There are many aspects of life that are very important in order to lead a happy, comfortable existence. Health, both mental and physical, are a good example, and although we can still be happy while dealing with some afflictions, it is true that being generally healthy is a good trait to enjoy, and a blessing in and of itself.
But, among the things we can all agree to say that are very important in life, finances is definitely one of the most palpable things. Money is a very essential thing to have, not because we need money to be happy, but because we need a certain level of financial stability to be comfortable enough to spend time on our hobbies and overall personal goals.
Considering that we need money for a wide range of things, this is not really a surprise. The services we enjoy, like gas, water, electricity, and internet, as well as the food we eat and the roof that protects us, require us to have money. Without it, life becomes significantly harder!
Often people get money through working, yet there are other practices that can greatly influence our financial stability, such as saving and investing. Sadly, when it comes to working, there will be a moment in time where we won’t be able to work as efficiently anymore, thus, what is often recommended is to be ready for such a situation.
Here’s where IRAs come in handy. IRA stands for Individual Retirement Account, and it’s a special type of account that focuses completely on the idea of retiring. When we talk about planning your retirement, IRAs tend to be a very useful asset to own, since it provides multiple tax-related benefits for people who want to save their money for the long-term run. Over at https://en.wikipedia.org/wiki/Individual_retirement_account you can learn moren about said benefits!
Now, there are many different types of IRAs. Traditional IRAs are the ones who mainly focus on using currencies as a form of asset, but you can find, for example, gold-based Individual Retirement Accounts which work with precious metals like gold, silver and palladium.
In this article, however, we will mainly focus on what is Bitcoin and Bitcoin IRAs, a specific type of Individual Retirement Account that allows the use of currencies as a form of investment for cryptocurrencies. But before we get into that, I believe understanding what cryptocurrencies are is mandatory for anyone to decide whether this type of IRA is worth it!
What Are Cryptocurrencies?
Cryptocurrencies are a new form of digital currency that has gained a lot of popularity and presence in the market over the last couple of years.
It is well known for its considerably volatile and unpredictable nature, especially when we talk about the most popular form of cryptocurrency: The bitcoin. Back in the day, one single bitcoin could be obtained for around $100, and nowadays one single bitcoin can cost up to $44,602.
There’s a lot of controversy regarding this form of digital currency since its uses are a little bit polemic, mainly because of its untraceable and decentralized nature. Cryptocurrencies work through a technology that is known as blockchain, a technology that records and deciphers information using multiple servers (or computers) making it pretty much impossible to hack, track, change and follow.
For this reason, this digital currency is often used for malicious purposes, but it’s main purpose is to be used as a form of investment, since a lot of cryptocurrencies have only increased in price over the years, including the bitcoin.
But here’s where things do get complicated, since it can be difficult for a beginner to make good investments involving cryptocurrencies, and there are many reasons for that.
Why Cryptocurrencies are Complicated
As showcased over this article, a lot of professional economists believe that cryptocurrencies are a bubble that has been blown out of proportion by people wanting to take advantage of it in the form of investments.
There’s proof regarding this situation, but the most prominent one is how Elon Musk influenced the value of bitcoin through investing large sums of money in it, only to resell it once the value had increased, earning millions and millions of USD in the process.
Of course, once he sold, the value of the bitcoin decreased in the process, going from $50,000 to nearly $30,000. This made a lot of people lose a considerable amount of money in the process.
Thing is: If you do manage to invest your money wisely and get lucky while investing in cryptocurrencies, there’s a chance you will make good money. That being said, it also depends on the type of cryptocurrency you decide to invest in. And this can influence your experience when it comes to Bitcoin IRAs
Choosing the Right Investment
Although they are usually referred to as bitcoin Bitcoin IRAs, a bitcoin IRA company usually allows transactions and investment in a wide variety of cryptocurrencies available in the market. Some of the most famous one you can find include:
- Binance coin
The greatest difference between bitcoin and some of these choices is how expensive they are in comparison. Ethereum, for example, is worth around $3,000. So, a wise choice is (especially if you are building your portfolio and earning experience in the field) to start investing in more affordable choices, and of course, diversify your portfolio on different options to avoid big losses.
Because of the nature of these IRAs, transactions tend to be very easy to handle and they involve the use of money that you wouldn’t otherwise be able to use, making it possible to earn a profit that would be impossible to obtain if you were to use a traditional Individual Retirement Account, thus, for people aiming to learn the arts of investments, they are considered a great beginner opportunity to start with.