First Digital IRA’s cryptocurrency investment option may be the next investment fit for your goals. An article from The Merkle highlighted the benefits of investing in digital currencies with a self-directed IRA. Find out more about investing in digital currency pros and cons below.
When most people think about digital currencies like Bitcoin, they think about how it is a wholly disruptive force in the traditional way that we think about finances. It transforms payments, security, data integrity, and so forth. What some people may not associate with digital currencies are their Individual Retirement Accounts (IRAs). Our sponsor First Digital IRA (FDIRA) has recently opened its doors to the public so that anyone can invest in digital currencies within their retirement plan.
First Digital IRA is a relatively new player in the cryptocurrency IRA game. In fact, it was only three years ago that the IRS issued IRS Notice 2014-21, which ruled that digital currencies should be treated as property for taxation purposes. Only since then have Bitcoin and other currencies like it been eligible to be placed into self-directed IRAs. However, in these past few years, an industry for this type of investment in IRAs has started to grow.
Digital currencies’ resistance to inflation, specifically of Bitcoin’s, is often one of the first on the list. This is associated with the production limitation of digital assets. In the case of Bitcoin, there is a cap of only 21 million coins. Secondly, on the backdrop of a growing acceptance of digital currencies, there is still much potential for these assets to grow; some project their values to continue to grow at the fast rate they’ve experienced over the past few years. Third, digital currencies can diversify one’s portfolio. Fourth, according to the article, they remain secure. The fact that cryptocurrencies are unregulated and free from banks and third parties is another benefit. Ultimately, all the said benefits are tied to the tax advantages inside an IRA.
The bottom line with investing in digital currencies is this: you need to know the assets’ IRA-specific rules. Researching and a hunger for knowledge should be your second nature. When your future is at stake, do not throw all your hard work away with just a mistake.
Learn about the fundamentals of investing in digital currencies with this video from David Hay:
Do you have any insight on this kind of investment you might want to share? Tell us in the comments section below!