This may seem strange, but a mere 12 years ago Bitcoin was barely on anyone’s radar. It had very little value and in truth, no one would consider investing in a Crypto IRA. In fact, the ability to invest in cryptocurrencies for retirement didn’t even exist back then.
Right now, investors are clamoring to discover the best crypto IRA. They see how popular Bitcoin and other investments are and they want to get in on the action. They see the value of moving their wealth away from the US dollar and other currencies. And they see that so many bright young people have created massive wealth with this investment.
Are you one of these investors?
It’s time to take your retirement investing to the next level. It’s time to learn of the many reasons why it’s imperative to invest in a crypto IRA.
Not only will this reasoning impress you – and it will. It will also open your eyes to a tremendous opportunity that you’ve been missing for far too long.
Should you really invest in a crypto IRA? The immediate answer is a resounding yes. To find out the specifics, keep reading to learn more.
A Crypto IRA Is the Tax Efficient Way to Enter the Cryptocurrency Investing Space
Certain cryptocurrencies including Ethereum, Solana, and Bitcoin have soared in popularity over the last few years. And this intense popularity has led to humongous investor gains. In fact, these cryptocurrencies have turned more regular people into “Bitcoin millionaires” than any other asset class in recent memory.
Now, many of these cryptocurrency traders were in for a rude awakening at tax time this year. They learned very quickly that their newfound wealth and income wasn’t all there is to keep. The IRS definitely wanted a cut of this massive windfall.
There’s nothing wrong with paying your taxes when they are due. It’s expected, necessary, and important to keep our government running smoothly.
But when you rather avoid paying taxes for as long as possible? A cryptocurrency IRA lets you postpone paying your taxes until you take distributions at 59 ½ years old or older.
Non-Crypto IRA Tax Calculation Breakdown
Here’s a quick example to better understand:
- On October 15, 2020, you purchase 10 Ethereum tokens for an average cost of $361.83 per token.
- On October 13, 2021, you sell 10 Ethereum for an average price of $3608.43 per token.
- Your net gain is $32,466 for this trade.
- Since it wasn’t purchased through a crypto IRA, it is now considered income and the IRS says it is subject to tax.
- On top of everything else, you’ll now have to pay taxes on the additional $32,466 plus income and other investments.
- This will likely push you into a higher tax bracket, depending on your financial situation. If you make $55,000 a year plus the $32,466 in crypto income, you are now in a 24% tax bracket.
- In total, you’ll pay $7791.84 for your Ethereum cryptocurrency earnings because you now owe this money and back taxes.
In this example, let’s assume our crypto investor was 25 years old. If he or she had purchased within a crypto IRA, they could’ve avoided paying taxes for 24 ½ more years.
In turn, their $7791.84 could have remained in their account. They can use this money to reinvest in other cryptocurrencies or alternative investments like silver or gold. The income would compound year after year and decade after decade.
Before long, this extra $7791.84 could potentially turn into $150,000 more in 24 ½ years. That’s the power of compounded growth in action!
Read my review of the best crypto IRA companies to get started investing in Bitcoin and Ethereum right away.
Crypto IRA Investing Leads to Real Portfolio Diversification
When portfolio diversification is done properly, it can lower volatility and risk in your investments. In particular, if one asset class is really struggling, other diversified areas of your portfolio can prop it up. This is a great way to keep your investments whole without suffering too much on the downside.
Traditional financial advisors might advise you to split your portfolio into two asset classes including stocks and bonds. They’ll likely advise you to allocate 60% of your assets in stocks and 40% of your assets and bonds.
Is this really the best way to achieve true portfolio diversification? Many of today’s top investors recognize the 60/40 split isn’t true portfolio diversification.
In fact, they discovered that the best method of diversification is mixing alternative assets with traditional investments. In this particular case, alternative assets include Bitcoin, Ethereum, Solana, and other cryptocurrencies. It also means adding precious metals to your portfolio including silver, gold, palladium, and platinum.
Why are investors so intrigued to add cryptocurrency to their portfolio?
Simply put, they prefer this level of diversity in their portfolio because cryptocurrency has a weak correlation with bonds and stocks. As a matter of fact, financial advisors are finally beginning to jump on the cryptocurrency bandwagon. They realize that buying into a cryptocurrency IRA is a tremendous way to offset portfolio losses when traditional investments falter.
Even more interesting…
Bitcoin is truly in a class by itself. Its behavior is definitely different and independent than traditional markets. In fact, from a historical standpoint, Bitcoin has even outperformed historical markets by a wide margin.
Sounds like a great investment, right?
Find out more about the top crypto IRA companies in business right now. Read my detailed review of our favorite companies.
In the past 10 Years, Other Asset Classes Have Been Outperformed by Bitcoin
I just mentioned this fact, but it definitely bears repeating and a detailed breakdown is in order. Because Bitcoin is truly in a class by itself from a performance standpoint. This powerful cryptocurrency has truly crushed the competition as far as other asset classes are concerned.
The meteoric rise of Bitcoin is nothing short of miraculous. Since 2011, this powerful cryptocurrency had gone up over 20 million% at the time, although the price has dropped since then.
I’d love to give you the current percentage but my percentage calculator won’t go that high! It’s crazy because when I put the figures and the calculator, it says Bitcoin has gone up infinity percent!
It really doesn’t matter because you understand the picture that I’m trying to verbally paint for you today.
A better way to break it down is the annualized return of Bitcoin over the past decade is 230% per year. The NASDAQ 100, on the other hand, has an average annualized return rate of only 20%.
Bitcoin has grown more than 10 times the NASDAQ’s growth year-over-year for the last decade.
Bitcoin is only one type of cryptocurrency that has experienced tremendous growth over the past decade. Ethereum, Solana, Polka Dot and Cardano have also experienced massive growth over the last few years.
Maybe it’s time to strike while the iron is still hot? If you’re thinking about investing in cryptocurrencies, please consider opening a crypto IRA. Read my review of the top crypto IRA companies in the industry at present.
Open a Crypto IRA Because Bitcoin Is the Current Leader as a Hedge against Inflation
In the past, gold was considered the standard hedge against inflation. And gold has done a tremendous job of performing during inflationary periods. But things are very different now and investors now look to Bitcoin as their inflationary hedge.
Why is Bitcoin such a popular hedge against inflation?
For starters, it has a limited finite supply that will never increase or cause Bitcoin to become inflated. In fact, built directly into the code, the supply of Bitcoin will never surpass 21 million cryptocurrencies.
Believe it or not, the major financial institutions are even tracking this change. J.P. Morgan Chase recently mentioned that institutional investors are gravitating toward Bitcoin as opposed to gold as an inflation hedge.
It shouldn’t be mind numbingly difficult to figure out why they are switching to Bitcoin. In October 2021, Bitcoins value had increased by nearly 500% late in the year. It’s since dropped off some, but the percentage gain is tremendous.
On the other hand, the value of gold had decreased by 6.2% at the same time in October 2021. So, it may make tremendous sense for investors to get into a much better hedge against inflation. It makes tremendous gains and huge increases in value, which is certainly attractive to crypto IRA investors.
You may prefer keeping your money in gold as opposed to cryptocurrencies like Bitcoin as your hedge against inflation. Either way, it’s better than remaining heavily invested in the US dollar.
As you can see, there are tremendous reasons to become a crypto IRA investor. Between tax breaks, portfolio diversification, hedge against inflation, and overall cryptocurrency performance, it’s truly a no-brainer.
Are you ready to start amplifying your wealth for retirement through cryptocurrency IRA investing? Before jumping in, please read my review of the best crypto IRA companies in business right now. Use this valuable information to choose the ideal company to meet your personal and financial needs.