Recently, IRA ruled that cryptocurrencies have the same value as real currency. This means that you can use it to buy services or goods. It goes further to mention bitcoin as an example of the virtual currency. In fact, this Bitcoin IRA offers both traditional and roth IRA options. Remember that bitcoin can be traded digitally, exchanged to other currencies and used to purchase goods and services.
The IRS notice is straightforward and clear. This is because you can exchange bitcoin for U.S. dollars and other major currencies. Moreover, you can use it to make various investments and even fund your 401k or IRA. Remember that IRS also considers bitcoin as property. Thus, a custodian is needed for compliance purposes.
Is it a good idea to consider funding your 401k or IRA with bitcoin? Bitcoin continues to gain widespread acceptance for both business and personal transactions across the world. This explains why its value continues to grow. The good thing about having bitcoin IRA is that you have invested your money in a non-correlated asset. This means that the value of bitcoin cannot be affected by economic forces which affect traditional assets. More investors and consumers continue to embrace bitcoin across the world.
Fluctuations in the stock market cannot have an impact on the bitcoin value so are oil prices, or a weak dollar.
The fact that 401k and IRA are not subjected to capital gain taxes, you can greatly maximize your investment. As you probably know, none can predict the future value of any particular investment. Currently, bitcoin is quite speculative. Given the increased acceptance across the world, its value has greatly increased. This means that your IRA investment can turn out to be quite profitable over time. This is the case when you take into account tax savings.
How It Works
Bitcoin IRA investment works just like the traditional IRAs. Just like IRA investments in collectibles or precious metals, your investment will be handled by a custodian. The fact that these are recent developments in the finance sector, very few custodians can handle them.
For you to benefit from bitcoin investment, you should have a self-directed IRA. This is also the case for collectible investments and precious metals. This provision may not be available for most 401k plans. In any case, most plans specify the choice of given type of investments such as stock funds or stocks.…