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Should Cryptocurrency Be in Your Retirement Portfolio?3 min read

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As technology evolves, FinTech changes how we do business, and currencies tank, new investment vehicles sprout up and offer alternatives to the long standing traditional methods of investing.  Look back at my post earlier today, where I spoke about tontines, and you’ll see that there are always wheels spinning when it comes to new ways to invest money.

Today I’ll share my thoughts on cryptocurrency, and more in depth, my thoughts on adding cryptocurrency to your retirement portfolio.

Cryptocurrency Investing in Retirement Accounts

This isn’t a new topic, as “Bitcoin IRAS” have been around for a few years, but the number of people taking action and getting involved with them is very minimal, even with cryptocurrency being covered in mainstream media and on the news just about every day.  It’s not secret that Bitcoin, and crypto in general, can be a dangerous game and one of many peaks and valleys, but if you believe in it for the long haul, why not add some into your retirement portfolio?

I’ll be very upfront with my take on crypto – I believe it will only grow to become a bigger part of our financial system as time passes. Although it’s technically been traded for over a decade, the number of people getting into cryptocurrency and Bitcoin grows daily.  There are arguments that can be made for the speed of transactions, the cost of doing business, and much more.

bitcoin ira

I do believe the number of tokens that will be relevant as years pass will certainly dwindle. It’ll go down to a “whos who” of technology and “meme coins” will go by the wayside.

With that said, I’ve began investing in cryptocurrency in my retirement account.  My self directed IRA allows me to invest in digital currencies, and while the number of them available to trade is limited, there are enough of them to be able to invest in different narratives in a way that can diversify the portfolio.  You’ll hear some companies refer to these cryptocurrency IRA’s as the Bitcoin IRA, but there are many more cryptocurrencies available for investment when you have access to a platform allowing you to trade digital currency.

Cryptocurrency as a Diversification Method

I’m also investing in crypto as a way to further diversify my portfolio.  As you know, I’m a precious metals investor and recommend putting up to 20% of your retirement savings into an account with a reputable precious metals company.  (My preferred vendor is Goldco.)

Following that logic and further looking to diversify my portfolio, I took 3% of my retirement portfolio and allocated it to cryptocurrency. 

Avid crypto traders and “Hodlers” alike know that the crypto bull runs come in cycles.  As we’ve been in a bear market for a while, I feel like its’ a good time to get in.  The crypto market can make serious runs, and I mean life changing runs, so it’s something you’ll want to pay attention to if you do decide to invest in crypto.

Is it for everyone?  Probably not.  I wouldn’t suggest going in blind on crypto.  You also need to have a net worth that makes it worth while to start a self directed IRA.

However, if you believe in the narrative, why not take a very small chance on it to balance your portfolio?

I haven’t yet seen a platform that allows me to invest in NFT’s, but I wouldn’t doubt that becomes a thing before too long.

 

About 

Edwin Cannon has spent his entire career in the financial industry and specializes in alternative investments and surviving marketing turbulence. He started My Retirement Paycheck to help educate consumers about retirement investment options that aren't typically introduced by advisors.