Digital currencies have surged in popularity in the past few years. With the hope of further price appreciation, more and more people are buying cryptocurrencies and intending to hold them for the long run.
For long-term investors, another way of investing in digital currencies, particularly Bitcoin, is through IRAs or individual retirement accounts. Investing in a Bitcoin IRA actually brings several benefits over just simply purchasing the cryptocurrency on a bitcoin exchange. Discover the benefits below.
1. Retirement Portfolio Diversification
Having an IRA means that investors can now diversify their investments, making their retirement more profitable and secure, while keeping their costs down. An IRA also allows investors to take advantage of other types of investments, including commodities, real estate, and even gold. In a world where almost everyone seems to be turning into a frugal consumer, it's nice to have the option of investing in something that's stable, rather than depending on the volatile stock market. With so many options to choose from, it makes sense to take advantage of alternative asset classes like Bitcoin for your retirement.
The second benefit to investing in an IRA is that you don't have to worry about paying taxes on the profits from the initial investment. When you invest in the traditional markets, you must pay taxes on any profits that you earn. These profits are taxable in most cases. However, if you invest in digital currencies through an IRA, the taxes due on the profits of the account are delayed until distribution. This means that if your gains are more than the amount you invested, you’ll receive a tax-deferred income. This income is taxed only once you reach the age of retirement.
3. Easy To Manage
How bitcoin IRA works is incredibly easy to understand, especially for a person who doesn’t have any prior knowledge of digital currencies. All you need to do is go online and get a virtual account. Then sign up to an online bitcoin IRA management platform like BitIRA that handles these types of accounts. You should then open an account and start investing in your digital currency IRA. Check out this BitIRA review to learn more about this professional platform for bitcoin IRA management.
One of the best things about a virtual currency IRA, is that it can be opened from any computer. You don’t need any special software to be able to trade, so anyone can do it. This is the biggest advantage to investing in this way. Nonetheless, it’s still a good idea to read up on the basics of virtual currencies before investing, but after that, there really isn't much you need to know.
4. Long-Term Growth Potential
The bitcoin currency has been around for some time and has developed a great following. It’s still considered as one of the most viable alternatives to traditional currencies such as the US dollar, the pound sterling, or the Japanese yen. One of the main benefits of having a Bitcoin IRA for your retirement is its long-term growth potential. If you understand how the supply and demand curve work, you can see that bitcoin and other digital currencies have a solid potential to grow in the long-term. The growth potential of any currency depends largely on how well it's able to gain popularity. As long as the demand is high enough and if it can gain enough credibility, it will continue to grow in terms of popularity and value.
5. Government Hedge
While the value of a ‘digital currency’ has increased exponentially over the past few years, one issue has been the potential for governmental action to affect its value. In the United States, there’s a lot of talk about regulating the use of money on the web and the use of digital currencies (like Bitcoin) to prevent illegal activities. However, what many people don't know is that many government policies have been introduced in recent years to regulate the use of this technology and prevent government intervention. Many experts believe that when such measures are enacted, the ability of the government to regulate or even interfere with the process will become more difficult to justify.
Bitcoin IRA works as a complement to your existing, well-rounded retirement portfolio. However, it’s essential to note that understanding how an IRA works, having a basic knowledge of cryptocurrencies or digital currencies, and learning how to handle the risks are crucial before investing your hard-earned money in a Bitcoin IRA. Nevertheless, investing in Bitcoin IRA can really be a good way to prepare for your retirement.