Blockchain-based cryptocurrency has been storming the financial markets since the Bitcoin prices skyrocketed in 2017 up to $20,000 in some of the exchanges. Presently, also amid the crisis of global pandemic COVID-19, Bitcoin was considered as a commodity for investment and the latest event of Bitcoin halving had also diversified the crypto community involved in increasing the market capitalization and trading volume. Cryptocurrency is gradually coming into the mainstream as many of the tech giants, e-commerce websites and also stores next to your neighborhood started accepting the payments in the form of Bitcoin as it saves their transaction cost and time along with hassle management of transaction records on the Blockchain network. Crypto is getting popular not among the youngsters but among the veterans planning for their retirement portfolio like that of Cryptocurrency retirement account.
Cryptocurrency is flourishing in financial markets as a new asset class. With its highly volatile nature and puzzling price rollercoaster, it is captivating the interest of investors. Can I invest my pension in Bitcoin? Do you think it would be the right choice to add crypto assets to your retirement accounts? Besides speculation, can cryptocurrency be chosen for long term investment? There are different aspects that must be considered before adding Bitcoins to your cryptocurrency retirement account. In this article let us try to understand the benefits of adding Bitcoins and the options available in Cytoscape for less investment.
Cryptocurrency Retirement Account | Reasons To Add Bitcoins
Let us understand the reasons behind the addition of cryptocurrency is your retirement portfolio:
- Diversification: Generally retirement portfolios consist of traditional stocks and mutual funds, which are less risky paying less profits. For the rapid growth of investments and re-balancing the risks, one must consider Bitcoins as an asset for a retirement portfolio.
- Hedging Government: Governmental directives affect the one or another asset value-added to your retirement account. Bitcoins being decentralized assets is immune to the effects of policies, rules, and regulations. Thus, the addition of Bitcoin has the potential to provide more credence to the cryptocurrency retirement portfolio.
- Long term growth opportunities: Undoubtedly, Bitcoin is highly volatile but it is turning to an ideal long term investment asset and a good option to add in a retirement portfolio. Let us have a fact check in this case, prices of Bitcoin skyrocketed from a few cents in 2009 to $20,000 in 2017, thereby turning many of the holders into millennials.
- Direct Use: Unlike the mutual funds and traditional stocks, which need to be sold first and then can be utilized in mainstream, Bitcoins can be directly utilized as it has started to come mainstream both online and offline.
Cryptocurrency Retirement Account | Where To Invest?
Most of the investment advisors suggest having diversified retirement portfolios so as to limit exposure of any one type of asset which may result in reducing the volatility of a portfolio for a period of time. The addition of Bitcoin can help in maintaining the volatility and profits associated with a portfolio. But, while choosing the medium to buy Bitcoin, few factors like legal reassurances, custody options, legitimacy, and also fiat options must be considered.
Considering the mentioned factors, investing in Bitcoin funds can provide investors with exposure to the performance of Bitcoin and that too without actually owning any Bitcoins. Some of the following options can be explored for the cryptocurrency retirement investment:
Bitcoin Investment Trust
Bitcoin Investment Trust of Barry Silbert is one of the funds quoted under Alternating Reporting Standards in the crypto marketplace. With small annual fees, these Bitcoin funds had constantly returned huge profits. They can be purchased in traditional brokerage accounts in the name of GBTC.
Bitcoin Exchange-Traded Notes
Some of the service providers like Stockholm based XBT provide Bitcoin exchange-traded notes (ETNs). ETNs work differently than GBTC, as they are merely “Non-equity linked certificates” which are involved in tracking the price of Bitcoins. Generally, certificates are not principal-protected but the Bitcoin equivalent to the value of ETNs are issued and has a reputed guarantor from the marketplace. ETNs are traded with minimal annual fees with higher investment returns.
Global Advisors Bitcoin Investment Fund
One of the promising Bitcoin Fund available in the market is Global Advisors Bitcoin Investment Fund or GABI which brags being the first institutional grade program to manage exposure to Bitcoin. These funds are comparatively less volatile than Bitcoin itself with nominal fees and high returns.
Investing in Bitcoins Directly
Some of the companies allow you to directly invest in Bitcoins and add to your cryptocurrency retirement portfolio. Enterprises use mining pools to buy Bitcoins and with the help of wallet manager or crypto exchanges, maintains the portfolio. Some of the other Trust is made as custodian to assure the security of funds invested. You can easily invest some of your funds in Bitcoins directly though these companies with less risk in your mind due to their insurance policies. For instance, Bitcoin IRA as per BitcoinIRA Reddit is currently offering cryptocurrency retirement assets to US customers with Genesis Mining BitGo and Kingdom Trust.
Thus, as per your requirements and the money you wish to invest, you can either purchase Exchange-traded Bitcoin funds (BitcoinETF), certificates, investment funds or can purchase Bitcoins directly to diversify your Bitcoin retirement portfolio.
As per the research of Ark Invest and Coinbase, Bitcoin is the only asset that maintains consistency in reducing the volatility, having the prospects of stability in the future. So, while you are preparing for your retirement, you must consider Bitcoins to add in your retirement portfolio. Along with traditional investments in real estate or the stock markets, Bitcoin can also prove as the option for better returns. If you are a novice in crypto space, you can hire the advisories, download the various apps in smartphones, or can read the various blogs to strategize the investment related to cryptocurrencies. But, remember not to invest the amount which you cannot afford to lose, just invest which even if you lose, you can cope up with the loss. However, the mass adoption of cryptocurrencies and Blockchain technology reduces the risks and would increase the potential returns over Bitcoin investments.
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Tarulika is an engineering graduate and an eloquent crypto blogger. Being a digital economy supporter, she keeps herself updated with the course of the latest innovation in the crypto industry, Blockchain Technology, and the Internet of Things. Currently, she is dedicatedly curating the simpler and interesting content for crypto guides for beginners to accelerate the movement of the financial revolution. If you want to learn more about the cryptocurrencies, latest trends of blockchain-powered AI applications, you are free to follow her on LinkedIn.