IRA and Cryptocurrencies
IRA’s are virtual baby.
Bitcoin is a virtual currency that uses blockchain technology. If you want to know more about what that means, you’re going to have to find that on another channel. Should you know? Probably. Do you know? Probably not. So before you consider investing in Bitcoin out of your IRA, you might want to know what you are buying. Go ahead. I’ll wait.
It’s a touch complicated. The lesson. Don’t buy into a bubble at the wrong time because you didn’t research the investment. Is Bitcoin substantiated? Is any currency substantiated? Did I just warp your brain? Yeah, I did. Because this is Money Matters.
When all currency is Fiat, it’s time to create currency. That’s how you really make money.
If you’re not that smart, here’s a thought. Right now, Bitcoin can be exchanged for goods, services, and even dollars. It is currency today, and boy has it gone up.
From $0.30 sense to a shocking $3,772.00 per Bitcoin.
Are you kidding me?
So of course, you want to know if you can buy Bitcoin from an IRA.
FIRST, yes, your IRA can own Bitcoin, Ethereum and Litecoin. In fact, your IRA can own anything other than life insurance, S-Corp stock and collectibles. If you want to buy cryptocurrencies to dominate the virtual market when you upload your consciousness to a machine in the transhuman future, you can start building your virtual empire today.
Bitcoin is taxed.
The IRS has stated that virtual currency is property. The sale of property is treated as a capital gain, so buying and selling crypto for investment purposes will not trigger a UBIT or any of the other adverse tax consequences that can occasionally arise in an IRA.
The process of buying cyptocurrency with your IRA isn’t as easy as moving some money around though. Here are the steps you need to take to get started in digital currency.
First, you need a self-directed IRA whose custodian allows for alternative assets. If this isn’t something your custodian can do you may need to find a custodian who will meet with your investment criteria.
You will invest funds from the IRA into the LLC you created when you went self-directed. Your IRA will own the LLC and that LLC will have a business checking account.
Then you buy Bitcoin just like everyone else. Your LLC checking account will need to establish a “wallet” through a company like Coinbase. Through this wallet, you can buy, sell and store cryptocurrency.
You can buy into a publicly traded fund that owns Bitcoin, but if you want to own Bitcoin directly with your IRA, you need to follow these steps.
Don’t underestimate Bitcoin and other forms of cryptocurrency. You’re living in the digital age now. Cryptocurrencies have great potential; as of this writing one Bitcoin is worth almost triple that of an ounce of gold.
However, as with any new investment, make sure you proceed with caution. By the time you read this article, Bitcoin could be worth nothing, or it could be well on its way to being the dominant currency of the future. The American dollar wasn’t always the international standard. Currency evolves with the market.
Keep your eye on Bitcoin. Stable or not, today, Bitcoin matters, and this, afterall, is Money Matters.