IRA options: investing in Cryptocurrencies




Bitcoin Boom

If you would have put $100 in Bitcoin in july 2010, as of today it would have been worth more than 10 million dollar! Even if you bought in december 2016, it would now be worth more than $800. Now imagine if instead of buying Bitcoin with your saving or checking account, you could allocate some of your retirement money into cryptocurrency? Sounds like a great way to prevent missing out on the next Bitcoin boom.

quoted
Eric Schmidt,
Chairman of Google

    "Bitcoin is a remarkable cryptographic achievement… The ability to create something which is not duplicable in the digital world has enormous value.... Lot’s of people will build businesses on top of that."

quoted
John McAfee,
Founder McAfee

    "It is not a speculative investment even though it is being used as such by other people. As Bitcoin network grows the value of Bitcoin grows. As people move into Bitcoin for payments and receipts they stop using US Dollars, Euros and Chinese Yuan which in the long-term devalues these currencies."

quoted
Nassim Taleb,
Trader & Author

    "Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative. But I am not familiar with the specific product to assert whether it is the best potential setup. And we need a long time to establish confidence."

quoted
Michael Novogratz,
Hedge Fund Manager

    "It's essential for every investor to have crypto in their portfolio. It's 'almost irresponsible' not to invest in Bitcoin."

quoted
Eric Schmidt,
Chairman of Google

    "Bitcoin is a remarkable cryptographic achievement… The ability to create something which is not duplicable in the digital world has enormous value.... Lot’s of people will build businesses on top of that."

quoted
John McAfee,
Founder McAfee

    "It is not a speculative investment even though it is being used as such by other people. As Bitcoin network grows the value of Bitcoin grows. As people move into Bitcoin for payments and receipts they stop using US Dollars, Euros and Chinese Yuan which in the long-term devalues these currencies."

quoted
Nassim Taleb,
Trader & Author

    "Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative. But I am not familiar with the specific product to assert whether it is the best potential setup. And we need a long time to establish confidence."

quoted
Michael Novogratz,
Hedge Fund Manager

    "It's essential for every investor to have crypto in their portfolio. It's 'almost irresponsible' not to invest in Bitcoin."




What is a bitcoin IRA?

The term bitcoin IRA is often used to describe a cryptocurrency IRA, an individual retirement account that allows the ownership of Bitcoin, Ripple, Ethereum and other cryptocurrencies. Just like other types of IRA, the bitcoin IRA will provide you with tax advantages. Holding or trading bitcoin in your IRA will allow you to accumulate investment growth on a tax deferred basis. The bitcoin held inside of an IRA has benefits over bitcoin held in normal taxable accounts. When bitcoin is held inside of an IRA, you pay no taxes on the gains in value when you decide to sell (which in normal accounts could be a whopping 37%), but only when you withdraw the money resulting from the sale of the bitcoin.



Why a bitcoin IRA?

Tax

'Be thankful I don't take it all 'Cause I'm the taxman, yeah I'm the taxman'

Holding or trading Bitcoins or other cryptocurrencies outside an IRA will make someone else very happy as well: the IRS.
If your crypto positions are held for a period of less than a year before you trade or sell them, a short-term capital gains tax is applied equal to the ordinary income tax rate for the individual:

Tax rate Taxable income bracket Tax owed
10% [$0 - $9,525] 10% of taxable income
12% [$9,526 - $38,700] $952.50 + 12% of the amount above $9,525
22% [$38,701 - $82,500] $4,453.50 + 22% of the amount above $38,700
24% [$82,501 - $157,500] $14,089.50 + 24% of the amount above $82,500
32% [$157,501 - $200,000] $32,089.50 + 32% of the amount above $157,500
35% [$200,001 - $500,000] $45,689.50 + 35% of the amount above $200,000
37% [$500,001 or more] $150,689.50 + 37% of the amount above $500,000

It also means you need to meticulously keep track of all your trades. If, however, the holding period is at least a year a long-term capital gains tax is applied. The actual rate is again depending on your income. But even though a holding period of more than a year will mean you get taxed lower, you still lose a big part of your profit to taxes.

Tax rate Taxable income bracket
0% [$0 - $38,600]
15% [$38,601 - $425,800]
20% [$425,800 and up]

A Bitcoin IRA allows you to accumulate investment growth on a tax deferred basis.You don't need to pay taxes over the increase in value when you decide to sell.



How do you start owning bitcoin and cryptocurrencies

Owning crypto means owning your future. Below you can find a free and complete guide that will help you start. It will teach you:
- How to roll over your 401K into a Cryptocurrency IRA,
- How to safely buy Bitcoin, Ripple Litecoin and Ethereum,
- Everything about cold storage and safety,
- The ins and outs of tax on bitcoin


Disclosure: We are a professional advisor site that receives compensation from the companies whose products we recommend. We are independently owned and the opinions expressed here are our own.


NEWS


hungary orban gold

Hungary and Poland increase their gold reserves significantly

man holding ripple coin

Can I buy Ripple XRP with my pension?

mitt romney

How did Mitt Romney grow his IRA so big?


BTC stable while stocks crash

Stocks are crashing, Crypto prices stable

bitcoin retirement

Can you retire with only one Bitcoin?

xrp retirement

Can you retire with only 10.000 XRP?

bitcoin tax

Tax Arbitrage Play for Bitcoin

gold coins

Which types of gold can I hold in an IRA?