A bitcoin IRA has been designed to allow you to invest in a range of different cryptocurrencies by using the savings for your retirement. The best bitcoin IRA - coin IRA is always self-directed in nature. A number of financial institutions now offer these types of retirement accounts since the US government has started to allow cryptocurrencies as an alternative investment. What this means is that you can keep traditional investments in your retirement account well at the same time invest in cryptocurrencies through self-directed option.
Getting to Know the Best Bitcoin IRA - Coin IRA
In a normal IRA, individual retirement account, you can invest in traditional assets such as money market funds, bonds, and stocks. In a bitcoin IRA, you can add non traditional and alternative options, including cryptocurrencies period most custodians at present only allow bitcoin and ethereum, although others have started to add different currencies as well.
The reason why they are called a bitcoin IRA, therefore, is not because they only allow bitcoin. Rather, it is because of the brand value of the word “bitcoin”, which everybody now recognizes. Other currencies that can be included in these accounts include Ethereum Classic, Bitcoin Cash, Litecoin, Ripple, Ethereum, and more. These accounts are managed by custodians who have agreed to also work with alternative Investments. However, because it is a self directed account, they generally do not have fiduciary responsibility.
High Risks, High Costs?
Cryptocurrencies are becoming increasingly popular and some financial experts are worried about this. Hence, it is very easy to find information that will tell you to avoid cryptocurrency at all costs because they are nothing but a hype. On the other hand, it seems that all financial experts agree that diversification is hugely important and it is undeniable that cryptocurrencies have gained tremendous value over time. For instance, in February 2017, a single bitcoin unit was worth $1,000. By December 2017, it was worth $19,600. That being said, the value then once again dropped and, by February 2018, it was worth $6,252. That is still a lot more than what it was worth the year before.
Another potential issue with a bitcoin IRA is that, because there are still quite new, custodians of the tendency to charge significant fees. It is not unheard of for a minimum monthly account fee of $20 to be charged, as well as a holding fee that reflects the percentage of the total balance. This illustrates why it is so important that you properly research the different accounts that are available to you so that you can find one that is affordable. You need to look at account opening fees, monthly or annual maintenance fees, holding fees, and transaction charges.
With the above in mind, you must decide for yourself whether or not you want to open a Bitcoin IRA. The prevailing consensus seems to be that it is a good idea, mainly because of the importance of diversification and the fact that the world is becoming increasingly digital.