How to invest in Cryptocurrencies
As you already know, many cryptocurrencies are down from their previous highs reached a couple of years ago. But that doesn’t mean that Bitcoin and the cornucopia of alt-coins are going to remain low. Many cryptocurrencies have gained value and will continue increase in value as time goes on.
We are in the beginning of a new era of digital currency built upon the blockchain. It is not too late to invest, rather it is a good time to buy in as the price of Bitcoin is undervalued. Yes things are bearish but judging by the all time highs, a bull run is inevitable.
Purchasing Bitcoin online is not as simple as it used to be. Coinbase which is considered an entry level way to get into the crypto market stopped accepting credit cards in February 2018 for U.S. customers. Luckily, there are still many ways to buy bitcoin instantly online using various exchangers.
One can even utilize a self-directed IRA to invest in cryptocurrency. That means a tax free status on buying and selling which is huge considering every trade is technically taxable.
Understand that that it needs to be done in the right way. Setting up a cryptocurrency trading account in a retirement plan umbrella is not a cinch. None of the big brokerage firms offer direct cryptocurrency investment options. And you certainly cannot simply move funds from your current Individual Retirement Account onto a cryptocurrency exchange.
Granted there are a few niche firms offering special Bitcoin IRA programs, but they are limited and have high fees associated with them. While these IRA programs are easy to use, secure and quick to set up, they need a middleman who takes a cut of every trade, sometimes commissions on each trade upwards of 15%. Many of these programs offer only a few main cryptocurrencies and the trades take longer because of security and their broker buy/sell transactions which can be a 2-4-day process.
If you are going to hodl these basic crypto IRA programs can be worth the trade off but if you want to take advantage of pumps and dumps there is something that puts total control into your hands with no brokers to wait for or commissions to pay for. It is called a “Checkbook IRA.”
For true control and flexibility, an IRA LLC or Solo 401(k) is the way to go.
With a plan like this you can:
- Create and fund trading accounts with multiple cryptocurrency exchanges of your choosing
- Invest in any cryptocurrency, not just Bitcoin, Ethereum and Litecoin.
- Use your own wallet
- Make trades whenever you want in real-time, without 3rd party paperwork, delays or commissions
How is this possible you may ask? It’s because of the “checkbook control” these structures provide. Since the retirement plan assets are held in a legal entity that you control – LLC for the IRA, trust for the 401(k) –you can directly manage all aspects of your IRA cryptocurrency investing. There is no custodian in your way, you make the trades and fill your bags on your own accord. All you need to do is have money in your 401(k) or Individual Retirement Account to begin with, then call the right Checkbook IRA company and your off to the races.