Credible companies, financial institutions, and experts are recognizing the real value and credibility of cryptocurrencies. According to a February 6, 2018 article in The Motley Fool, companies like American Express and Banco Santander are implementing digital currency technology while accounting giant Deloitte is now working with blockchain technology, the basis for cryptocurrencies.
IRS Approves Cryptocurrency Roth IRA
The Internal Revenue Service has ruled that digital currencies may be held as assets in self-directed Roth or Traditional IRA accounts. A Traditional IRA investment yields short-term benefits by deferring taxes on the principal and gains until withdrawal after age 59 ½.
However, a Roth IRA investment begins with after-tax money, and all subsequent withdrawals at retirement are 100% tax-free. When the gains are substantial, a Roth IRA yields a considerable advantage.
Four Ways to Benefit From a Cryptocurrency Roth IRA Investment
1. Gains Are Completely Tax-Free
With a self-directed Roth IRA, you can currently invest $5,500 ($6,500, if over 50) each year. As mentioned, the funds invested are after-tax, and all subsequent gains will be tax-free. Over 10 years, for example, a cryptocurrency Roth IRA portfolio may realize substantial earnings. Alternatively, with any non-retirement investment or Traditional IRA, gains are still taxable.
2. Diversify Your Retirement Portfolio
Nearly every financial advisor recommends a diverse portfolio, usually a combination of stocks, bonds, and cash. The idea is that in a volatile market, bonds can be a stabilizing factor. If stocks should sink, the value of bonds might rise or at least fall at a slower rate. However, in an economy in which interest rates are rising, the value of bonds decreases. Simultaneously, instability in global affairs and other events can cause a stock market downturn as well.
Some view cryptocurrencies in a similar light to gold or other precious metals. Both assets are limited in availability and can be seen as the ultimate hedge.
Digital currencies operate independently of stock and bond markets and are not bound by the same conditions.
3. Cumulative Gains
As legendary investor Warren Buffet frequently states, compound interest is the most potent factor in investing. With a cryptocurrency Roth IRA funded by repeated annual investments and gains growing atop prior earnings, the opportunity for substantial growth is notable.
With the rise of cryptocurrency since Bitcoin began over 10 years ago and the continuing public recognition of blockchain technology, it’s easy to project cryptocurrency gains well into the future.
Converting or rolling over an existing Roth IRA fund and then investing the legal amount each year into a cryptocurrency Roth IRA fund can create sizeable wealth over time. A modest digital currency Roth IRA investment today at age 40, say, can grow into a vast tax-free total over the course of the subsequent 20 years. An individual who invests only a small amount at age 30 in a cryptocurrency Roth IRA can realize an accumulated investment that could be substantial.
4. Capital Gains Tax Avoidance
A self-directed cryptocurrency Roth IRA also avoids the capital gains taxes inherent in non-retirement investing. If you become a cryptocurrency millionaire, as others have, you will not be required to share those gains with the government if invested in a cryptocurrency Roth IRA.
Contact BitTrust IRA for Information
BitTrust IRA is an investment company specializing in Cryptocurrency IRAs. Their experts understand the nuances of digital currency markets as well as the legal requirements for managing IRAs. With an initial investment of $20,000, BitTrust can help you to invest in a single currency or a block of different currencies. Visit the BitTrust IRA website to learn about cryptocurrencies, how they work, security elements, and how to invest.
Call 855-642-8800 today to speak with a representative who will help you to:
- Set up an account
- Transfer money
- Invest in a cryptocurrency Roth IRA