A Motorist’s Guide to Investing in Cryptocurrency with Tax Benefits

A Motorist’s Guide to Investing in Cryptocurrency with Tax Benefits

Bitcoin token with blue SUV car

Let’s look at the possibilities of using a Cryptocurrency IRA to ensure security for your retirement and gaining benefit from the remarkable profits that are available to those who invest in Bitcoin and other cryptocurrencies like Ethereum or Litecoin.  These are not just a new asset class – they are part of a new technology that has vast potential.

In 1885 Karl Benz invented the first motor car: a three-wheel, tiller-steered vehicle powered by a ¾ horsepower single-cylinder engine. Despite many naysayers and its obvious shortcomings, the idea immediately caught on. In 20 years, motor vehicles were commonplace, starting a giant new industry. We are completely familiar with them, but every motor vehicle can trace its ancestry back to that 1885 prototype.

New technologies need to go through an acceptance process to become normalized in society. Advances like this take time. Some people don’t want to get involved with unfamiliar technology. In 1885 horses were the norm, and gasoline-powered vehicles were a strange circus act.

Bitcoin is as revolutionary in financial circles as the motor car was to transport. It has started a “gold rush” to invest in cryptocurrency.  Are you ready to dip your toe in the water?

Let’s say you are a person who needs to save for retirement. Perhaps your previous IRAs have not delivered sufficient returns. Interest rates are low, and conventional asset classes are underperforming. You need to ensure that your money and assets are safe for your family’s future in an unstable economy.

Bitcoin and other cryptocurrencies have delivered staggering profits in the last ten years, beating all other assets in the same way as a Formula One car outperforms a family sedan. Recently, major companies from institutional investors to Tesla have invested in cryptocurrencies and reaped the benefits.

What Are the Benefits of a Cryptocurrency IRA Account?

By investing in a Cryptocurrency IRA with a reputable company, you enable the best protection of your investment, as well as having experts on board to ensure tax efficiency under IRS rules. The cryptocurrency in the IRA will be stored safely in a best-in-class, hybrid, multi-signature digital wallet with military-grade encryption.

Rest assured you will not need to master all of Bitcoin’s intricacies to get started in the same way it is not necessary to know how to fix your car’s engine to obtain the benefits of personal transportation. The Crypto IRA experts at Coin IRA will take care of that.

What is important to know is that the backbone of cryptocurrencies is the blockchain, which is a ledger or “Decentralized Ledger Technology” (DLT) that is validated by many computers in a peer-to-peer network, making it very robust and tamper-proof, and leaving the confines of banks as “trusted third parties” behind.

Long-term investors, retirement investors, passive investors, and early adopters of new technology, whether young or old, can benefit from their investing a part of their retirement into cryptocurrency.  Here are just a few great reasons:

6 Reasons to Invest in a Crypto IRA

 

  1. Diversification of your investment portfolio

Many people are unaware that they have alternative investment options in IRAs.    A few select qualified custodians offer cryptocurrency self-directed IRAs in both pre-tax (Traditional) and post-tax (Roth) accounts,           which increase diversification and thereby reduce risk.

  1. Return on Investment

Bitcoin and other cryptocurrencies have outperformed every other investment class over the past few years, and experts forecast this as a continuing, long-term trend.

  1. Hedge against inflation and financial turmoil

Bitcoin has a fixed number of coins designed into its protocol. That means there are only 21 million Bitcoins that will ever be mined, restricting the supply.  Unlike conventional currencies like the dollar, Bitcoin cannot be devalued by overinflating the supply.

  1. Privacy and Security

Every Bitcoin transaction is recorded and visible on the blockchain by entering the public key, also known as the wallet ID, which is a series of letters and numbers that keep the parties to the transaction anonymous. There is also a private key, known only to the sender, which is necessary in order to authorize buy or sell transactions.

  1. Disengagement from the conventional financial system

The decentralized peer-to-peer nature of blockchain transactions means that “trusted third parties”, e.g., banks, stockbrokers, lawyers, etc., are not needed to transfer value in the cryptocurrency ecosystem. This innovation is the most significant departure from conventional financial technology pioneered by Bitcoin.

  1. Tax advantages

With a Roth cryptocurrency IRA, you can invest post-tax money into an investment vehicle, your gains accrue tax-free, and you pay no taxes when you take your distributions. If you choose to invest in a conventional Cryptocurrency IRA, you can invest with pre-tax dollars, your gains accrue tax-free, and you only pay taxes when you take a distribution. In either case, a Cryptocurrency IRA offers you tax advantages that you can’t get by investing in cryptocurrency anywhere else.

Navigating Temporary Detours

Cryptocurrencies are very volatile.  Although the basic trajectory of the two biggest—Bitcoin and Ethereum—has been steadily upwards for a decade, sudden dips are typical.  Some authorities are negative towards cryptos, and some countries have banned them.  The decentralized design of these currencies makes it unlikely that banning them would succeed globally.

How a Cryptocurrency IRA Can Help You Through This Process

Coin IRA is a fully compliant and licensed institution working with the most experienced cryptocurrency IRA custodians.  We will walk you through the process of setting up and funding your new Cryptocurrency IRA, guiding you every step of the way to safe trading and secure storage of your Bitcoin and other cryptocurrencies.

Take the Next Step

You can contact us to find out more about how we can help you with tax-efficient cryptocurrency investing. This is a whole new field of technology, and you should be excited to be an “early adopter”. With economic turmoil starting to emerge, and the fallout from the pandemic being an unknown factor on the horizon, you need more than ever to ensure that your future and the future of your family are protected by having various advantageous investments.

Starting a Cryptocurrency IRA is like choosing another quality “vehicle” to add to the journey to your retirement.