Is Investing In Bitcoin For Retirement A Good Idea?
There are varied options for investment when one plans for retirement. These include stocks, bullion, property and many more. To add to this list, today cryptocurrency has also become a new trending option of investment for retirees.
Bitcoin is one of the most popular and famous cryptocurrencies with a very high market value in the present world. Owning Bitcoin in your IRA can be a very good way of diversifying your retirement fund. Recently the world is seeing great growth in the value of cryptocurrencies, Bitcoin in particular. In the year 2016 and 2017, the value of bitcoins actually peaked after which it fell for a while. But then again, it is again rising over the past year or so.
How good is Bitcoin for retirement investment?
The basic questions for anyone who is planning to invest in bitcoins in the retirement fund are, can this investment provide the security that one looks for in a retirement fund?
Is the investment secure and helpful in providing big returns?
Well, it is clear from the returns that people have enjoyed investing in Bitcoins that this mode of investment does have great potential in providing hefty returns to the investor. The most important thing about bitcoins is that, although it can fetch great returns, holding on to bitcoins for too long can be risky. It happened to people who held onto their investments in bitcoin post the peaking of the value of bitcoins in 2016-17 when its value had started to drop.
Buying Bitcoins for IRA
The people who have invested in Bitcoin mostly did it when the value of Bitcoin was lower and sold off their holdings when the price rose. Bitcoins are not investments that are for long-term and having bitcoins in the retirement fund needs special care of keeping a keen eye on the fall and rise of its market price.
To gain the maximum benefit from the enormous price potential of bitcoins one needs to make the right decisions at the right time. Selling off the bitcoin holdings at the right time can make a person considerably wealthier and it is always advised that gains from bitcoin sales be forwarded to other modes of investment like property, bonds etc. One thing that needs to be kept in mind is that in retirement funds having bitcoins, the firms who hold the retirement fund can charge high monthly account fee.
Bitcoins in a fund needs to be bought through proper management firms. The good thing about trading with cryptocurrencies is that they are traded 24 hours a day for 7 days a week and the key consideration is about the value of bitcoin at a given point of time.
How secure is this investment?
From the financial security point of view for a person who wants to hold bitcoins in his or her retirement fund, it would require certain keen efforts and a clear understanding of the nature of cryptocurrencies and the way their price fluctuations happen. As discussed earlier, price fluctuations do happen in Bitcoin and thus buying at the right time and selling off at the opportune time is critical for gaining substantially through the holding of Bitcoins in the person’s retirement fund. Proper investment of funds that has been gained through the trading of bitcoin is also important. When good gains are made by selling bitcoins then the amount earned can be used to buy gold funds or property or similar more traditional investment options. The person however must at all times keep a keen lookout for drops in the price of Bitcoins and when the person believes that the risk is worth taking and that person has got enough funds to invest again in bitcoins then buying the required amount of bitcoins for the retirement fund can be done. Bitcoin can be used judiciously to increase the assets of a person who has retired. The properties say for example some house that the person buys through the profits made through the trading of bitcoins can be used for rent or can be also used as a hotel which can give a continuous flow of revenue for the holder of the retirement fund.
When the value of the property becomes good enough the person can also consider selling the property off to earn handsome profits those can be invested back in bitcoins when the price of bitcoins is lower and there is a chance of the price of Bitcoins increasing in the future. Other similar investments like stocks and gold can also be sold off in the opportune moments to earn profits those can also go into the buying of bitcoins when the price is low and selling the bitcoins off when the price is high.