During the Great Recession, the topic of using IRAs to invest in precious metals, real estate, and other assets got a lot of attention. The IRA does allow people to store commodities inside of self-directed IRAs if they follow the rules. Recently, a new innovation upon this idea has been getting attention. Now, it’s even possible to stash Bitcoin inside of an individual retirement account (IRA). If you would prefer to save for your retirement with electronic currency, it’s actually not that difficult to do now with a Bitcoin IRA.
Why Would You Want to Create A Bitcoin IRA?
- Just in case you don’t understand Bitcoin, you should know that it’s the most famous of all of the new cryptocurrencies. Just in case you think that these digital currencies are only a passing fad, here are a few things to keep in mind:
- Bitcoin has been around since 2009, so it has close to a decade of history. That might not seem like a long time, but things rise and fall fast when it comes to the sheer scale of the Internet.
- The estimated value of all Bitcoins in existence approaches $40 billion. There are also other cryptocurrencies that are worth billions of dollars such as Ethereum, Litecoin, and Ripple.
- Even large companies are investing in the blockchain technology that powers Bitcoin. Some examples include JP Morgan Bank, Dell, and Microsoft, just to name a few.
- You can find over 150,000 merchants worldwide who will accept Bitcoin as a currency.
In other words, Bitcoin and the Blockchain technology have become very big businesses. Even some governments are considering moving towards their own official versions of electronic currencies, though that has not happened yet. The thing that many people like about this sort of currency is that it is anonymous and doesn’t depend on a central bank or government. Also, it would appear safe to say that Bitcoin, other electronic currencies, and blockchain technology are here to stay.
Choosing a Bitcoin IRA
The good news is that the United States IRS has already said that it would agree to treat Bitcoin like any other commodity for taxation. The simplest and most obvious thing to do is to set up a self-directed IRA, much as the kind that people use to store such other commodities as gold or real estate. It impossible for you to do the whole thing yourself.
However, most people will choose to use a service that can help them with the details. A couple examples of such a service are BitcoinIRA.com and Regal Assets with their Regal Wallet program. This mention is not meant to promote or recommend them over another service. It is just to help provide information about an example of one service. If you decide to set up a Bitcoin IRA rollover, you should do your own research about the best way to invest in Bitcoin.
Is a Bitcoin IRA Rollover Right for You?
There is still a lot of potential upside with Bitcoin and similar services. As with anything else, you may face some risks too. Most people probably won’t choose to use electronic currencies for all of their retirement savings. But if you believe in the potential of Bitcoin and cryptocurrencies as a decentralized currency you may benefit tremendously from doing a 401k to Bitcoin IRA rollover as part of diversified retirement savings plan.