portfolio diversification Archives

Bitcoin IRAs as a Retirement Strategy: Three Reasons Why

Posted on May 16, 2018 | by [email protected]

The data proves it: Americans are freaked out about retirement.

According to a study published in 2017 by the National Institute of Retirement Security, 88% of Americans say that the nation faces a retirement crisis. When you get more specific, the numbers are even more alarming: 21% of all Americans have $0 saved for retirement, and, if you’re looking at the millennial population, that number climbs up to 66%. Beyond the fear, there seems to be a general sense of confusion: 81% of Americans have no idea how much money they’ll need for retirement.

So, is the notion of retiring beachside with a margarita a thing of the past? Not necessarily. But now is certainly time to rethink strategy and the importance of diversification in a successful retirement portfolio, a concept that is largely overlooked. “For a variety of reasons, people do not understand the value of having a highly diversified portfolio,” writes Barry Ritholtz in Bloomberg’s recent article “How to Avoid a Retirement Disaster.”

Many workers neglect to diversify in other stocks and assets outside of their company, but, as Ritholtz explains, “That is a very intense concentration of financial risk. For those workers, diversifying their company stock into broad indexes is a prudent approach.”

Furthermore, it is also important to safeguard against a portfolio’s sensitivity to market swings by diversifying across asset classes.

Bitcoin and cryptocurrencies, removed from third-party interference and stock market fluctuations, can function as a valuable asset class in a successfully diversified retirement portfolio. Here are a few reasons why.

A Rising Star in Wall Street Circles

According to CoinDesk’s comprehensive State of the Blockchain report for 2017, 69% of people surveyed think that Bitcoin’s prices at the end of Q1 2017 are undervalued, indicating that the Bitcoin’s star is rising. This sentiment is largely reflected by the surge of mainstream acceptance that cryptocurrencies are seeing, particularly in the Wall Street domain.

The CME and Cboe were the first two institutions to launch regulated Bitcoin futures in 2017, serving as trailblazers for larger adoption in the mainstream finance world.

Since then, Goldman Sachs announced the first Bitcoin trading operation at a Wall Street bank, while Nasdaq has announced a collaboration with cryptocurrency exchange Gemini, and confirmed their interest in eventually becoming a crypto exchange as well.

In my opinion, this shift toward mainstream acceptance demonstrates Bitcoin’s staying power as a viable long-term asset class for a diversified retirement portfolio.

A Complement to Gold

Gold has been around for thousands of years, and its finite supply, as well as its removal from the stock market, has helped earn its reputation as a notoriously reliable investment as well as a valuable hedge against inflation.

While Bitcoin has only been on the scene since 2009, it has already demonstrated similar merits. According to research published by ArkInvest and Coinbase, Bitcoin has already been recognized “the only asset that maintains consistently low correlation with every other asset,” demonstrating its strength as a diversified asset in a retirement portfolio.

A Groundbreaking Technology

Industries across a variety of sectors are recognizing that the decentralized blockchain technology that powers Bitcoin has major applications in a variety of enterprises. Facebook recently announced the launch of a blockchain research team, with interest in the technology’s application to such fields as data storage.

Amazon, too, just announced a partnership with a new start-up called Kaleido that makes it easier for customers to put their services on a blockchain. “introducing Klaido to Amazon Web Services (AWS) customers is going to help customers move faster and not worry about managing blockchain themselves.” Amazon Web Services said in a statement, adding that it is the first Blockchain SaaS solution available on the AWS marketplace.

In my opinion, Bitcoin’s influence in the mainstream finance and technology sector is more powerful than ever. A distinguished asset alongside gold, I believe that Bitcoin will continue to prove itself as a valuable digital asset in a diversified retirement portfolio.

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[Infographic] Cryptocurrency Guide Brought to You by BitcoinIRA.com

Posted on February 20, 2018 | by [email protected]

UPDATE June 11, 2019: Image updated with the latest coin stats and our newest tokens.

If you’re looking to invest in cryptocurrency for your IRA or 401(K) with BitcoinIRA.com, you probably want to know more of the specifics about each digital currency we support. That’s why we created this comprehensive cryptocurrency guide, which breaks down the definitions, key characteristics, and price projections for Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash, and Ethereum Classic.

It’s an exciting time to plan for retirement. Thought leaders in the crypto space are predicting price increases for each of these six currencies by the end of year. To get started with purchasing digital currencies in your IRA or 401(k), contact BitcoinIRA.com at (877) 936-7175.

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Ripple Price 2018: Why It’s Projected to Soar

Posted on February 15, 2018 | by [email protected]

Ripple (XRP) is a real-time gross settlement system, currency exchange, and remittance network. It has the third-largest market cap of any digital currency, and a passionate base of Twitter followers. Recently, the cryptocurrency partnered with a number of different financial organizations and institutions, including MoneyGram, FDT Corporation, Mercury FX, and Western Union. According to the Ripple website, the digital currency strives to bring payments out of the disco era and into the present world where “three billion people are connected online, cars drive themselves and appliances can communicate.” But does it live up to all of the hype? Let’s take a closer look.

How Ripple Transactions Work

Ripple connects banks, payment providers, and digital asset exchanges via RippleNet. Unlike Bitcoin, where transactions are verified through a proof of work process that typically takes about 10 minutes, Ripple transactions are confirmed with a consensus protocol that typically takes 5 seconds. If someone tries to submit the same payment through multiple gateways, distributed nodes decide by consensus which transaction was made first, thus preventing the problem of double spend. Furthermore, the transaction fee, at 0.00001 XRP, is much less expensive than that charged by banks processing cross-border payments.

Ripple has two primary products for banks: xCurrent and xRapid. xCurrent, Ripple’s settlement solution for banks, allows the originating bank, the correspondent bank and the beneficiary bank to use a messenger system to coordinate information between banks, while the ILP ledger uses the interledger protocol to coordinate funds movement.

Meanwhile, xRapid uses the XRP asset to offer on-demand liquidity. Describing xRapid’s functionality, Ripple CEO Brad Garlinghouse said: “The Bank of Andy can sell $1, buy XRP. That XRP can now be moved to an Argentinian digital asset exchange, you can sell the XRP and buy an Argentinian peso, and now you have good liquid funds in less than 10 seconds in another market.”

With the implementation of xCurrent and xRapid, Ripple is striving to transform global commerce as we know it, and a growing number of partnerships indicate that many organizations and financial institutions are on board.

Ripple’s Growing Partnerships

Over a hundred banks are currently using xCurrent, while five customers are currently testing xRapid. These notable companies and institutions include, but are not limited to: money transfer company MoneyGram, currency specialist Mercury FX, telecom provider IDT, and financial services company Western Union. Western Union CTO Sheri Rhodes expressed enthusiasm about experimenting with Ripple’s technology: “We have a strong platform and system that work well today, but we continue to explore and test whether these technologies could potentially reduce costs and improve the customer experience,” Rhodes recently said, indicating that the momentum for Ripple as both a currency and a global payments solution seems to only be increasing.

Ripple in Your IRA

As Ripple continues to establish itself as a cryptocurrency and an innovative global payments solution, it can also be viewed as a strategic choice for those looking to diversify their retirement portfolio with cryptocurrencies. XRP increased by more than 1,000 percent since the start of December 2017, and bestselling author Craig Beck predicts that the by the end of 2018, the Ripple price is expected to bisect the $2 hurdle at least.

Trevor Koverko, the CEO of securities token platform Polymath, recently told Forbes: “People feel comfortable with the name and the security of Ripple. A lot of people are beginning to realize how big of an opportunity there is between business and the blockchain, and that’s making Ripple the early winner here.”

To capitalize on this groundbreaking opportunity to invest in Ripple for your IRA or 401(k) account, give Bitcoin IRA a call today at 877-936-7175.

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6 Reasons to Invest in Cryptocurrency in 2018

Posted on February 8, 2018 | by [email protected]

It’s a new year and a better time than ever to dive into financial planning. If you’re revisiting your IRA investment plan, here are six reasons why you should look into adding cryptocurrency to your portfolio.

Mainstream Adoption

With the launch of Bitcoin Futures across both the CBOE and CME markets, investors are approaching Bitcoin as a more viable investment opportunity, increasing the digital currency’s visibility and credibility at the mainstream level, and winning over some of its biggest skeptics.

Furthermore, regulated exchanges like LedgerX, (and tZero, which is expected to launch in early 2018), are reducing risk, boosting liquidity, and drawing more institutional investors to the cryptocurrency space.

Digital currencies have gained traction in the political realm, as well. Last September, the Cryptocurrency Tax Fairness Act was introduced as a way to create a taxing structure for purchases made with cryptocurrency and would allow customers to make purchases up to $600 without burdensome reporting requirements. “By cutting red tape and eliminating onerous reporting requirements, it will allow cryptocurrencies to further benefit customers and help create good jobs,” Colorado Representative Jared Polis said in support of the Act. Although it was not incorporated into the tax bill, it remains up for discussion and indicates a tremendous level of interest in streamlining processes surrounding digital currency.

Global Prominence

Bitcoin is being used all across the globe and it is more widely distributed today than it has ever before. Nothing has stopped the massive upward trajectory of cryptocurrency, not even China’s crackdown. Although the price briefly dropped following the news of China’s ban, Japan and South Korea picked up the slack and Bitcoin rose to another all-time high quickly thereafter.

All around the world, Bitcoin and cryptocurrencies as a whole are rising in global prominence. Japan currently accepts digital currency in over 260,000 retail stores. In Venezuela, amidst the hyperinflation of the Bolivar, Bitcoin is used to buy food, plane tickets, and pay employees, and is referred to as a lifesaving currency.

All signs point to the fact that digital currencies are not a passing trend and are here to stay. In a recent survey of different cryptocurrency investors around the world, 90 percent said they believed in the future of Bitcoin and are investing with a long-term perspective.

Diversification of Your Portfolio

Diversification is an investment technique to reduce risk by allocating investments among various financial instruments. Bitcoin and cryptocurrency is one of the best ways these days to diversify your IRA or 401k. Bitcoin’s growth potential is greater than that of any traditional asset class. As Bitcoin legitimizes and stabilizes it will pass traditional investments.

With analysts predicting Bitcoin’s price to hit in the tens of thousands in the near future, it is certainly a portfolio diversification opportunity that will add value to your account.

Gold 2.0

Bitcoin and gold have many similarities. Both have a limited supply, involve mining, and are not controlled by the government. Anti Danilevski, CEO of KICKICO, a Russian blockchain platform for initial coin offerings, explained how Bitcoin patterns parallel those of gold in financially problematic times. “During the last year S&P 500 index was decreased, gold increased by 14.4%, whereas Bitcoin increased by 74.9%, during the last five years, S&P 500 increased by 68.8%, gold decreased by 26.5%, whilst Bitcoin grew by an impressive 24.9%,” Danilevski said.

In the volatile political climate we currently live in, investors are flocking to gold and Bitcoin as safe haven assets. And while cryptocurrencies are a younger asset class than gold, they have already demonstrated enormous growth and a continuous upward trajectory.

Blockchain Innovation

The growing influence of the blockchain and its technology is transforming the way people are doing business. It is increasingly transforming peer-to-peer interactions in the digital world, disrupting traditional processes.

The implications of this technology go beyond finance. Although finance was the first industry to embrace encrypted, distributed ledgers, other industries are adopting the technology as well. Recruitment and human resources departments are using blockchain CVs to verify qualifications of applicants, and intellectual property law, which involves tracking transfer of ownership, is also employing the technology.

Much more than a digital currency, Bitcoin can be thought of as the basis for a groundbreaking technology that many consider the greatest innovation since the internet.

Beyond Bitcoin: The Rise of Ethereum and Other Currencies

Bitcoin is not the only digital currency with a massive upward trajectory. In fact, many experts are now wondering if Ethereum, the second-largest cryptocurrency, may surpass Bitcoin.

There is a community of enterprises, academics, and Ethereum subject matters who comprise the Enterprise Ethereum Alliance, an organization dedicated to learning about, and building upon, Ethereum’s capabilities. Ethereum’s technology is built upon smart contracts. A computer protocol dedicated to digitally facilitating, verifying, and enforcing the negotiation or performance of a contract, smart contracts are the building blocks for decentralized applications. By presenting a new way of processing agreement that removes the verification of a middleman, Ethereum is disrupting the way business is run, and all signs show indicate that this won’t be letting up anytime soon.

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Is Bitcoin a solid investment for retirement account?

Posted on October 15, 2016 | by [email protected]

In 2013, when the world had lot of questions looming around Bitcoin, people were willing to explore it as an investment opportunity. The central interest was around finding ways to capitalize Bitcoin’s properties to make it a prudent investment. Ranging from portfolio diversifier to pure investments, Bitcoin has come a long way slowly replacing the traditional investment formats. One among such most sorted investment formats is our average retirement account. Let’s look into how and why Bitcoin can be a good investment alternative for retirement account:

The suitable traits:

Investments for a retirement account should be diverse, offering great mix and should be able to counterbalance losses of each asset in the portfolio. This would mean the assets have to be non-correlated to the maximum extent. This would also improvise the risk to reward ratio and offers great deal of flexibility. Bitcoin perfectly fits the requisite description as it has no direct bearing with macroeconomic factors. By the virtue of its digital properties, the rules that govern the market don’t necessarily apply to Bitcoin. This makes it one of the most non correlated currency with respect to any asset class.

A typical investment would include few asset classes with good returns and would have small portions of assets for hedging. Traditionally the portfolio would have about 10 % invested in Gold, real estate or hedge funds to manage the risk of the profile.

Current status of Bitcoin investments:

Post 2013, Bitcoin has had its own set of pitfalls but the currency has recovered significantly well over the course of time. From 2014 the yearly returns on Bitcoin have remained positive and the price swings were sufficiently large to ensure good returns. Swing investments aggregated over the time would have resulted in returns better than any asset class.

Future of Bitcoin and associated investments:

The future of Bitcoin depends on the adoption of the currency at a consumer level. With great Venture Capital backing, the Bitcoin industry is expanding and consolidating with strong roots. The prime focus of the industry has been to provide applications of Bitcoin in a more packaged and consumer friendly manner. With sufficient push and better adoption the currency is sure to see mainstream adoption.

Apart from Bitcoin, the adoption of its underlying technology is also very vital to the cause. It has also impacted the prices significantly in the past. So basing on these factors it is evident that adoption is the key to have sustained returns on Bitcoin. Basing on the returns, Bitcoin surely would be an important part of your portfolio.