Cryptocurrency is a lucrative investment model and offers long-term benefits. The investment became mainstream in 2009. Since then the investment model has grown substantially with investment flowing globally. As we speak, there are more than 19k+ cryptocurrencies in the investment market. The market volume of these tokens has increased by more than $3 trillion. Major countries including India and the US have investors trying their luck in it. Check these trading tips from https://guerillacoin.com/.
With the growing interest in cryptos, many countries are also looking at regulating it. The US and the UK have signed a Memorandum of Understanding (MoU) to better regulate cryptos. Both countries will work to develop a better governance model around crypto tokens.
All cryptocurrencies in the investment market make use of blockchain philosophy. Blockchain is nothing but a simple online ledger that stores user transactions. The transactions are then stored in the public network accessible to everyone on the net. Admin users in the network can control the flow of information available in this network. The token also makes use of decentralized finance. Through this technology, transactions are completely managed in the digital world. The role of a bank comes in only when an investor decides to liquidate their holdings.
Cryptocurrency as an Investment scheme for retirement
Yes, we always come across scenarios on having funds for your retirement phase. In certain cases, many tend to plan their holdings. In the traditional currency world, there are various investment benefit schemes for retirement. Investors are allowed to buy various long-term stocks, bonds, and even gold for the future. Other retirement schemes are monthly. In such cases, you are allowed to withdraw your funds after your retirement.
Now, think about using crypto as an investment for your retirement.
To plan your retirement scheme, you need to open an Investment Retirement Account (IRA). This IRA account needs to be recognized by an IRS that is designed to enable crypto transactions.
As per IRS, cryptocurrencies are generally considered property. It has made taxation easier on cryptos.
One of the most challenging aspects of IRA is finding a company that will allow you to do so. A few examples of IRA companies that you may consider include Bitcoin IRA, equity trust, and regal assets.
Advantages of IRA in cryptocurrencies
Let us look at a few advantages of considering an IRA in cryptos.
Diversify your funds
Yes, diversifying your existing holdings is the primary advantage of an IRA. It will reduce challenges that come your way due to market fluctuations. Diversifying your holdings will also allow you to increase your chances of retirement benefits. It will also work to your advantage due to major market crashes.
Potential to grow your holding
This is another reason for considering a retirement scheme through cryptos. The tokens have been a promising investment model. The price of each crypto token continues to increase. This market trend has given investors the confidence to make their investment in it.
Disadvantages of IRA in cryptocurrencies
Extremely volatile market
Yes, you need to understand it. Despite trying for long-term retirement, market fluctuation does not change. A classic example of this scenario is the current market crash. Bitcoin traded at $69k per token has fallen to $20k. This price volatility needs to be understood before you make your investment. It also makes this investment model an unstable scheme. Hence, if you are looking only for profits then it is better not to try cryptos.
Risk of loss through price changes
Many crypto tokens do not have the backing of any regulatory agencies. Hence, the investor interest is not taken care of when you make your investments. Cryptocurrencies always pose the risk of collapsing within a few months of purchase. While Terra looked like a promising investment model the token was completely wiped out. Investors have lost their entire holdings in the past two months. There are other tokens also in the pipeline that may follow the legacy of Terra.
Is it good to invest in a crypto IRA?
This is a question to debate. Before making any investments in crypto, you need to consider the market fluctuations. The prices are extremely volatile and subject to change every often. Hence, you need to consider diversifying your investments. You can also look at cryptos as a long-term investment.