Investors are always looking for the next big thing. You may not believe it, but there’s value in investing in cryptocurrencies. In fact, these currencies are so potent and volatile. Wise investors made millions of dollars speculating on Bitcoin, Ethereum, and a few others.
But is crypto really a solid investment for retirement? You probably have many questions about this unregulated currency. Is it a risky investment? Or will I lose everything speculating on unregulated digital currencies?
Well, to help put things in perspective, we’ll give you the rundown regarding seven types of cryptocurrencies. We’ll also tell you about the crypto IRA and how it works. Even more important, we’ll fill you in on the best ways to navigate this incredibly risky but potentially profitable investment opportunity.
What is a Crypto IRA?
A self-directed cryptocurrency IRA is very easy to understand. Our favorite custodian, Regal Wallet, gives investors the ability to invest in Bitcoin, Ethereum, Litecoin, Ripple and three others. They are four of the seven most prominent cryptocurrencies currently trading today.
Guess what? If you’re serious about cryptocurrency IRA investing in retirement, you have a few options available as far as custodians go. Regal Wallet by Regal Assets is one of the only trusted custodians approving this style of investment in the United States. Thankfully they are a trusted resource and a company worthy of your business.
Opening a Self-Directed Crypto IRA
You have a few funding options when opening a cryptocurrency IRA. Two of the more popular options are as follows:
- IRA rollover – you take a distribution from your current IRA account (401(k), 403B, etc.) and use it to fund your crypto IRA.
- IRA transfer – you transfer funds from “custodian to custodian” to fund your brand-new self-directed crypto IRA.
Either method is perfectly accepted to begin investing in cryptocurrencies for your future retirement. We’ll go into greater detail regarding rollovers and transfers below.
But that’s not all. You can also fund your crypto IRA using a personal check, a wire transfer, or certified bank check if necessary.
Why Choose a Cryptocurrency IRA?
As someone looking to retire with a healthy nest egg, it’s in your best interest to diversify your portfolio. Leaving all of your money in stocks, bonds, and cash is foolish and financially irresponsible.
Your best bet is to convert some of your retirement savings into alternative investments. You can invest in gold, silver, platinum, and palladium and do very well to hedge your bets against inflation.
Cryptocurrency IRA investing is also a wonderful idea. You’ll reduce portfolio volatility and improve the returns on your overall portfolio when you invest in crypto options like Bitcoin or Ethereum.
The Importance of Investing in a Non-Correlated Asset
Did you know that crypto is a non-correlated asset? The big benefit of this asset class is it isn’t susceptible to economic forces. Whereas the stock market can go up and down on a whim if the US President or Fed chairman says something positive or negative.
On the other hand, crypto won’t get dragged through the mud like most traditional investments. This usually happens when the economy takes a turn for the worse.
At this moment in time, cryptocurrency is beginning to gain more acceptance for business and personal transactions. This is happening worldwide, and because of this acceptance, the value of certain cryptocurrencies will continue to rise and experience positive gains.
A Note of Significant Importance
Before investing, please understand that Bitcoin and other cryptocurrencies are quite speculative in nature. This investment type is not for the faint of heart because it’s highly volatile and very risky.
One moment, the value of crypto could skyrocket into the stratosphere and you’ll be rolling in dough. In the next moment, the price could come plummeting back to reality just as quickly.
Over the next few years, it’s expected that Bitcoin and other forms of crypto will rise in value. In fact, it’s expected that they make significant gains. But at the same time, they could also lose value and even go down to zero. So you must know this ahead of time before getting into the crypto IRA investing game.
Self-Directed Cryptocurrency IRA Transfer
Are you wondering how a cryptocurrency IRA transfer works? It’s a valid question so we’ll do our best to answer it. During the transfer process, this is what you can expect from your existing retirement account custodian:
- The first step is to contact your custodian and ask for a funds transfer using a distribution check.
- The retirement account custodian will initiate the transfer of funds to the specified cryptocurrency custodian and account.
- The crypto custodian then deposits the distribution funds into your crypto account.
- The account is now funded and capable of purchasing cryptocurrencies.
As you can see, the process is very simple and pain-free. With transfers, it’s basically a transfer from one custodian to another without any physical intervention on your part whatsoever.
Self-Directed Cryptocurrency IRA Rollover
At this point, you’re probably curious about a crypto IRA rollover as well. This rollover is an alternative way to fund your new account.
Before we begin, please understand that there is a 60 day rule in place. With this rule, you must deposit the distribution received from your current retirement account within 60 days. If you fail to do so, you will end up paying penalties and taxes, so keep that in mind.
The crypto IRA rollover process is as follows:
- Physically receive a distribution check from your current retirement account custodian.
- Physically deposit your distribution check into your crypto IRA account.
- Keep the 60 day rule in mind. Do not allow 60 days to lapse or suffer the consequences.
- Begin purchasing cryptocurrencies using your new crypto IRA account.
Clearly, this process is relatively simple to follow. Just remember that you are personally responsible to receive a deposit. You’re also responsible to deposit your distribution from your current custodian.
7 Types of Cryptocurrency Investments
Regal Wallet – our crypto IRA custodian of choice – offers seven types of crypto coins to select and add to your self-directed retirement account. Each of these seven coins is considered the top crypto investments currently available today. They include the following:
We’ll now learn more about them in greater detail.
Bitcoin
This cryptocurrency is the most popular and it’s accepted all around the world. Out of all digital currencies, this one was the first decentralized option. It does not fall under the control of a single administrator or a central bank. It’s part of a peer-to-peer network and users use cryptography to initiate transactions between one another.
Bitcoin Cash
The scalability debate around Bitcoin led to a split on August 1, 2017. This split created a chain with an 8 MB block size limit. This increases the amount of transactions processed on its ledger.
Ethereum
This platform is public, open sourced, and blockchain based. It’s a computer platform containing smart contract functionality. This crypto is decentralized and operates using the Ethereum Virtual Machine or EVM for short. The VR machine uses an international network of public nodes to execute scripts and provides a token named Ether. You can transfer this token from one account to another.
Ethereum Classic
Ethereum Classic is very similar to the original. The main difference is it uses old blockchain. Ethereum, on the other hand, uses new blockchain. Classic also uses a value token aptly named “classic ether” and it can be transferred from one participant to another.
Ripple
Ripple is a form of crypto known as a real time gross settlement system, or RTGS for short. It operates on the Ripple Transaction Protocol or RTXP, which is sometimes called the Ripple protocol.
Litecoin
LTC also known as Litecoin is a cryptocurrency operating on peer-to-peer and open-sourced software. It is decentralized so it isn’t managed by a central authority. The technical details are very similar to Bitcoin, which it was inspired by.
Monero
XMR otherwise known as Monero was created in April 2014. This crypto is open source, decentralized, scalable, and private. It runs on Android, Linux, Mac OS, Windows, and FreeBDS.
3 Reasons to Consider Investing in a Self-Directed Crypto IRA
- The returns are outstanding – in one circumstance, it was possible to invest $10,000 in crypto (Ethereum) and turn it into $60,000 or more. This is a 6X return on your investment and very hard to come by with traditional stocks and bonds.
- The growth potential is tremendous – the world of crypto is just beginning and it may seem intimidating and complex, but it’s going to get better and easier to understand. The intimidation factor is one reason why you should get in now. It’s going to continue to rise in value so you might as well jump on the bandwagon before it’s too late.
- Free yourself from big government and banking conglomerates – if you don’t like the government or big banks monopolistically owning your life, you’ll love crypto. Why? Because it doesn’t have a central authority. It’s truly part of a democratic ecosystem. You’ll never have a government institution or bank stepping in to bend the rules in their favor.
Final Thoughts
Remember, investing in crypto is definitely risky. But if you’re willing to take a chance, it’s a great investment that can pay big dividends long term. That’s why we recommend opening a self-directed crypto IRA.Please take a moment to view the List of Best Cryptocurrency IRA Companies. While there, you’ll learn more about your options and you’ll discover the best cryptocurrency IRA custodian to meet your needs.