Cryptocurrency assets such as bitcoin have become a popular investment option due to the fact that they have been able to offer high returns over the past year. Many investors out there are now adding crypto assets to their investment portfolios. You can either choose to buy and sell cryptocurrencies regularly to take advantage of shifts in the market or you can hold them for the long term inside of a secure holding portfolio such as a Cryptocurrency IRA.
But, did you know that you can hold cryptocurrencies in self-directed IRAs? The major benefit of self-directed IRA Bitcoin is that they give an investor broad authority to invest their funds as they wish while enjoying all the tax advantages offered by conventional IRAs.
3 Reasons Why You Should Invest In Bitcoin Through A Cryptocurrency IRA
Greater Portfolio Diversification
Investing in bitcoin through IRA will enable you to diversify your retirement portfolio. This is mainly due to the fact that alternative investments are an important component of any investment portfolio.
In fact, Mark Cuban believes that a true adventurer should have about 10% of their investment portfolio to crypto assets such as ICO tokens, Bitcoin, Litecoin, and Ethereum. Another good thing is that you can transfer money from your current IRA to your self-directed IRA and use the money to invest in crypto assets such as bitcoin.
One of the major reasons why you should choose to invest in crypto assets through a self-directed Bitcoin or Ethereum IRA is the fact that it offers the tax advantages like those offered by conventional IRAs. As a result, choosing this investment will enable you to reduce your tax liability and increase the profitability of your investments.
You can structure your account as a conventional Bitcoin in IRA account so that you can invest with pre-tax dollars or you can choose to structure it as a Bitcoin Roth IRA as this leads to tax-free growth. And since most of the investors out there invest in crypto assets with after-tax dollars, this may be a good option for those who want to invest in the long term.
Investing in bitcoin through a cryptocurrency IRA secures your crypto assets in the same way gold and silver is safely stored and used as money. A custodian holds assets in a self-directed IRA. The custodian is the one who stores them in a secure wallet and helps you exchange your crypto assets for dollars when you want to start making withdrawals. This wallet has multiple protection layers that ensure that your digital currency assets are protected from hackers.
In addition, the custodian will transfer your digital currency assets to your heirs when you die. This means that your loved ones can access your digital currency assets even if they don’t know how to use a cryptocurrency wallet. If you would like to learn more about how you can safely secure your investments inside of a cryptocurrency IRA then feel free to check out our top resource: https://www.smartbitcoininvestments.com/ – BitcoinIRA Reviews, Companies, and Strategies
This form of investment is not ideal for every investor especially an investor who wants short-term profits. It is a good investment option for those who want to invest in the long term. If you are among those investors who want to invest in the long term, then it is a good idea to consider investing in cryptocurrency IRAs to have a convenient way to secure your crypto nest eggs.