There have been plenty of dramatic changes in the cryptocurrency space since the creation of Bitcoin in 2009. Bitcoin was initially developed as a decentralized peer-to-peer digital payment system but investors saw something else; a way of storing value assets, much like gold.
Since then, Bitcoin has soared tremendously in value, and more cryptos have emerged in the last decade or so. The major price booms over the years have seen cryptocurrency investors reap massive returns.
So, it’s safe to say that cryptocurrency has entrenched itself in the market and isn’t going anywhere.
If you’re thinking of investing in crypto, a crypto IRA is perhaps the best way to go about it. A crypto IRA is basically a retirement account that can hold Bitcoin, Ether, and other cryptocurrencies.
So, what are the advantages of investing in cryptocurrency through a cryptocurrency IRA? Visit Viva Capital to learn more about cryptocurrency IRA.
1. Diversifies Your Retirement Portfolio
The most significant benefit of adding cryptocurrency to your retirement account is diversification. Diversification is a critical factor for every investor because it helps spread out risks.
A typical retirement portfolio combines various stock market securities like stocks, bonds, and funds. While these are good investments, they are usually affected by market performance. So, a severe market downturn can hurt your portfolio.
However, digital currencies don’t react to the same issues as stock market securities. For this reason, they are ideal for spreading the risks associated with other investments, and consequently, adding stability to your nest egg.
2. Crypto IRAs Help You Save on Capital Gains Taxes
The IRS treats cryptocurrencies much like other investments. That means as an investor, you will have to pay taxes on your cryptocurrency capital gains. Taxes can eat up a significant percentage of your returns and consequently slow down the growth of your investment.
Most investors work around capital gains taxes with IRAs since the IRS provides special tax reliefs for these retirement accounts. Crypto IRAs behave much like regular IRAs when it comes to taxes. Therefore, they are an excellent way to enjoy the benefits of investing in crypto while minimizing the costs associated with taxes.
3. Crypto Holds Great Long-Term Potential
Investing in crypto, especially with a long-term goal in mind, is a great way to build wealth. That is because while crypto can be considered volatile and risky in the short term, it holds massive potential for the future.
With new inventions and tech advancements, as well as increasing demand for cryptocurrencies, the digital currency space will definitely continue to grow.
Crypto IRAs, much like typical IRAs, are meant for long-term retirement investments. So, any cryptocurrency you’ll invest in with this method will be for long-term wealth building, which is what you want if you’re going to exploit the potential of crypto.
Investing in Cryptocurrency? Consider Doing So Through a Cryptocurrency IRA
If you’re considering joining the millions of people already in the cryptocurrency space, you might want to do so through a crypto IRA. It will not only help you save on costs, but you’ll also be spreading out your risks. Not to mention, you could reap excellent returns in the future. Get started today with a reputable crypto IRA provider.