Why Crypto? How to Invest in Crypto Through an IRA or 401k

Cryptocurrencies are an exciting new investment option. Bitcoin, the most well-known Cryptocurrency and the first in existence, has seen massive growth in value in recent years. With so much growth, bitcoin’s value has skyrocketed to over $40,000 and was once worth over $60,000.


Highlights


Invest Through Your Retirement Account

An IRA or 401k is a retirement account that allows you to invest in many assets, including stocks, bonds, and other standard investments. Accuplan takes these accounts to the next level by making them self-directed. With Accuplan, a self-directed IRA or 401k allows for a broader range of assets like cryptocurrencies, real estate, precious metals, and more.

The benefits of investing with an IRA or 401k are growing your investment tax-deferred or even tax-free. This means that you won’t pay any tax on the gains you make on your investment with a Roth IRA. With a traditional IRA, you will not be taxed until you withdraw the money from your account. Of course, there are other rules when investing in IRAs and 401ks that you’ll want to be aware of.

Investing in cryptocurrencies through an IRA or 401k is often called crypto or bitcoin IRA. A bitcoin or crypto IRA can offer the same significant benefits as standard IRAs and 401ks, major tax advantages. You can avoid paying taxes on your gains. Additionally, you can use pre-tax dollars to invest in cryptocurrencies, which can help you grow your investment more quickly.

What is Crypto?

Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, not subject to government or financial institution control. This makes them an attractive investment for those looking to break free from centralized systems.

You can use cryptocurrencies to purchase all sorts of goods and services. Bitcoin is the most popular Cryptocurrency, but there are many others, including Ethereum, Litecoin, Bitcoin Cash, and more.

Benefits to Cryptocurrency?

  • Cryptocurrencies have been known to be very profitable.
  • Cryptocurrencies are traded 24 hours a day, 365 days per year, allowing for liquid trading.
  • Investing in Cryptocurrency is an excellent way to diversify your portfolio.
  • Cryptocurrency is decentralized, meaning no banks or government institutions are involved in the transactions. This helps you reduce costs and stay anonymous while making purchases online or transferring money from one person to another. 
  • Cryptocurrencies have no physical form and exist only as computer code. Cryptocurrencies are not subject to government manipulation or interference, leading to inflation.
  • Cryptography helps keep your Cryptocurrencies safe and secure. Blockchain is a decentralized ledger system that records transactions and uses complex algorithms for verification. Cryptocurrency tends to be more secure and reliable than traditional currencies and banks because of blockchain’s underlying technology.

To learn more about the benefits of crypto, check out this article.

Drawbacks to Crypto?

  • Cryptocurrencies are subject to high-value fluctuations, so it can be challenging to determine when you should sell or buy them.
  • No government or financial institution regulates cryptocurrencies. This means they lack consumer protections if you lose your Cryptocurrencies or have them stolen from you.
  • Cryptocurrencies are digital and, therefore, can be lost if your computer crashes or you lose access to your digital wallet.

Summary

Overall, Cryptocurrencies offer investors a unique opportunity to invest in an asset not tied to the traditional financial system. Cryptocurrencies are new and have a high risk associated with them. That being said, they could be very profitable for those willing to take on the risk. Investing in crypto with your IRA or 401k can help you grow your investment more quickly and avoid paying taxes on your gains.

Be sure to research the risks of crypto and talk to a financial advisor to know whether or not this investment is suitable for you.

Invest in Crypto with Accuplan

If investing in any of the 100+ cryptocurrencies with your retirement account sounds like something you’d love to do, Accuplan has you covered. We have made it easy to do so with or without your retirement funds.

Learn more about our Crypto IRA