If you look at the investment portfolio of a typical American investor, what do you see? Nine times out of ten, you’ll see just a mix of stocks and bonds. Investors who are interested in diversification may invest in mutual funds, money market funds, or exchange-traded funds. Rarely do you see an investor branching out into real estate, precious metals, or private equity.
Many investors don’t know that they have investment options outside stocks and bonds. That makes it difficult for those investors who want to diversify their investment portfolios to do so. But with a cryptocurrency IRA, investors can gain vitally important diversification that can make a big difference in the risk profile of their portfolio.
Investing in cryptocurrencies isn’t just a way to diversify your investment portfolio, however. There are a number of other very good reasons to start a cryptocurrency IRA.
- Return On Investment:
- In the first decade of its existence, Bitcoin was the best investment asset in the world. Its growth was nothing short of meteoric. But other cryptocurrencies performed just as well during that same time frame. Cryptocurrencies went from a mere curiosity worth pennies per coin to full-fledged investment assets worth hundreds or thousands of dollars apiece.
- Even as the rate of price growth has slowed as cryptocurrencies become more mature, they remain fast growers, offering at times triple the annual growth of stock markets. For investors looking to build up wealth for the future, cryptocurrencies offer a unique chance to get in on the ground floor of an investment that has amazing potential for long-term price appreciation.
- Investment Hedge:
- Cryptocurrencies are an important hedge against the continued weakness of the US dollar and the prospect of financial turmoil. In fact, cryptocurrencies are beginning to become a new safe haven asset, much like gold and silver have been. As financial markets show signs of weakness, investors are beginning to move their assets into cryptocurrencies. In the event of a stock market crash, cryptocurrencies should maintain their value as more and more investors flock to safety.
- Because supplies of most cryptocurrencies are strictly limited, their purchasing power will increase over time, unlike the US dollar which continues to weaken year after year. For investors looking for a currency hedge but who don’t want to speculate with foreign currencies, cryptocurrencies could be just the asset they’re looking for.
- Privacy and Security:
- While Bitcoin and most popular cryptocurrencies aren’t anonymous, and their transactions are recorded on publicly viewable blockchains, the fact that cryptocurrency addresses are just a series of random numbers and letters means that no one can tie any particular cryptocurrency assets to you. You can buy, sell, and trade cryptocurrency without having to worry about anyone looking over your shoulder.
- Freedom From the Financial System:
- The appeal of Bitcoin when it was first introduced was that it allowed anyone to transfer wealth to anyone else anywhere in the world, without having to go through the banking system. In a way, it made every man his own bank.
- When investing in a cryptocurrency IRA, you’re similarly free of the US financial system. You don’t have to deal with Wall Street investment firms, you don’t have to worry about your account being bled dry by management fees, and you don’t have to worry about your assets being at risk in the event of a stock market crash or your brokerage firm going bankrupt. No matter what happens to financial markets and to the US dollar, your cryptocurrency assets will remain safe and secure.
- Tax Advantages:
- Many early cryptocurrency investors began to invest in cryptocurrencies before cryptocurrency IRAs were developed. That meant they had to invest with post-tax dollars, and will have to pay taxes on their earnings.
- With a cryptocurrency IRA, you can invest post-tax money in a Roth cryptocurrency IRA, 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.
- If you would like to learn more about how a cryptocurrency IRA can help diversify your investment portfolio, build up your retirement assets, and protect your wealth against economic turmoil and financial uncertainty, contact Coin IRA today for your free cryptocurrency IRA guide.