and foremost, cryptocurrencies are starting to gain recognition and acceptance from more people, businesses, and institutions. In addition, central banks (worldwide) are also working on digital coins of their own. So, the digitization of everything money-related is on the horizon.

Consider this: investing in cryptocurrencies is a great way to diversify your currentfiat-based portfolio—especially your retirement portfolio—as you become an early adopter ofcrypto trading, relative to the rest of the world.

The recent attention drawn to cryptocurrencies has piqued the interest of regulators, and there are legal off-the-blockchain products available in which to invest. For example, there are CME hosts bitcoin futures products, and there are also many cryptocurrency ETFs for investment as well. In addition to these investment platforms, people are also looking into their retirement accounts, including their IRA and 401(k) accounts, for cryptocurrency investing due to potential associated tax advantages.

Pros of cryptocurrency investing:

  • It can help you diversify your retirement portfolio
  • Crypto is becoming more widely accepted
  • Potential for high scale with long-term investments

Are Cryptocurrencies Risky?

The most widely talked about risk associated with well-known cryptocurrency names is its volatility. While the broader market is experiencing  a good amount of unpredictability at the moment, cryptocurrencies tend to have wider price swings (on a daily basis) than some of the more popular stocks and ETFs.

Additional concerns of cryptocurrency investing tend to vary upon each individual investor. It’s important to note that not every coin will yield 1000% returns, as many are coming to realize. Like the threat of any stock, cryptocurrencies may experience hype before becoming vaporized when a significant player sells at the top, regardless of the project’s validity behind the coin.

So, simply opening a wallet and buying coins at random may not be a viable strategy. That said, smart investors wouldn’t necessarily do that with stocks, real estate or other types of investments either.

Risks of investing in cryptocurrencies:

  • Cryptocurrencies, on average, tend to be driven by speculation
  • Going into cryptocurrency investing with outlandish expectations may not always result in outlandish gains
  • Many invest in projects without doing their due diligence nor the proper research

Is Cryptocurrency a Good Investment?

Yes, it can be if the right strategy and due diligence are employed. It’s highly recommended for cryptocurrency investors to take the time and make the effort to educate themselves and do their research. This way, they can be better equipped to make thoroughly thought-out investment decisions to diversify their portfolio. Doing this gives them the potential to fare well with cryptocurrency investing.

As always, the use of risk parameters that are appropriate for your portfolio while taking advantage of these technologically innovative high-growth assets is highly recommended. BitcoinIRA offers a range of self-directed IRA options along with easy solutions for converting your fiat into crypto, all with just a few clicks via their mobile app or on their website.

Questions on getting started with cryptocurrency investing in your Bitcoin IRA account? Our specialists are here to help! Call us at 877-947-4125 or email us today.

Recommended article: Bitcoin vs Stocks

What Is The Halvening?

Here’s How Bitcoin Can Help The Economic Recovery from Coronavirus

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The coronavirus (COVID-19) pandemic has rattled the global economy. In March 2020 alone, over ten million Americans filed for unemployment, and global stocks saw a downturn of at least 25%. Along with the immediate and devastating impacts, the economic recovery to follow will be lengthy, potentially lasting years.  Even as economies slowly reopen, there will be a lasting impact on consumer behavior until a vaccine is widely available, pointing to a slow road ahead.

This leaves consumers in a difficult position during this recovery process, unsure of where their money is safest while the economy crawls back toward its pre-crisis health. Widespread recovery efforts taking place around the globe will have an impact, and adoption of cryptocurrency like Bitcoin is a small piece of that puzzle. Governments will continue scrambling to keep their economies from collapsing as savvy consumers look for ways to shield their investments from the long-term impact.

Bitcoin Is Sounder Money Than US Dollars

Bitcoin’s importance in the recovery is marked by its stark contrast to the U.S. dollar in its structure. Bitcoin was created as a decentralized currency, built to withstand an economic crisis and hold value. Additionally, its ideation in 2008 was a response to the Great Recession, as investors became wary of putting too much trust in the stock market.

With a cap of 21 million bitcoins to ever be in circulation, it has a significant advantage over traditional currency, which is consistently printing new bills. Additionally, Bitcoin’s rate of supply was cut in half in 2020, lowering the rate of inflation to 1.8%. Meanwhile, large coronavirus stimulus packages will continue to increase inflation of the U.S. dollar.

Bitcoin vs. Stock Performance

Because of this clear difference in how these monetary assets operate, it’s no surprise that a global crisis does not have a uniform effect. While most asset classes took a dive in March of 2020, Bitcoin’s recovery was rather quick compared to the S&P 500. By the end of April, Bitcoin was trading above $8,000 and topped both the dollar and stocks on current-year gains.

Source: MarketWatch (as of May 30)

Additionally, Bitcoin IRA’s internal data has shown record transaction volume in 2020—a trend which has continued throughout the crisis. While investors are selling off other assets, they’re looking at buying into cryptocurrency.

Long-Term Data Trends

Additionally, it’s important to focus on long-term trends as well. This recovery cannot be analyzed with only a few months of data, as it will be ongoing for years to come. After all, devaluation of money does not happen overnight, but over the course of a long period of time. Looking below at decades of economic crises, the Federal Reserve’s money stock, as measured by M2, has more than doubled since 2008.

source

Meanwhile, Bitcoin was designed to hedge against the unbridled printing of money with a steady rate of supply that is cut on half every four years, in an event known as the “halving.” With this regular schedule independent of the stock market or the economy, as well as a total cap of 21 million bitcoins, the supply chart looks much different, and it is predictable for decades to come:

source

Global Acceptance of Cryptocurrency

Based on the available long-term data, investors can see the night and day differences in their options—and all over the world, consumers are turning to decentralized cryptocurrency with growing distrust of centralized government currency and large financial institutions.

In fact, demand is getting so high that countries who previously outlawed or banned cryptocurrency trading are changing their tunes. Thanks to new Anti-Money Laundering framework, governments are more equipped to properly handle cryptocurrency. Among the recent shifts, France, Germany, India, Zimbabwe, and South Korea have all made moves toward accepting cryptocurrency as a legal tender.

Increased Awareness Means Increased Opportunity

With these shifts taking place, Bitcoin and other cryptocurrencies will play a critical role in the economic recovery. With increasing demand and global acceptance, awareness and accessibility to cryptocurrency will increase exponentially. As a result, cryptocurrency becoming more mainstream means that it will no longer be on the outskirts of the conversation; it will likely be a viable, stable, and accessible solution for any investor looking for options outside of the stock market.

The bitcoin ira logo sits on a field of white

Bitcoin IRA™ Now Offers Advanced Biometric Security For Its 24/7 Self-Trading IRA Platform

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The new technology enhances client identity verification before performing self-trades on its platform.

LOS ANGELES, Sept. 4, 2019 /PRNewswire/ — Bitcoin IRA, the world’s first, largest and most secure digital asset IRA technology company that allows clients to purchase cryptocurrencies for their retirement accounts, today announced Advanced Biometric Security (ABS) is now available on its 24/7 self-trading retirement platform.

The ABS biometric security process uses machine learning, face-based biometrics and verification to confirm the identity of the person performing self-trades on the Bitcoin IRA platform. The ABS feature goes beyond traditional authentication methods to deliver a significantly higher level of assurance and establish a trusted digital identity.

Advanced Biometric Security feature is available today to all individuals completing an application online and it will be expanded to self-trading later in September.

This new feature follows the company’s announcement in June of its partnership with BitGo Trust Company. As part of the announcement, Bitcoin IRA, with custody provided by BitGo Trust Company, now provides its clients 30% lower custody fees. BitGo Trust Company carries $100 million custody insurance, military-grade security with SOC 2 Type 2 certification and bank-grade Class III vaults.

Chris Kline, COO of Bitcoin IRA said:

“Security is of paramount importance to self-directed cryptocurrency investors. In addition to our world-class custody security offering with BitGo Trust our new feature elevates the standard in the industry by going beyond traditional security methods.”

Individuals looking to add cryptocurrencies to their retirement accounts can visit bitcoinira.com. Existing clients can add Advanced Biometric Security by visiting app.bitcoinira.com/verification.

ABOUT BITCOIN IRA
Bitcoin IRA, available at bitcoinira.com, is the world’s first, largest and most secure digital asset IRA technology company that allows clients to purchase and sell cryptocurrencies and other digital assets for their retirement accounts.

The company provides the technology for self-directed retirement accounts which allows clients to set up a qualified digital asset IRA account, transfer funds from an existing IRA custodian, execute cryptocurrency trades in real-time 24/7 through a leading OTC liquidity partner and then move the funds into an industry-leading multi-signature digital wallet from BitGo, Inc.

Since 2016, Bitcoin IRA has processed over $350 million in investments, gained over 4,000 clients and received more than 450 5-star client reviews. The company has been featured extensively in the media, with coverage in Forbes magazine, CNBC, and The Wall Street Journal, among other publications.

Bitcoin IRA is a financial services technology provider and as such is not a financial adviser, cryptocurrency exchange, custodian, wallet provider, initial coin offering (ICO), or money transmitter. Bitcoin IRA is privately funded and based in Los Angeles.

Learn more about Bitcoin IRA at bitcoinira.com or call 877-936-7175.

IRA and 401(k) Contribution Limits Are Increasing in 2019 – Here’s How to Take Maximum Advantage

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In great news for those saving for retirement and looking to grow their investments, Americans will be able to contribute more to both their IRA and 401(k) in 2019.

The Internal Revenue Service announced that the 401(k) limit was up $500 from $18,500 in 2018 to $19,000 in 2019.

This increase applies to the 401(k) plans as well as 403(b) plans, most 457 plans and the federal government’s Thrift Savings Plan.

If you’re over 50, that’s even better news, as the the catch-up contribution limit for employees 50 and older is $6,000, which is the same as last year, but it does mean that this year those employees can put as much as $25,000 ($19,000+$6,000) in their 401(k) plan this year.

When it comes to IRAs, the Internal Revenue Service is lifting that contribution limit as well. Individual retirement accounts, or IRAs, see their first bump in six years, to $6,000 up from $5,500 in 2018. Again, investors older than 50 can save as much as $7,000 in an IRA by utilizing the catch-up contribution limit, which, this year, remains at $1,000.

IRAs and Compound Interest

Obviously, via the magic of compound interest, younger workers are poised to benefit even more if they max out their contributions.

The impact of the new IRA contribution limit is even bigger for someone who is younger. For someone at the age of 35 with $100,000 in their IRA so far, the extra decade of $6,000 annual contributions until age 65 results in a portfolio worth more than $2,700,000. Under the old contribution limit, the same investor would have been missing out on an extra $82,000 in their account.

Most Americans Miss Out on Retirement Benefits of 401(k)s

While the raised limits are great news, many Americans are expected to skip taking advantage of it. The Bureau of Labor Statistics says that only about 54 million American workers put any money at all into a 401(k) plan in 2015. Compared to the 150 workers on file that year, those numbers aren’t great.

Financial firm Vanguard said that only ten percent of participants dropped the max into their 401(k) contributions in 2016, which itself was a drop from 12% in 2013.

Bitcoin IRA Allows Account Holders to Transfer or Open Retirement Accounts

While not all Americans have an employer-sponsored retirement account, the ones that do often don’t contribute to it, either because they don’t know that they should – or because they can’t afford to do so.

Whatever your particular situation is, you can learn about the benefits of directing your retirement funds into Bitcoin IRA, as well as applying to start a new account, or transferring your existing account.

How to invest in Bitcoin Profitably – Part 3?

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In the previous post of the “How to invest in Bitcoin profitably” series, I explained how indirect investments in Bitcoin would work. Though the methods described can be heralded as safe or risk averse, the returns are substantially small and are incurred over longer durations. But part 1 explained methods that are pretty risky if the market gets volatile. So people more often ask me a smart way of investing in the cryptocurrency where either the risk is not too high but the returns are substantial or a way that gives them additional benefits apart from the profits for the kind of risk they are incurring. Well there are a couple of ways and that is what this final post in the series of bitcoin investment posts is about. Let’s look into those methods:

Bitcoin Investment Trust’s GBTC:

‘Bitcoin Investment Trust’ was launched in 2013 by Barry Silbert, is an open ended trust that is invested exclusively in bitcoin and derives its value solely from the price of bitcoin. It enables accredited investors, with annual incomes greater than $200,000 or assets of more than $1 million, to gain exposure to the price movement of bitcoin for a minimum investment of $25,000 without the challenges of buying and securely storing bitcoin. The price of GBTC shares roughly account for 10% of Bitcoin price and hence people wouldn’t be directly exposed to the risk of Bitcoin. It also gives you additional tax benefits apart from the reduced exposure.

Bitcoin Investment Retirement Account:

While GBTC holds good promise, it is available only for accredited investors. The other instrument which is the most common one, that also provides tax benefits along with good return on investments in Bitcoin would be Bitcoin IRA. Bitcoin IRA allows users of any scale to invest directly in Bitcoin and hence directly apes investments in real time Bitcoin markets. The customers hold the Bitcoin directly where Kingdom Trust acts as the custodian and BitGo secures the cryptocurrency. The firm uses Genesis Trading to purchase Bitcoin and has an annual contribution limit of $5000.

Due to GBTC’s limited availability, Bitcoin IRA proves to be the better option with good amount of returns aggregated over a period of time. It would also provide tax benefits and good exposure to Bitcoin markets.

Bitcoin News Bites

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  • An investment bank, Needham & Company, has just released a report which states bitcoin’s value is understated by 58% of its current value. Bitcoin’s ostensible value is $412, but should really have a value of $655, according to the report.
  • You can now get bitcoin from an ATM at 17th and Mission Streets in San Francisco. This is now the third bitcoin ATM in the Mission.
  • Bitcoin technology is stirring controversy on Wall Street. Early in March, 2016, the company CVR3 announced the successful completion of a trial in which over 40 of its member banks put blockchain technology to a test. Each member issued, traded and redeemed a fixed-income product.  Although the test results threaten to make current Wall Street trading technology obsolete, Wall Street spokespeople promise they’ll now use the test results to refashion their old technology for better trading performance.
  • After claiming it would no longer accept bitcoin on its Windows Store, Microsoft announced a complete reversal in policy.  The IT giant has offered no explanation as to why it had initially rejected bitcoin as a payment option.
  • The noted email service, FastMail, that offers paid email accounts, has been accepting bitcoin payments through BitPay for customers who choose to upgrade to its premium option.  FastMail’s work in this area has been completely unannounced and has remained under the radar.  The service is used internationally by over 100,000 individuals and organizations.
  • The first Arab bitcoin community has recently formed.  Until now, there has been little discussion in the Arab world about bitcoin.  The primary purpose of the Arab bitcoin community is to understand the idea behind bitcoin and promote discussions about it.  The group will be pushing for adoption of bitcoin throughout the Middle East and North Africa in the coming years.
  • Bovada Sportsbook, the online sports betting platform, now accepts bitcoin.  This action is welcomed by frequent Bovada since it cuts down on transaction fees incurred through depositing or withdrawing funds. Also, the option to be able to pay with bitcoin represents a boon to privacy, a big concern among sports bettors.
  • According to the Financial Times, in the next two weeks, Australian Craig Steven Wright will announce he is Satoshi Nakamoto, the creator of bitcoin. What’s more, Stevens claims he will prove his identity cryptographically.  Wired Magazine had claimed it received information through a link that Nakamoto is actually Stevens.  Apparently, in about two weeks, we’ll find out the truth from Stevens (Nakamoto?) himself.
  • Coinbase CEO Brian Armstrong reports his company is looking into the creating of “killer apps” for widespread bitcoin usage.  Armstrong envisions, among other things, a world in which large populations with cell phones but no access to banking would be able to fill an immense financial gap through bitcoin transactions.
  • In March, 2016, WireX announced the very first two-way bitcoin debit card.  The card also has a function with which a user can buy bitcoin. Users will be able to fund bitcoin accounts from any location by means of a traditional bank transfer and alternative payment methods. This is apparently the first “hybrid” banking operation that links blockchain technology to the traditional banking system.

Bitcoin: A Dynamic Alternative Investment for a Self-Directed IRA

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Most people are passive and incurious in their strategy for setting up a self-directed IRA.  They most frequently take the path of least resistance, and go with a self-directed IRA in stocks, bonds or mutual funds.  This is probably because they’re not aware they have other options – quite a few other options, actually.

In a self-directed IRA, you can invest in commercial rental properties, precious metals, oil and gas organizations, tax lien certificates and even private placements.  One of the keys to choosing a solid and allowable alternative investment in your self-directed IRA is to work through a reputable custodian.  As the Security and Exchange Commission (SEC) clearly states through its Office of Investor Education and Advocacy:

“Most IRA custodians are banks and broker-dealers that limit the holdings in IRA accounts to firm-approved stocks, bonds, mutual funds and CDs.  Custodians and trustees for self-directed IRAs, however, may allow investors to invest retirement funds in other types of assets …”

Given this allowable path to an alternative investment, we highly suggest you consider an investment in bitcoin for your self-directed IRA.

Bitcoin is digital currency that originates and is sustained electronically.  Unlike dollars or other fiat currency, bitcoin is not printed or controlled by any government. There is no intermediary between payer and payee.  As such, bitcoin is frequently characterized as a “peer-to-peer currency.”

Bitcoin has virtues traditional money can’t compete with.  You can set up a bitcoin account in no time.  With a traditional bank account, you sometimes have to wait days for a new account to be approved.
Also, with bitcoin, you can send money internationally in seconds and not have to wait for approval. Remember, large banks don’t control bitcoin.  Details of every bitcoin transaction are stored in a general ledger called a blockchain.  But since it’s not possible to get to the person responsible for a bitcoin transaction by knowing a bitcoin address, all bitcoins transactions are anonymous.

Bitcoin reputation for quick anonymous money has definitely caught on. Businesses like Dell, Target, Amazon, Victoria’s Secret, Paypal, and many others all accept bitcoin.

Because of its volatility and possibility for very wide use, bitcoin offers solid opportunity for upside potential. It’s for these reasons, we suggest you consider a self-directed bitcoin IRA as a long-term investment.
This kind of investment is not for everyone. You have to be an accredited investor to participate.  In other words, you need a net worth of a million dollars, not counting the value of your primary residence.  Or you need to have an income of $200,000 dollars in each of the last two years (or $300,000 with a spouse).
You can have an IRA consisting exclusively of bitcoin, or as part of a mixed portfolio with other assets; but, in either case, your IRA must be self-directed. And to have a self-directed IRA, you’ll need a custodian.  There are only a few custodians who handle bitcoin.

If you want to set up a bitcoin self-directed IRA, call BitcoinIRA at 1-800-717-1130.  One of our representatives will help you initiate your account through a reputable and knowledgeable custodian.

The New Bitcoin Portfolio Diversification Strategy

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Successful investing, like many endeavors, is often discussed simplistically, as though it were an either/or activity.   Either you store your nest egg in an FDI-insured bank account and let it gradually accumulate a return at a paltry rate of interest.  Or you do something highly speculative with your cash — like play the futures market or slap money down on momentum stocks – with an eye towards a quick and luxurious return on your investment.

There’s something to be said for both extremes.  It certainly makes sense to keep cash on hand in case of an emergency.  Having enough cash available to cover six months’ worth of your basic expenses is a good rule of thumb.  But keeping the bulk of your portfolio in cash, especially at current reduced rates of interest, is foolhardy.  A portfolio consisting solely of cash in the bank can never grow enough to fund you in your retirement years.

Still, highly aggressive investments in vehicles like momentum stocks or the futures markets can wipe out an unseasoned investor in months or even weeks.  But a diverse portfolio that allows for ample protection as well as a bit of rapid growth is a good way to go.

Towards this end, a portfolio consisting principally of gold – physical gold – and a moderate quantity of bitcoin can work very well for a lay investor.   Here’s why. Gold has been around for thousands of years.  As former U.S. Mint Director, Ed Moy, has observed, “Gold is the undisputed king of longevity for being in use since the dawn of civilization.”

What’s more, gold is a tangible asset that routinely serves as a safe haven for investors fleeing the negative effects of equities markets and a declining dollar.  Central banks store physical gold to hedge their inventory of world-reserve currency (dollars) and the devaluation of their home currencies.  Because of gold’s limited above-ground supplies, investors can feel reasonably confident their own stash of physical gold will hold its value and stabilize their portfolios.

If gold represents a balanced portfolio’s stabilizer, bitcoin can serve as its primary growth additive.  The new electronic currency, bitcoin, has ranged in value (in dollars) from zero to $1,230.00 and is currently around $416.00.   Target, Subway, Paypal, Amazon, Victoria’s Secret and Zappos are just a few of the many businesses that now accept bitcoin.  The cryptocurrency stands only to grow in value as its circulation base expands.  As such, it represents a splendid opportunity for robust growth in a balanced portfolio.

The question remains why invest in bitcoin, and why not invest in momentum stocks or even value stocks for rapid growth?  There are several reasons – mainly having to do with the current challenges of publicly owned stocks.

According to a recent poll by FactSet, analysts anticipate first-quarter earnings per share in the S&P 500 will decline by 8.7 %.   If they’re right, this will be the fourth consecutive quarter of a decline in earnings.  This decline would also mark the first such four-in-a-row series of declines since the 2008-2009 financial crisis.

Clearly, if S&P stocks are this vulnerable to decline, momentum stocks – smaller speculative stocks – will be even more vulnerable.

Also, many of the stock purchases we’re now seeing are originating from company stock buybacks. This kind of stock purchase, if handled in sufficient quantity, can reduce the number of outstanding shares and make a stock appear more attractive to outside investors.

If you happen to know someone in a company and have intimate knowledge of its markets, as an investor, you might have a leg up.   But lacking such knowledge, you’d best steer clear of a momentum – or so-called “hot stock” – in the current market environment.

For an alternative approach to a balanced portfolio, then, you might want to consider a mix of bitcoin and physical gold.  Bitcoin represents a new form of investment.  So be sure to use your own tolerance for risk and your available resources as guidelines to the respective percentages of gold vs. bitcoin you choose to invest.

Let us help you get started with BitcoinIRA, click to get started.