Everybody knows that a good investment portfolio is a diverse investment portfolio. This means that you may want to consider looking into brand new opportunities. However, it is equally vital to never make any investments that you do not properly understand. Most of us now have at least a baseline of knowledge of what cryptocurrencies are, but that does not necessarily mean we also understand why they are so beneficial as an investment. Let's take a look at some of those reasons.
The Advantages of Bitcoin Roth IRA’s
In order for something to be classed as a good investment, like bitcoin Roth IRA’s, you need to have at least some guarantee that it will increase in value. Bitcoin exists in finite supply. What this means is that there will never be more than 21 million Bitcoin in total and these will be in circulation by 2140. As such, bitcoin is quite similar to gold in a such that people are likely to always wanted but more gold will never be produced.
Additionally, the world is becoming increasingly digital, which means merchants are more and more accepting of digital currencies as well. In 2013, there were some 50,000 bitcoin transactions per day. By 2017, this had increased to 320,000. This is good in terms of investments because it means that its value will remain constant at least.
It is also possible to invest in Bitcoin in a variety of different ways. If you choose to open a Roth IRA, you will have to work with a custodian you can make those investments for you. However, it will be a self directed IRA, which means you retain ultimate control over how many bitcoin you want to purchase and what percentage of your entire portfolio will be dedicated to cryptocurrencies.
Furthermore, bitcoin is an independent asset class, meaning it is no dependent on bonds, savings, and stocks. If there is an economic crisis, it will have no impact on the value of bitcoin. In fact comma history has shown us that, rather than decreasing in value, they increase. This was seen, for instance, during both the Greek and the Cypriot financial crises.
Of course, it is important to also be realistic, particularly about the risks involved with Bitcoin. It seems like the perfect solution for Life in the modern age. It is digital, it is decentralized, and it crosses all international borders in the blink of an eye. However, it is also less than a decade old and its value is dependent fully on what individuals are willing to pay for it. Furthermore, bitcoin is still not truly used as a currency in its own right. Rather, people attached a fiat value to it which means investors seem them more as an object than a currency.
So should you consider a bitcoin Roth IRA? If you are comfortable with a self directed retirement account, then the answer is wholeheartedly yes. Just because it is a bitcoin IRA does not mean you can only include digital currencies. Rather, it gives you the option to also include them should you so choose.