Are Bitcoin IRA Companies Actually Worth it?
In the world of finances there are a couple of practices that are considered healthy for anyone. A good example would be saving, since it is a very safe alternative to accumulate wealth and can be a pretty decent option to achieve short-term and long-term goals.
Saving is one of those things that is recommended to always do, not only to fulfill dreams but also to be prepared for any situation that might arise, since we never know what the future has in mind.
Although saving is a rather safe choice, there are many ways to go about it. Most people tend to take advantage of the practice through saving accounts, and this is mainly done because saving is a pretty good way of accumulating money in the short-term, in comparison to the long-term.
This is why saving is often done in order to either improve your professional capabilities, or get your hands on something that can greatly increase your quality of life, or your income or profit, such as buying a car, spending your money in professional education, or investing it in either an asset or a business
Long-Term Retirement Plans and IRAs
On the other hand, long-term saving plans usually benefit from IRAs instead. Also known as individual retirement accounts, these accounts allow people to save money for extended periods of time while enjoying tax-linked benefits that, in the long-term run, greatly benefit its users.
It comes with specific disadvantages, one of them being having no access to the money until you reach a certain age, usually it being 58 to 60 years old. If you decide to take out the money, you might end up paying a commission.
Therefore IRAs are only used when saving involves a retirement plan, and you are more than sure that the money you are going to save in it will go untouched until you retire. That being said… There are multiple types of IRAs that allow the execution of transactions, often considered investments.
And a very good example of this are Bitcoin IRAs, which as shown over https://www.investopedia.com/terms/b/bitcoin-ira.asp, are IRAs that allow transactions involving cryptocurrencies such as Bitcoin.
Sadly, it can be a little bit overwhelming for most people wanting to enter the world of cryptocurrencies, since there’s a lot of information to take in, as well as controversy surrounding the whole concept.
That is why having at least a basic understanding of cryptocurrencies is necessary to understand the appeal of Bitcoin-based individual retirement accounts, thus, we will give a brief explanation.
Cryptocurrencies are a form of digital currency that is linked to a new form of technology described as the “Blockchain”, which as the name implies, involves a chain combination of multiple blocks of information that are spread through multiple servers, in this case being computers spread all around the world.
This information is practically unreadable because of the way it is spread through different entities, thus it makes the digital currency untrackable, unhackable, and impenetrable, thus often called decentralized, since no financial organization is in charge of it, and it is only managed by its millions of users, and the users are protected through the blockchain even when they perform transactions such as purchasing or selling.
If you are interested, you can read even more detailed information about it over here.
What Are the Uses of Cryptocurrencies, Though?
Now… You might be asking yourself: Why do people purchase cryptocurrencies? Well, there’s a huge debate when it comes to the nature of said type of digital currency, and it is the one pretty much summarizing the controversy behind it… Are cryptocurrencies actually useful, or are they just assets used for investments?
Well, there’s a little bit of both. Cryptocurrencies can be used as a form of currency that can be exchanged to other currencies of the world in a very quick, versatile manner. With the use of your phone, you’ll be able to get most currencies you might need. However, if you think about it, credit cards can also do that most of the time!
A cryptocurrency can also be used to protect yourself from any transaction you might want to perform since, because of the nature of the asset, it is pretty much untraceable. Still… This is one reason why it is judged as a malicious creation, since it might involve illegal and immoral transactions.
In my fair opinion, an opinion that is shared by a great part of the investing community, cryptocurrencies are mainly perceived as a form of investment that is rather volatile and unpredictable, which for the adventurous, it might be considered a gold mine.
Diversification is the Actual Appeal of Bitcoin IRAs
But let’s talk about why you might want to own a Bitcoin-based IRA as a regular citizen. Well… Diversification is the main reason why! Yeah, sure, if you want to earn a huge profit through Bitcoin and the other several types of cryptocurrencies available on the market, your chances are not 0! However, when it comes to choosing the best bitcoin IRA company, you will most certainly think not only about profit, but about diversification and safety.
Why is diversification so important? Well, as the old saying goes, you should never put all your eggs in a single basket! Considering that individual retirement accounts involve waiting for great periods of time, you never know what could ever happen in the future that might ruin the value of the currency of your choice!
Thus, having different assets at your disposal certainly reduces the chances of suffering from a huge loss, since it’ll reduce the hit of problems like deflation or hyperinflation. Also, considering that cryptocurrencies have been on the rise over several years, if you play your cards right, there’s always a chance of making a profit in the process, and this is always better than having your money sitting down for +20 years!