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Staking Crypto Graph

Crypto Staking 101: How to Earn Passive Income with Digital Assets

Cryptocurrencies like Bitcoin, Ethereum, and XRP are all part of an exciting new asset class that is taking the world by storm. Gone are the days of traditional investing through brokers and banks — as the world becomes increasingly digital, the future of money is online. Crypto staking is an exciting feature of this brave new world, allowing you to earn 5-10% interest per month on your cryptocurrency holdings. By simply buying cryptocurrency and storing it on an online staking platform, you can earn generous profits without lifting a finger.

What is Crypto Staking?

As cryptocurrencies evolved beyond Bitcoin, developers created new methods of securing, storing, and validating transactions on digital networks. Known as 'consensus methods', these processes use complex algorithms to define how cryptocurrencies function within a decentralized environment. Proof of Stake (PoS) is a consensus method designed to help reduce the environmental impact caused by Proof of Work (PoW), which requires excessive amounts of electricity to operate. Rather than using warehouses full of computers to validate transactions on the network, PoS is secured and managed through staking: an act of faith and commitment from its users. In order to reward faithful users for their efforts in securing the network, staking rewards are paid out monthly at varying interest rates. These typically fluctuate between 5 and 10% and are defined by how well the network is performing. Users who stake coins on the network also get to vote on certain project decisions, similar to shareholders. Nowadays, most major crypto exchanges like Binance, Kraken, and Huobi allow staking directly on their platforms. In addition, many software and hardware wallets such as Ledger and Exodus also allow staking so you can maintain ownership of your private keys.

Benefits of Staking Crypto

Many people choose to stake crypto as a means to increase their profits without the risk of having to actively trade. In many cases, users who stake crypto make similar returns to those who actively trade crypto on a daily basis. Unless you are a highly experienced trader with spare time on your hands, it makes far more sense to stake crypto as it's low risk and requires no time commitment. Due to market movements, staking crypto is not entirely without risk but it does give you an additional backup should the market drop. For example, if the market value of your staked asset decreases by 2% but you earn 10% interest that month, you'll still come out in profit. At the end of the day, most cryptocurrency investors have a significant amount of capital stored on the blockchain - so why not make that money work for you? If you're worried about market volatility, there are even some stablecoins that offer staking with high returns of up to 10%. These coins avoid volatility by maintaining a price matched equally (1:1) to the US dollar, euro, or any other fiat currency.

What are the Best Staking Coins?

Cryptocurrency is a fast-moving sector with new developments occurring on a daily basis. New projects pop up frequently, presenting competition to existing projects and creating ripples in the market. To choose the best staking coin, you should look for one that has been around for a few years, has a large market cap, and consistent annual growth. Some newer coins might offer higher returns than older ones but their low market cap and resultant volatility make them a risky investment. Solid, long-running, and reliable projects like Ethereum (ETH), VeChain (VET), Neo (NEO), or Tezos (XTZ) are low-risk investments that provide decent monthly staking returns. However, choosing the right staking coin for you also depends on how much capital you have to invest. Ethereum, currently the second-largest cryptocurrency by market cap, is an 8-year old project that recently changed its consensus method to Proof of Stake. To stake Ethereum, you would need to deposit at least 32 ETH at a cost of around $76,000 as of April 14th, 2021. Never fear though, as many smaller projects require no minimum investment, so you can start earning staking rewards with as little as $1.

Pros and Cons of Staking Coins

Staking cryptocurrency is an excellent way of making passive income but it does have its downsides. The most notable is the large initial investment required. With most coins, you can stake as little as you like but until you've managed to build up your investment, the interest you earn will be negligible. Ideally, you'll want to invest as much as you can in order to get the best returns. Even an investment of $10,000 will only return a few hundred dollars a month, so you'll need some decent capital to really get started. However, research shows that any money you stake will almost always provide better returns than a traditional savings account. Another con is the relative risk involved. Although cryptocurrencies are now a staple feature in most investment portfolios, they still represent higher volatility than other assets. To minimize your risk exposure, always ensure you choose a well-established and trusted coin to invest in.

A Range of Investment Opportunities

As cryptocurrencies continue to gain widespread adoption around the world, more and more financial products are being created to take advantage of this exciting new asset class. Aside from crypto staking, you can also invest in your favorite cryptocurrency through EFTs, index funds, investment trusts, and IRAs. Coin IRA offers services to help you convert your existing 401(k), Roth IRA, or Traditional IRA into a Cryptocurrency IRA. This provides you with a safe, custody-backed way to benefit from the exceptional gains that cryptocurrencies offer while also securing your retirement. Speak to a Coin IRA advisor today and discover how easy it is to become a crypto investor.  
Bitcoin symbol against trading screen

DIY Cryptocurrency Trading – Is It Right for You?

Bitcoin’s price keeps marching higher and higher, fueling a growing interest in cryptocurrency trading. Around fifteen percent of Americans now own some cryptocurrency, and there are about a million users actively engaged in Bitcoin trading every day. That figure doesn’t even account for trades in other cryptocurrencies, like Ethereum and Litecoin. With all the interest in crypto, it’s no wonder that more and more people are interested in DIY trading. It’s easier than ever to create a brokerage account and start buying and selling virtual currencies. Even online courses promise to teach you everything you need to know about investing in this new asset. Self-trading in crypto can make for a wild ride, with the potential for enormous gains. The question is, what’s the cost-benefit analysis? Is DIY trading worth the risk, or are you better off working with a professional? It can be hard to tease out the pros and cons in heady situations like this one, especially when emotions are running high. With that in mind, this article weighs up the advantages — and the disadvantages — of self-trading the new asset class.  You'll also learn how cryptocurrency trading works, and you'll find suggestions about the kinds of issues you should watch out for.

How Does Crypto Trading Work?

On the face of it, self-trading crypto doesn’t look very different from trading in stocks. You’ll need to pick a brokerage and create an account. Most platforms will request some form of personal identification, as well as a verifiable form of payment. It’s a good idea to buy a crypto wallet so that you can store your digital currency, although technically you could decide to leave it all in the exchange if you’re planning on daily trading. If you’re buying a wallet as a self-trader, be aware of the security procedures involved in setting it up. If you lose your password, you could lose access to all of your digital assets, which is why it’s a good idea to make sure your seed phrase is stored somewhere secure. Setting up your account is generally quick and uneventful, which means you’re ready to trade almost immediately.

What Are the Benefits of Self-Trading Your Cryptocurrency?

Volatility

Cryptocurrency is highly volatile, which means that there are constant opportunities for profit. The price of Bitcoin is trending strongly upward, but within that rise, it’s not unusual for the value to rise or fall by a thousand dollars or more in the course of an afternoon. Trading in cryptocurrency can be a high-energy, even frenetic activity. The market moves dramatically in response to almost any news. Gossip on Twitter, legal rulings, or even the hint of an upcoming change in the way the digital asset is regulated can all send day-traders scrambling to buy or unload their currency. On the plus side, all of this movement means plenty of chances to turn a profit. At the same time, trading in such a volatile asset means that you’ll need to either be constantly engaged or be willing to sit back and play the long game.

Crypto Is Always On

The cryptocurrency market truly does not sleep. Unlike the stock market, which keeps relatively tame banker’s hours, the virtual currency trade goes on 24 hours a day, seven days a week. That means more opportunities for profitable trades and more chances to swap currencies. Of course, that endless buying and selling frenzy also means that you have endless opportunities to make a mistake. It’s all too easy to get over-heated and reactive in such a jumpy marketplace. Unless you have an experienced professional on your team, it can be difficult to navigate the ups and downs of a market that just does not pause.

What Are the Dangers in Self-Trading Cryptocurrency?

Every form of investment carries some risk, and crypto is no exception. Cryptocurrency is highly complex. Besides bitcoin, there are more than four thousand different virtual currencies on the market, each with its own backers who can spin a convincing story about their currency’s likely rise. The extreme volatility associated with crypto can make it hard to untangle truth from fiction since it’s easy to get distracted by a temporary surge or fall. A general lack of regulation in the market may make it easy for anyone to buy and sell, but it also leaves novice traders exposed to significant risks. This was less of a concern when hedge funds dominated crypto investment, but as individual investments are on the rise, it’s realistic to be more concerned about fraud and theft targeting unprotected new investors. In Canada, governments have recently tightened regulations for this very reason, warning that “unregistered crypto asset trading platforms expose Ontario investors to significant risks, including potential loss, theft and misuse of their assets. The recent explosion of unregistered platforms has magnified these risks.”

Can Assisted Trading Mitigate These Dangers?

Working with the experienced staff at Coin IRA, a registered, licensed institution since 2017, gives you the tools you need to make your investment smooth, efficient, and accurate. An experienced trader can guide you at every step, protecting you from accidents or losses resulting from trading mistakes, which are impossible to correct.  Established platforms, processes, and settlement processes can protect you from missteps that even the most experienced do-it-yourselfer can fall subject to.  Instead of teaching yourself how to trade Bitcoin by poring over white papers and analyzing every new platform or exchange that pops up, you’ll have expert guidance to help educate you and execute your trades in real time with you right there on the phone for final pricing approval.

Security and Peace of Mind

Assisted trading with an experienced firm like Coin IRA will provide you with an extra layer of security. You’ll receive guidance on selecting the best custodian for your IRA, reliable wallet providers for your non-IRA transactions. and best practices for protecting the "keys" to your cryptocurrency. Coin IRA's Cryptocurrency Sales Specialists are patient and attentive to your individual needs. You’ll also receive confirmation of every transaction carried out, and you’ll be live by telephone with a trader during the transaction itself. Most of all, working with an experienced trader will give you the benefit of a steady, experienced hand at the wheel, guiding you and protecting your investments.

Investing Through Coin IRA

Adding cryptocurrency to your investment portfolio will open up new avenues of possibility, whether you plan to use the investment to fund your retirement or to achieve a different venture. The experts at Coin IRA will be your personal guides through every step of your new adventure into the exciting and lucrative world of cryptocurrency!
Man pointing to blockchain

Blockchain Is Your Friend: A Primer on Blockchain Explorers

Just for a moment, imagine what it would be like if you tried to find what you need on the Internet without a search engine like Google, Bing, or Yahoo. For most people, it would be quite a challenge, to say the least. Just as there are search engines to help us discover what's available on the Internet, there are what's known as blockchain explorers (or sometimes block explorers) to help users navigate the blockchain. This might sound like an odd concept, but once you've learned the basics of blockchain explorers — or perhaps even tried out some of the ones on our list of recommended blockchain explorers — you should soon see the utility that these essential tools can offer. So, are you ready to do some exploring? Here we go!

Offering Transparency

One of the most important advantages of blockchain technology is the transparency that it provides to users. The transactions made on a blockchain are stored permanently on a record/ledger that's open-sourced and viewable anytime, anywhere by any interested party. That might sound daunting but consider the implications. The level of transparency offered on the blockchain can help to reduce fraud and illegal activity generally. And for the non-fraudsters out there, you should be able to track your transactions since they're all permanently recorded. But how? That's where blockchain explorers come in. Just as a search engine can help you track down nearly any type of information you're looking for in the tangible world, a blockchain explorer can quickly assist you in locating the details of transactions that took place on the blockchain of most well-known cryptocurrencies.

How Does a Blockchain Explorer Work?

You don't have to know all of the technical details of how a blockchain explorer works, but it's essential to at least have a basic understanding. To put it simply, a blockchain explorer collects bits of information from a network by using an application programming interface or API and a blockchain node. After extracting as much data from the network as possible, the node interface will then store and arrange that data. Finally, the software will and present the data to you, the user, in a searchable format. Once you've accessed a blockchain explorer, you should be able to quickly search for and explore data about the mined blocks and/or transactions on the blockchain of your choosing. Typically, you won't need anything fancier than a normal web browser and Internet connectivity to access a blockchain explorer. What you'll see varies from one blockchain explorer to the next, but oftentimes you'll see a screen displaying a live feed of blocks as they're being mined, with a particular focus on the most recent blocks and transactions. And, just like you'd see in an Internet search engine, you'll most likely find a search box in which you'll usually be able to enter an address, block, or transaction that you're looking for. Or, if you'd rather just browse, it's not unusual to see a list of the latest blocks and/or transactions right on the home page.

What Can You Do on a Blockchain Explorer?

Whether it's Bitcoin, Ethereum, or another popular blockchain, you should be able to dive in almost immediately and discover potentially important bits of information with a blockchain explorer. Typically, a blockchain explorer will allow you to:
  • Track the transaction history of any wallet address on the blockchain that you've specified
  • View recently mined blocks
  • Discover unconfirmed transactions on a blockchain
  • Check for double-spend transactions
  • Find out find who successfully mined a particular block
  • Identify "orphaned" blocks that aren't attached to the main blockchain
  • Track down the "genesis" or original block of a blockchain
  • Look for the mempool-size, or the aggregate size of unconfirmed transactions in bytes
  • See other minutiae such as transaction fees, blockchain difficulty, and hash rates
Some blockchain explorers will even let you seek out the largest transaction of the day — perhaps you can find that big-money "Bitcoin whale" you've been looking for! Just keep in mind that each blockchain explorer is different, and sometimes they're specific to one or more blockchains. For example, you probably won't find much success if you try to use a Bitcoin blockchain explorer to locate data on the Ethereum blockchain.

Start With These Block Explorers

Ready to take a chance and see what's out there on the blockchain? If so, then we invite you to try any or all of these popular blockchain explorers. Blockchain.com Explorer: This is one of the most popular Bitcoin block explorers available today. Here, you'll find the usual search features (latest blocks and transactions, mempool-sizes, and so on), but you can also access more specific details like ownership by time held, daily active addresses, and concentration of retail investors versus "whales." BlockCypher: The interface here is super-simple and uncluttered, but that's the beauty of BlockCypher. The front page serves up the specified blockchain's recent blocks, current fee estimates, and latest transactions, and a search bar can take you to specific information pertaining to a handful of blockchains, including Bitcoin, Ethereum, Litecoin, and Dogecoin. BlockChair: This one's reminiscent of Google's home page as it displays a big, prominent search field front-and-center. Probably the most significant feature of BlockChair is that it allows you to search for transactions, addresses, blocks, and even embedded text data on 17 different blockchains. TokenView: Imagine being able to explore the transactions of more than 100 different cryptocurrencies. This is actually possible, believe it or not, with TokenView. This blockchain explorer is a veritable gold mine of information, including daily trading volumes, lists of pending transactions, the number of active wallets, block reward winners, and more.

Making the Blockchain Your Friend

Regardless of your level of expertise, you can make friends with just about any blockchain — it's just a matter of getting to know it better, and blockchain explorers give you the tools and the information you'll need to do just that. And when you're ready to really step up your crypto game, be sure to check out Coin IRA, a fully compliant and licensed institution guiding you through safe buying, selling, trading, and storing of Bitcoin and other cryptocurrencies.
Bitcoin symbol against stock market graphs

Owning Bitcoin vs Grayscale Bitcoin Trust — What’s the Difference?

Unlike stocks which are almost always bought through and held by a brokerage, cryptocurrencies like Bitcoin offer much more flexibility. They can be bought and held on an exchange like Coinbase, held in a personal wallet without a custodian, and they can even be traded directly between people. One method of buying Bitcoin that has caught the attention of many investors is the Grayscale Bitcoin Trust - a fund that behaves just like a stock that is intended to allow investors to get price exposure to Bitcoin without owning actual Bitcoin. Is buying shares in a Bitcoin trust like the one offered by Grayscale the right choice for you? Read on as we go over the pros and cons of buying Grayscale shares versus owning actual Bitcoin using a company like Coin IRA.

Grayscale Bitcoin Trust – What Is It, and Who Is It For?

The Grayscale Bitcoin Trust (GBTC) is a fund that trades on the OTCQX market, the highest quality tier of OTC markets that offer trading in companies that are not listed on traditional exchanges. The fund buys and holds a set amount of Bitcoin and then maintains a balance of Bitcoin held on deposit for each share of the fund. According to its official website, each share of GBTC represents 0.00094716 BTC. Currently, there are two ways to invest in GBTC. The most direct route is to purchase them on the OTCQX.  Alternatively, accredited investors may periodically be able to invest in a GBTC "Offered Product" which may come at a preferable price but has fairly steep entry requirements. Namely, the Offered Product sale is only available at certain times, requires investors to be accredited, and has a $50k minimum investment. As with mutual funds and some ETFs, Grayscale charges an annual fee of 2%. Additional fees you might see from buying GBTC could include brokerage commission fees. Not all brokerages – especially discount ones – support OTCQX market trades. Who is the right audience for GBTC?  Since GBTC behaves more like a stock, it makes sense for those that only want to interact with stocks and stock-like funds. A person could have tax or other financial liability concerns when dealing with Bitcoin. By wrapping the Bitcoin inside of an exchange-traded investment, an investor can insulate themselves from making contact with the real cryptocurrency. GBTC may also make sense for those looking to make quick or short-term trades. However, an investment platform like GBTC will definitely not be for everyone. With its 2% annual fee, potential commission fees, and minimum investment requirements to get the best deal, those looking to avoid fees and high barriers to entry might want to avoid GBTC. As its annual fee is recurring (you pay it every year), those with a long-term investment horizon stand to lose a significant portion of their investment just from fees. Finally, buying GBTC does not provide much in terms of tax incentives. You can expect to pay full capital gains taxes as you would with any other stock or ETF.

Owning Real Bitcoin 

While indirectly investing in Bitcoin through something like GBTC may come with a few convenient features, there is a multitude of reasons why owning real Bitcoin through a company like Coin IRA might be better for you. The first and most important thing we need to consider is the cost. While investing in a managed fund like GBTC comes with regular annual fees and high upfront minimums, Coin IRA has a one time fee at the time of purchase, not a recurring fee, and charges nothing at the point of liquidation. The 2% annual fee that Grayscale charges may not matter to those looking to quickly buy and sell shares in search of short-term profits. However, for those looking for a long-term investment a recurring 2% fee can greatly impact their bottom line. Next, let's review the tax implications. Buying and selling any type of share on a stock market will create immediate taxable events. Strategies that involve regular buying, selling, and re-buying will face the brunt of this reality as the tax bill at the end of the year piles up. Investment accounts such as 401(k)s and IRAs operate in a manner that is highly tax-efficient. These accounts allow you to shelter your earnings from taxes for years or even decades, allowing them to grow unencumbered. And with digital assets like Bitcoin, taking a long-term approach is likely going to produce the best results. Finally, it's important to think about the difference between owning actual Bitcoin versus having shares in a Bitcoin fund. With Coin IRA, investors actually own Bitcoin or a number of other available virtual currencies, not some derivative, and owning Bitcoin in your IRA comes with even more advantages including institutional-grade, segregated, multi-asset cold storage for full custody for your digital assets.  Your IRA assets are also protected by crime insurance that covers internal and external theft on assets held in the care, custody and control of the custodian's chosen storage provider.  You can gain peace of mind knowing your digital currencies are protected with a combination of advanced security practices and a suite of customized insurance solutions.  While there are no requirements for understanding how to secure Bitcoin and keep it protected from hackers, viruses, and other digital threats when you opt for GBTC, ultimately you still own a derivative of Bitcoin, not the real thing. And with Coin IRA, IRAs are established with a professional custodian and guided by experts that have years of retirement experience.  It's never too late to start a long-term, growth-focused strategy with Bitcoin – no matter what the price is today.

How Should You Invest in Bitcoin?

Each investor is different, so you will need to weigh the pros and cons of GBTC and direct Bitcoin ownership against your own investment goals. However, it is logical to say that if your goal is to make quick, short-term trades against the price of Bitcoin without actually holding any, a Bitcoin fund like Grayscale might be appropriate for your strategy. Depending on the type of funds (qualified retirement funds or regular savings) you want to use to make your purchase, you may elect to buy Bitcoin and hold it yourself.  Just keep in mind that with this strategy you will need to be responsible for keeping your Bitcoin safe.  Any security failures could result in the total loss of your investment. Finally, if you are investing for the long term and want to allow your investment to grow without an immediate tax burden, you may find a lot more benefit to your bottom line by allowing the experts at Coin IRA to present your options and guide you to the finish line.
Bitcoin graph rising and falling

How Much Will Bitcoin Be Worth In 2030?

The movement of Bitcoin’s price is in the limelight of the investors’ community nowadays. Admittedly, Bitcoin’s behavior has never been predictable, but this intense interest seems to have been escalating over the past several years. The reason is pretty clear: nobody expected that Bitcoin would become such a globally influential event, let alone an asset. This virtual currency became equally popular among high-grade institutional investors and eager individuals, so frequent ups and downs don’t tend to affect its influence on the world’s economy. Therefore, near-future predictions about Bitcoin are quite a thrilling topic to discuss today. This article will combine scientific analyses with experts’ opinions in order to provide a reasonable expectation for Bitcoin in 2030. Furthermore, we’ll cover some of the previous price predictions so that you can see to what extent the viewpoints can differ when talking about cryptocurrency.

A Brief History of Bitcoin’s Price

Can you imagine that it has been just over a decade since the decentralized concept of Bitcoin was introduced to the world? It all started in 2009, when the anonymous genius Satoshi Nakamoto published a link to a white paper called Bitcoin: A Peer-to-Peer Electronic Cash System, heralding a new wave of financing that excludes all layers of intermediaries and time-excessive transactions. It wasn’t an easy way for Bitcoin to receive any sort of public recognition. Interestingly enough, its first denominational value against the American dollar was with a symbolic rate of  US Dollar = 1,309.03 BTC. Gradually, Bitcoin received more and more attention, and between 2010 and 2017, its price ranged between $2 and $1,200. However, we aren’t talking about an upward price trend here. On the contrary, Bitcoin prices could rapidly shift in both directions within a single month or even a day. As an illustration, in October 2017, the exchange rate of Bitcoin was under $5,000,then reached an all-time high of $20,000 in December the same year and suddenly dropped to $7,000 several months later. The pandemic outburst in 2020 forced people to orient towards digital space, which naturally led to the Bitcoin boom. No single day would pass without Bitcoin making headlines. The new digital era may have added to Bitcoin’s huge demand, but it doesn’t seem to have brought any price stability. For example, in April 2021, Bitcoin reached a jaw-dropping value of $63,000 but a single tweet from Tesla’s CEO Elon Musk was enough for an unfortunate, almost double fall. Was anyone even close to predicting this?

Previous Predictions

It’s astonishing how experts’ predictions for 2020 varied. One of the most interestingly wrong ones was the prediction of the (late) famous entrepreneur John McAfee, who claimed that Bitcoin will reach $1,000,000 by 2020. McAfee stated this in July 2019 and what’s more, he was really assertive and confident in his over-optimistic forecast. On the other end of the spectrum, the influencer Robert Schwertner shared a considerably pessimistic prognosis in January 2020 for the ongoing year, where he claimed that Bitcoin had no future. Despite these drastically inaccurate statements, some experts got quite close. The predictions of Alexander Zaidelson, Beam CEO, and Danny Scott, CoinCorner CEO were almost 100% accurate, showing that we still can rely on crypto experts’ opinions. 

Experts’ Opinions: Bitcoin in 2030

Short-term negative fluctuations of Bitcoin’s price shouldn’t discourage you. The predictions for 2030 are generally favorable. To be on the safe side, we’ll focus on the most plausible ones.  Tyler Winklevoss, one of the famous Winklevoss twins and owners of Gemini, claims that Bitcoin will soon replace gold as a leading store of value, getting close to its market cap of $9 trillion, which means that Bitcoin has a real chance to hit $500,000 by 2030. The first investor in the popular social media app Snapchat, Jeremy Liew, projects Bitcoin’s value in 2030 at the same amount as Tyler Winklevoss:  $500,000. Liew, whose fortune is estimated at $2 billion, is involved in the crypto business as an investor in LedgerX, a reputable hardware wallet. This opinion is also supported by Peter Smith, owner of another Bitcoin wallet company called Blockchain. Smith’s forecast for the value of Bitcoin in 2030 dates back from 2017. He’s been right on track so far. Kay Van-Petersen, a Danish bank analyst, doesn’t have expectations that are as high. He predicts a potential Bitcoin value of $100,000 per unit before 2030. Van-Petersen is a Twitter business influencer with proven expertise in online investments. This opinion is far from pessimistic, but it sounds more reasonable than $1 million forecasts.  

Scientific Analyses: Bitcoin in 2030

As accurate as they may turn out, Bitcoin’s price predictions by crypto-savvy experts are emotionally-driven personal assumptions. Let’s direct our focus to the scientific instruments that project the forecast based on the existing pattern of Bitcoin’s movement.  You’ve heard that mining is the initial method of acquiring Bitcoin. The reward miners get when they generate a new piece of Bitcoin (solving complex math problems) is known as a subsidy. The subsidy amount is divided by two every four years. Originally, it was 25 BTC, but it’s dropped to  6.25 BTC by this point. By 2028, halving will reduce the mining reward to 1.5625 BTCT. This process is called Bitcoin halving, and the next one is expected in less than two years. Each time a halving occurs, there is unmistakable growth in Bitcoin’s price. This is closely related to using the stock-to-flow mechanism, which existed long before the rise of cryptocurrencies, as an indicator for determining the commodity’s price. This mechanism determines how much Bitcoin is presently circulating against its currency production, corresponding with the supply-demand system of the halving ratio. According to the standard line graph, Bitcoin is likely to surpass the psychological barrier of $1,000,000 before 2030. Provided that there is a total supply of 21 million BTC (around 4 million out of the total supply is considered gone forever as a result of irretrievably lost private keys), and only a limited proportion of the circulating Bitcoin is liquid (since the majority of Bitcoin investors keep their assets for ages), this model predicts a sky-rocketing demand for Bitcoin.

Final Thoughts

The positive predictions of Bitcoin’s future are powerful enough to reshape our hesitating attitudes towards the blockchain industry. However, there are many external factors that could interfere with the rising trend of Bitcoin, varying from global politics to hidden business interests. Certainly, you shouldn’t ignore any of the possible scenarios, but the final decision for investing in Bitcoin must be based on your personal investment goals and business instincts.  More particularly, if you believe that Bitcoin’s heyday has already gone and somehow you missed out grabbing a piece when you had a chance, there is a broad spectrum of other altcoins to consider. These include prevalent ones like Ethreum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), and Stellar (XLM). However, if you stick to the belief that Bitcoin’s time is yet to come, do not wait for a second longer and find a well-suited marketplace for your future long-term savings.   Whichever belief you hold, you can always count on Coin IRA to provide clear options and to facilitate your ultimate decision. Now that you have a clear understanding of Bitcoin’s forecast, it’s time to see for yourself that investing in crypto has never been easier, especially when our team stands behind your long-term investment plan.
Bitcoin gold token

Seven Ways Bitcoin Can Benefit Everyone

Bitcoin is the leader in a new technology wave. Until now, only banks could create currencies. Now anyone can create what is called a 'token' to use for a myriad of different purposes; some could be to keep health records, to monetize watching advertisements, or to easily send money to a foreign country. Up till very recently, cryptocurrencies were the province of geeky individuals – the average investor kept to more mainstream assets for their retirement portfolio. However, in the past few months, institutions and high-profile public figures like Elon Musk have been buying large amounts of Bitcoin and other cryptocurrencies. Many conventional investments have delivered very poor returns recently, but had you invested in Bitcoin and the cryptocurrency sector you'd have seen your investments skyrocket – BTC up 160% in 2020, compared to S & P 500 13.73% and gold 21.6%. So now Bitcoin is for everyone who needs to invest in their future. If you’re one of those people who have heard about Bitcoin but can’t decide if you’re going to invest or not, you’ve come to the right place. Here are some reasons why you should buy Bitcoin, preferably via Coin IRA, which is an easy route to owning the asset.

Bitcoin Is a New Asset Class

Asset classes are things like gold, real estate, as well as stocks and bonds. Cryptocurrency has now become part of this group because of Bitcoin’s amazing return on investment (ROI). Major corporations like TESLA have invested in Bitcoin, so many people are confident that they have made the right choice. It won't be long before Bitcoin is a normal part of many people's investment or retirement portfolios. Investment advisers say that a diversified portfolio is best – and what better way to diversify than to add another asset class?

Bitcoin Is Resilient

External events like a stock market crash shouldn't affect Bitcoin. It is not surprising because Bitcoin is created to avoid these scenarios, including real estate and traditional money system problems. There are many people who are putting some of their money in Bitcoin because they see it as a “safe haven” - like gold - in case their other investments tank.

Bitcoin Is Limited

This is the reason why it has risen its value. Bitcoin can’t be printed, unlike regular money. The cryptocurrency is limited to 21 million. This property is not seen negatively. Scarcity value drives the price up as more people buy crypto – so Bitcoin is for everyone. You need to invest in it now as there will not be enough for everyone who wants it.

Confiscation Is Impossible

Fiat currency can be frozen by the bank, depending on where you live. For example, in Cyprus a few years ago, there was a financial problem, and the banks took 10% of everyone's deposits. You don’t have to worry about these things because it will never happen to cryptocurrency. It is not dependent on central banks and even the government so. They have no control over it. The only person who has control over your digital money is you.

Central Banks Can Not Be Trusted

If you think back to the banking crash of 2008, central banks all over the world created billions in currency as “helicopter money” to drop into the banking system to ensure liquidity. That means that your own dollars essentially lost value. We don't know if a further crisis will force the Fed to do something similar again. The idea of a cryptocurrency that can't be devalued by a central organization is becoming more attractive and more useful by the day for wise investors.

Technological Barriers Are Disappearing

It is getting easier to buy and store Bitcoin. Previously you needed to be quite a geek to manage to invest successfully. This was stressful, and if something went wrong you might lose access to your coin hoard (note that Bitcoin cannot be 'destroyed' because they all remain on the blockchain, but it is possible to lose access to them – however Coin IRA is a way to avoid this issue). Coin IRA is a pioneer in offering Cryptocurrency IRAs, providing an excellent customer experience in guiding you through safe buying, selling, trading, and storing of Bitcoin and other cryptocurrencies. The portfolio includes Bitcoin and Ether, the No.1 and No.2 cryptocurrencies, and six other major currencies including Litecoin (LTC) and Dash (DASH), and a new and exciting “Decentralized Finance” or DeFi coin called Chainlink (LINK).

Bitcoin is not Counterfeitable

One of the issues with conventional assets is they can be faked. Dollars can be counterfeited. Stocks can be devalued by the company issuing more of them. In recent years there has been suspicion of some gold ETFs, that there isn't actually the right amount of gold in them – that is they aren't really backed by enough physical gold in a vault. Those investors could lose out. Nobody has managed to counterfeit even a single “Satoshi” (the smallest division of bitcoin, a millionth of a coin). It simply isn't possible because the decentralized ledger – the blockchain – is verified on millions of computers worldwide. This gives cryptocurrencies a considerable advantage over regular asset classes.

Now Is the Time to Invest in Crypto

Now is the time to add some cryptocurrencies to your investment portfolio. Bitcoin was developed with the goal of letting people control their individual economies. This objective is now happening globally, providing citizens with outstanding benefits.

Bitcoin for Everyone

So really, Bitcoin is for everybody. It certainly changes the world of investment. For years major financial institutions laughed at Bitcoin or called it a scam. Now they are rushing to set up cryptocurrency investment divisions, buying Bitcoin in large amounts, and looking for the most innovative projects to put money into. If you choose to take control of your destiny and invest in Bitcoin, you’re doing the right thing. Talk to a representative at Coin IRA to learn how to diversify your retirement investments with this exciting new asset.
Wallet with Bitcoin tokens

Virtual Wallets and Cryptocurrency Investments

The 21st century has been remarkable for the rapid advancements in information technology, and consequently, it is fulfilling the dream of a digitized world. The novel coronavirus outbreak and the lockdown restrictions have been an eye-opener to the need for digitization and virtual interactions. Of course, money and value exchange are at the heart of human interactions and certainly aren't left out of this revolution. From automated teller machines (ATMs), mobile banking, electronic transfers, digital currencies, and now virtual wallets, banking has been rapidly digitized worldwide.

What Are Virtual Wallets?

A virtual or digital wallet is essentially a broad term that mainly refers to a smartphone, desktop, or notebook compatible application that helps store credit card information, send, receive and save money, and overall performs banking services through secure wallet passcodes or pins. Digital wallets have been around for about two decades; however, the popularization of smartphones in the past decade was mostly responsible for the tremendous global usage surge. Before 2008, virtual wallets were restricted to fiat (paper) currencies; however, after the Wall Street financial crisis in 2008, an anonymous author, Satoshi Nakamoto, published the Bitcoin whitepaper, a path that ultimately unleashed cryptocurrencies.

Types of Virtual Wallets

Today, virtual wallets can be broadly classified into fiat and cryptocurrency wallets.

Fiat Virtual Wallets

Fiat virtual wallets allow users to send, receive, save and conduct a wide range of transactions using fiat currencies only. Fiat currencies are government-issued currencies and are regulated by the central banks; they include the US dollars (USD), Euros (EUR), Japanese Yen (JPY), basically any country’s currency that comes to mind. There are thousands of Fiat wallets, and the notable fiat virtual wallets include Paypal, Cashapp, Walmart Pay, Apple Pay, Transferwise, and Wirex.  In October 2020, one of the largest fiat virtual wallet merchants, Paypal, announced plans to enable users to hold, sell or buy cryptocurrencies in their wallets starting from January 2021. This decision is not surprising considering the massive surge in crypto; expectedly, other fiat virtual wallets would consider adding crypto wallets to their portfolio.

Cryptocurrency Wallets

In the past decade, Bitcoin and cryptocurrencies' growth has been incredible and mostly unpredicted. From that insane idea of decentralizing money transfer and conducting money transfer on a peer-to-peer basis, cryptocurrencies have grown from not just another means of money transfer but also a store of value as well. Bitcoin is steadily growing to become more popular than gold or crude oil as people seek to insulate themselves from failing economies globally. So what is a cryptocurrency wallet? As you may have probably guessed, a cryptocurrency wallet is a virtual wallet that allows users to hold, buy or sell cryptocurrencies. However, unlike traditional fiat wallets, cryptocurrency wallets are decentralized, hence, much more sophisticated. Crypto wallets have these two main features. Cryptocurrency wallet address: A cryptocurrency wallet address is a string of alphanumeric characters (25-35 characters long) that uniquely identify different wallets. If you’re familiar with PayPal, a wallet address is much more like an email address used by different users to send and receive money. Private key: A private key is a unique identification that grants you access to your wallet. Much more like the key to a safety deposit box, a private key allows users to open their wallets, send, or receive a cryptocurrency. Private keys take many forms, usually a set of cryptographically generated alphanumeric characters, and they can be stored or kept in various means.

Types of Cryptocurrency Wallets

There are two broad places where you can keep your crypto; a hot wallet and a hard wallet. Hot Wallets Essentially, the difference between hot and cold wallets is that hot wallets are connected to the internet. Hot wallets are free and are by far the most common type of wallets, and they can conduct basic transactions as swiftly as possible. Cold/Hard Wallets Cold wallets, though less used, are much more secure wallets for storing Bitcoins and other cryptocurrencies. A cold wallet keeps the user's wallet address and private key away from the internet, making them insulated from any potential internet hack or critical theft.

Securing a Cryptocurrency Wallet

Investing in Bitcoin has been on the rise in the past couple of months, with institutional investors like Grayscale, Microstrategy, and Tesla diving into Bitcoin investment. It's certainly no surprise to see Bitcoin rise from a 2020 low of $3,850 to $50,000 in less than a year. While the underlying blockchain technology itself is a tightly secure and immutable ledger that is theoretically impossible to hack, fraudsters and hackers have occasionally found a way to attack exchanges and private wallets to steal cryptocurrencies. Phishing scams, 51% attacks, key theft, and Sybil attacks are notable routes of attacks over the years. So how can you secure your crypto wallet? Here are a few ways to insulate yourself from fraudsters. Two-factor authentication (2FA): You may already be familiar with a two-factor authentication concept. If you're not, it's pretty simple; 2FA is an additional layer of wallet security that requires users to provide a one-time password (OTP) before accessing or sending cryptocurrencies on the wallet. The OTP is usually a four or six-digit number sent to your registered mobile number, email address, or both. Hard wallets: As explained earlier, a hot wallet is quick and free; however, hard wallets protect you from online private key thefts. Trezor hardware wallets are by far the most common types of hard wallets, and they allow you to securely keep your private key, wallet address, and a wide range of cryptocurrencies away from the internet.

Make Your Crypto Decisions with Coin IRA

At this point, you probably have a few questions on crypto investment; What coin is the best? Which wallet should I use? How safe is Bitcoin investment?  Should my retirement plan involve crypto? Chances are all your questions won't be answered in a five-minute read or the tons of unfiltered information on the internet. Coin IRA is leading the charge for Cryptocurrency IRAs, especially if you're looking to diversify from traditional financial assets like stocks and bonds into cryptocurrency. Coin IRA has established relationships with pioneers in the cryptocurrency markets and reputable IRA consultants to bring cryptocurrency investment plans to a wide range of users. With Coin IRA, your investments are managed by some of the most brilliant minds in the cryptocurrency markets, and you can leverage strong market momentums without any stress. Coin IRA guarantees secure storage of all crypto investments with various partnerships with the industry's security leaders to protect your hard-earned assets. Making investment decisions are a crucial part of an enjoyable future; hence, the need for IRAs. In a world that is rapidly drifting towards digitization, if you’re looking into cryptocurrencies, Coin IRA has your answers.
Digital currency metal litecoin coin on the gold bitcoins.

Litecoin vs. Bitcoin: Is Litecoin the “Silver” to Bitcoin’s “Gold”?

The fact that there are over 4,000 cryptocurrencies out there is a clear indicator of the rapid growth of the crypto market. Admittedly, a great number of the newly-released coins decay as fast as they appear, leaving no significant mark behind. However, some of them have managed to cope with early-stage challenges and gain a firm position in market-cap charts. Still, all successful altcoin stories seem to be perceived in reference to Bitcoin (BTC). It’s quite understandable, as Bitcoin’s features and behavior provided the basis for the initial development of the entire blockchain industry. One of those successful examples is Litecoin (LTC). It was launched in 2011, only two years after BTC. In this article, we’ll focus on the similarities and differences of BTC and LTC from several aspects. Before we set off, note that this isn’t a competitive comparison, as Litecoin wasn’t invented with the purpose of dethroning Bitcoin. On the contrary, with improved accessibility and transaction speed, Litecoin aims at enhancing Bitcoins’ effort for a more natural environment as a value reserve. Let’s examine the way they do this. 

The Histories of Bitcoin and Litecoin

The idea of decentralized finance was actualized in the late 1990s, but it wasn’t until 2009 when the pseudonymous author (or team) of Satoshi Nakamoto introduced this new concept to the public by sharing the link to the whitepaper Bitcoin: A Peer-to-Peer Electronic Cash System Bitcoin was the first cryptocurrency traded without an intermediary to control asset flow and transactions. According to the creator(s), the invention of Bitcoin resulted from the need for “an electronic payment system based on cryptographic proof instead of trust”. Despite the hardships Bitcoin has faced - including sharp price fluctuations, cyberattacks, and public hesitation - it turned into a significant global, financial phenomenon of the 21st century.  Litecoin, on the other hand, was launched in 2011, by a former Google employee named Charlie Lee, who saw great potential in the blockchain industry. The new cryptocurrency was created with the clear vision of complementing the new promising concept of an anonymous and trustless financial system. It openly supported Bitcoin’s key objective by improving the blockchain network’s integrity. That being said, Litecoin offered a faster and technically improved version of Bitcoin, which was making its way towards mainstream recognition.  However, it wasn’t an easy road for Litecoin either. The system experienced serious network issues and it seems that trust from the community wasn’t fully secured until 2013, following the release of the 0.8.5.1 Litecoin. Litecoin has kept its position among the top ten ranked cryptocurrencies in terms of trading volume and market cap in the past several years.

Similarities Between Litecoin and Bitcoin

In addition to a shared vision, quite a few similarities between Bitcoin and Litecoin are observable at first sight. The way they complement each other is compared to gold and silver.

Proof of Work System (PoW)

Both Litecoin and Bitcoin operate on a proof-of-work model as a secure method to prevent double-spends. In a nutshell, this system stands for a method by which altcoins are acquired through mining. It includes generating, authenticating, and adding the cryptocurrency to the blockchain ledger. Litecoin and Bitcoin’s PoWs systems aren’t identical, but they do share the fundamental features.

Transactions and Storage

According to users, the Litecoin transaction execution reminds them of what they’ve already experienced on the Bitcoin blockchain. Both cryptocurrencies can be purchased on a crypto exchange platform or rig-mined. Furthermore, both require a digital or hardware wallet to ensure the safe storage of users’ funds before and after the transaction process. We can also note that both Litecoin and Bitcoin have gone through critical price volatility caused by the general public demand. This has also created the need for applying local finance and anti-money laundering regulations.

Differences Between Litecoin and Bitcoin

Similarities between Litecoin and Bitcoin are mainly what we consider to be core operating principles. The list of differences between these cryptocurrencies is slightly longer.

Market Capitalization

The most distinctive dissimilarity between Litecoin and Bitcoin lies in their market cap, which indicates the asset’s value on the market based on the number of outstanding coins multiplied by the current coin price. As of the early months of 2021, Bitcoin’s value has been $1 trillion, which is incomparably higher than the Litecoin value of $13.7 billion. There are several factors contributing to this huge price gap. The time factor is perhaps the most obvious one, but it’s not the main reason why Bitcoin has been superior concerning market cap figures even to the second-largest cryptocurrency Ethereum, whose market cap has been estimated at $475 billion. It’s the role of Bitcoin as a cryptocurrency leader that has generated such a far-fetched cap record score.

Total Supply

Another distinguishing point of utmost importance is the total number of assets that each coin can produce. The Bitcoin system is designed not to exceed the number of 21 million “pieces” of Bitcoin, whereas the total supply of Litecoin can go up to 84 million. This may appear as a point for Litecoin due to the psychological perception of buying whole units for a lower price.  However, it doesn’t really mean much in real-life trading since both Bitcoin and Litecoin can be divided into smaller units. Bitcoin’s “cents” are known as satoshis, the lowest fraction to which Bitcoin can be “broken into”. One Satoshi equals one-hundredth millionth of a Bitcoin. Litecoin applies the same math, but its smallest units are called Litoshi. 

Speed

Even though both networks deliver real-time transactions, transaction speed was one of the imperatives in the creation of Litecoin, so it outperforms Bitcoin in the time required for transaction confirmation by the counterpart participant. In numbers, the average confirmation time of Bitcoin is nine minutes per transaction. This includes all courses of action during which the code is verified and recorded on the blockchain, for which Litecoin requires only 2.5 minutes.  The transaction speed factor is undeniably advantageous for the overall image of Litecoin, but it’s not the deciding one when choosing your potential asset for investment. 

Algorithms

What was described above as a general similarity between Bitcoin and Litecoin regarding the PoW system does in fact contain certain differences on a more technical level. To begin with, Bitcoin and Litecoin use different cryptographic algorithms. The former employs the traditional SHA-256, while the latter employs a relatively new Skrypt algorithm. This affects the mining process since, in both Bitcoin and Litecoin, the process of acquiring coins by mining requires a great amount of computing power.  As of 2021, the mining reward on Bitcoin’s blockchain is 6.25 BTC. They appear every ten minutes and secure the predictive character of Bitcoin’s supply by automatically adjusting the difficulty of the SHA-256 equations. Litecoin applies Skrypt, a memory-intensive hashing algorithm that was created with the purpose of deterring ASICs and GPUs, making the Litecoin network accessible to personal users, which is the target audience of Litecoin. In the beginning, all users were allowed to mine LTC with their CPUs, but now there are Skrypt-compatible ASICs as well.

A Few Words Before You Go...

We hope that we conveyed the main points you should consider when comparing the features of LTC against BTC. Litecoin is a complement to Bitcoin rather than a direct competitor on the market. Therefore, it’s impossible to pick a winner or imply in any respect as to which one is better investment material. Litecoin tends to be a more practical medium of exchange while Bitcoin has turned out to be a well-established store of value. The choice depends on your personal trading preferences and your purpose as a potential crypto investor. If this article managed to spike your interest in the prospects of crypto investments, contact our experienced Coin IRA team. They’ll help you decide on the best crypto path for your individual preferences and needs.
Cryptocurrency - Word cloud sign.

Making Sense of Cryptocurrency Terms

Cryptocurrency has a rich vocabulary to say the least. The slang, jargon, and acronyms associated with crypto trading can boggle the mind. If you’ve ever spent time puzzling over a blog post or trying to decipher a Twitter feed about cryptocurrency, then you already know how frustrating crypto terms can be. And unfortunately, all of the unfamiliar lingo can make some investors nervous. That’s understandable. It’s hard to know how to proceed as an investor when you’re not sure you comprehend the language being used. In point of fact, though, there is nothing magical or mysterious about cryptocurrency. It’s surprisingly easy to understand once you learn some of the common phrases used in the field. This article will demystify some of the more common cryptocurrency terms that get tossed around in connection with the digital asset.

Basic Crypto Terminology, Decoded

What is a node? What is a hard fork? Here are some of the most common crypto terms associated with the blockchain and the currency itself. Altcoin: A cryptocurrency other than Bitcoin. Bitcoin, which first appeared in 2009, is the oldest and best-known form of virtual currency. Other, newer cryptocurrencies, like Litecoin and Ethereum, are known as altcoins. There are thousands of altcoins currently on the market. Blockchain: An immutable digital ledger containing a full record of all of the transactions that have been carried out using a given cryptocurrency. The data on the blockchain is stored in a series of blocks of a fixed size. A blockchain functions like a huge, encrypted database. Because it is decentralized, there is no one master copy of the blockchain for hackers to target. Faucet: an app or website that hands out cryptocurrencies to users in return for carrying out simple tasks, like watching advertisements or completing quizzes. The goal of the faucet is to increase public interest in cryptocurrencies by distributing digital currency. Fiat: Currency issued by a government. The US dollar is an example of fiat currency; so is the Euro, the British pound, and the Japanese Yen. Fork: a fork occurs when a blockchain changes the protocol that it uses to verify transactions. This can happen in the (unusual) event of a blockchain being hacked. It can also happen when users have a major disagreement about verification protocols. There are two distinct types of fork.
  • hard fork (or hardfork) will impact the entire blockchain, making previously invalid transactions valid, and making previously valid transactions invalid. A hard fork necessitates a complete, top-to-tail upgrade of the whole blockchain so that the system can stay up and running.
  • soft fork is backward-compatible. The existing nodes will still be able to recognize new transactions as valid and will not need to be upgraded. However, the current miners will need to shift to the new protocol in order for the soft fork to work.
Gas fees: A unit of measurement used on the Ethereum network. “Gas” refers to the amount of computational energy needed in order to carry out each individual transaction. Halving: also known as a “halvening,” an event that occurs approximately every four years which halves the amount of Bitcoin that is created every day. Halvings are a key feature of Bitcoin’s scarcity model and are thought to drive up the cryptocurrency’s value. The next halving will take place in April 2024. Hash rate: Measures the speed at which a blockchain (like Bitcoin or Ethereum) is able to both mine currency and verify transactions. Mining: the process of solving complex mathematical problems (with the help of powerful computers) in order to verify transactions on the blockchain. In return for successfully verifying transactions, the “miner” is given a certain allotment of cryptocurrency. Node: A computer connected to a blockchain. Because the blockchain is decentralized, it essentially consists of a network of nodes, which share access to information on transactions and other data stored on the network. Sharding: A means of breaking up the blockchain ledger so that it is more easily managed by each node. Sharding becomes essential as blockchains grow too large to be carried by most computers. Stablecoin (or stable coin): A class of cryptocurrency that is pegged to a fiat currency or to a commodity, like gold. Stablecoins may be secured by a fiat currency, a commodity, or another cryptocurrency. As the name suggests, stablecoins lack the volatility of most cryptocurrencies. Token: A digital “coin” issued by a given cryptocurrency. Each cryptocurrency has its own tokens, which can be used to trade for other tokens or to buy goods and services online. Tokens are virtual; some sites do sell physical coins, but they have no value as currency. Wallet: A virtual location that investors use to store their virtual currency. A wallet contains a private key, also known as a seed, which allows investors to buy, sell, and trade cryptocurrencies. There are several kinds of wallets.
  • software wallet is housed on a computer’s software files.
  • hardware wallet is a physical device, comparable to a USB drive.

Crypto Investment Terms

If you’re not sure what a whale is — or if you’ve ever wondered what HODL really means — just keep on reading to find out. Note that some of the terms used by crypto investors overlap with the terms that stock traders use. This article focuses on the terms that are unique to crypto. FOMO: Fear of Missing Out. The term is used in everyday life but has a special place in digital currency circles. In crypto terms, FOMO refers to the fear of missing out on an investment opportunity or on a chance to reap profits from a sale. Investors should be cautious not to make risky decisions because of FOMO. FUD: Fear, uncertainty, and doubt. A vague and pointless sense of uncertainty deliberately spread by investors who want to see the price of a cryptocurrency drop. HODL: This term, exotic as it sounds, simply means to hold cryptocurrency instead of selling when the price drops. The term was born when a certain Bitcoin investor posted a drunken rant on a message board. Some people also define the term with the useful acronym Hold On for Dear Life. ICO: Initial Coin Offering. A fundraising opportunity, similar to IPOs, at which a startup sells new cryptocurrency tokens to investors. Pump and Dump: The practice of “pumping” one particular cryptocurrency by buying it in large quantities and motivating others to invest in it, with the goal of increasing its value, only to “dump” the currency to make a quick profit. “Pumping” is sometimes also referred to as shilling. Whale: An investor who owns a very large amount of cryptocurrency. A whale’s sizeable holdings give him a degree of influence over the market.

Cryptocurrency Terms: Is That Everything?

Let’s be clear — this list is not an exhaustive source on all the crypto terms out there, nor will it provide you with everything you need to know in order to begin trading in the new asset. Most of the time, crypto investors do best when they are working with an experienced partner. Don’t let FUD hold you back from taking advantage of the tremendous opportunities that cryptocurrency represents. Contact Coin IRA today to learn more about the potential of cryptocurrency in your investment future.  
Bitcoin stack up and down arrows

Investing in Cryptocurrency IRAs: The Ups and Downs

For folks who are thinking about building wealth for their future, individual retirement accounts or IRAs are a popular way to combine prosperity and security for the long term. IRAs were first authorized in the United States by the Employee Retirement Income Security Act of 1974. Typically, Traditional IRAs allow investors to shore up a larger wealth base through pre-tax contributions, while Roth IRAs are generally funded with after-tax contributions, so that investment earnings may be able to accrue free of taxes. While IRAs have been around for quite a while, self-directed IRAs (as we know them today, at least) are a comparatively modern invention. The advent of Internet-based stock buying and selling in the 2000s made it easier than ever for financial laypersons to take control of their retirement accounts. Today, there are more choices available to self-directed IRA investors than ever before. Indeed, you're not limited to stocks and cash anymore — and with popular cryptos like Bitcoin getting more attention and gaining mainstream adoption, investors often want to learn more about the pros and cons associated with investing in Cryptocurrency IRAs. Perhaps you're ready to ride the crypto wave and enhance your IRA holdings with some digital assets - but first, you want to be sure that you understand the advantages and risks involved. No worries - we've got you covered. So without further ado, let's dive right into the most important pros and cons of investing in Cryptocurrency IRAs.

Cryptocurrency IRAs: The Pros and Cons

The most obvious benefit of a Cryptocurrency IRA is that it would enable you, the investor, to participate in any gains that might occur in digital assets. In one survey, 40% of responders expected that the Bitcoin price will be at least $50,000 at the end of 2021. While there are no guarantees that any cryptocurrency's price will increase, at least you'll get good exposure to the movements in the asset prices through a Cryptocurrency IRA. The next advantage to consider is the diversification that a Cryptocurrency IRA could provide to the investor. As the old saying goes, you don't want to put all of your eggs into one basket — meaning, it's not recommended to pour your entire account into just one asset class. Maybe you've got stocks or cash already in your IRA account. That's fine, but is that enough diversification? Cryptocurrency prices tend to move separately from stocks — and having uncorrelated assets is a key component of proper diversification. In the aforementioned survey, 28% of the respondents stated that their primary reason for buying crypto was due to inflation concerns. As long as more dollars are being printed up, the cash in your IRA is susceptible to inflation, which means the gradual deterioration of the value of that cash. One way to possibly shelter your IRA's holdings against the negative impact of inflation is to own a cryptocurrency like Bitcoin. Since there will only ever be 21 million Bitcoins mined, inflation is less of a concern — and that's why plenty of investors use it as a hedge against inflation. In addition, a Cryptocurrency IRA may offer tax advantages. Without delving into specific tax codes, it may be possible to have your distributions taxed at a more favorable income tax rate once you're retired and earning less (please refer to a licensed and registered tax professional for more information on this topic).

Is Investing in Cryptocurrency IRAs Risky?

Any investment strategy involves risks — as they say, no risks often correlate with no rewards. Still, it's important to be aware of the risk-versus-reward balance when it comes to Cryptocurrency IRAs. There is the possibility of capital loss if the asset in question — in this case, cryptocurrency — goes down in price. But then, you could say the same thing about an investment in any asset class, including stocks. We already touched upon the topic of taxes, and if your gains from a Cryptocurrency IRA are substantial, it at least provides you the opportunity to spread out the income tax liability by taking distributions over a longer term. Some might say that this isn't such a bad problem to have, though. Finally, there's the risk of over-investment if someone were to allocate too much capital into cryptocurrencies. This hazard can be avoided by always maintaining a reasonable position size relative to your account overall.

Special Considerations

Along with the considerations mentioned above, there are a couple of important matters to keep in mind. As the U.S. Securities and Exchange Commission (SEC) explains, you'll want to be wary of anyone offering "guaranteed" returns for your IRA. There's always some degree of risk involved in the world of investing — it's just a matter of knowing those risks, and minimizing them when appropriate. Moreover, the SEC stresses the importance of staying informed — and rightly so. Even if you're using a "set-it-and-forget-it" type of investment strategy, you'll still want to be aware of what's inside of your Cryptocurrency IRA. The key phrase here is "know what you own" — a credo for all informed investors to abide by.

Take Advantage of a Cryptocurrency IRA — The Right Way

Most importantly, you'll want to avail yourself of trusted information sources when you're ready to set up your Cryptocurrency IRA. Ready to get started? It's easy and hassle-free —simply visit Coin IRA, a fully compliant and licensed institution that will guide you through safe buying, selling, trading, and storing of Bitcoin and other cryptocurrencies.  
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