The Safest Way to Invest in Bitcoin
Earlier this week, I had the privilege of speaking with one of the founders of the very first cryptocurrency IRA that’s been approved by the IRS. His name is Chris Kline, and he’s the COO at BitcoinIRA.
Now, to be completely honest, I probably wouldn’t have been interested if it hadn’t been for two facts: First, the IRS approves of the investment. That means customers aren’t going to be getting hounded by the government for trying to evade taxes. Second, the communication to set up the interview was flawless. That told me this probably wasn't some fly-by-night operation trying to scam people out of their money.
More honesty incoming...
When I went into the interview, I was pretty skeptical. I mean, there are so many companies out there that just sprung up overnight to try and take advantage of the recent boom in cryptocurrencies.
It’s like when weed was getting close to legalization and all those pump-and-dump scams sprung up to make a quick buck from unwitting investors.
But when we got done talking, I was honestly excited about what this company’s up to. And I wanted to share it with you.
Retire on Bitcoin?
I know, it sounds crazy to some of you. Heck, it sounds a little crazy to me. But it’s completely possible, and mostly thanks to this company.
The operation is a subsidiary of an established firm that’s been helping investors for years. It’s not some startup running on avocado toast and happy thoughts. It’s a real firm with real investing experts. Chris is one of them.
And it’s been set up to help people like you turn your traditional or Roth IRA or even your 401(k) into an investment in cryptocurrency. You can roll over an existing account, or you can even set up a new one with the company and keep your equity investments separate.
And the really great thing, in my opinion, is that the company is providing a seamless and integrated approach to the whole process.
The company works with trusted partners. That means you don’t have to worry about scammers or your coins being stolen by some high school kid hacking from his parents’ basement.
It provides assistance and education at every step of the way.
And, since you’re setting up an IRA, it’s tax-deferred until distribution. That means you can buy and sell within the account and not have to worry about capital gains taxes until the end.
In fact, the difference between investing in crypto in an IRA versus a non-tax-deferred account is staggering. Chris gave me an example of a test they did where they used both types of accounts. They started with $5,500 in each and made about five trades over four years.
After taxes, the regular account was up to $15 million and change. Not too shabby, right? But the IRA, since it wasn’t shelling out massive tax payments, was up over $25 million.
I don’t know about you, but I could think of a few things to do with that extra $10 million...
Now, that’s just an example. As far as I know, no actual money was invested. It was just a test to prove a point.
But when it comes to cold, hard cash, the stories are still impressive. Some of their clients started with around $350,000 in an IRA or 401(k) and are sitting on over $1 million just a few months later.
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I Quit My Job at Intel for This
The company has garnered some serious interest from some pretty smart people. There was a wave of folks who came on board not long after the company first launched last year…
And they quit their lucrative jobs at Intel just to free up those 401(k)s and get them invested in Bitcoin.
If you’re shocked to hear that, you’re not alone. I was practically speechless when Chris told me about it. I mean, it’s not Google, but you can make some serious cash working for a company like Intel. And for these people to up and leave so they could get involved with BitcoinIRA is mind-blowing.
But it’s true. Here’s an interview with one of them from CNBC. You can meet Chris, too — he’s the young guy at the beginning.
Since the Intel folks jumped ship and got in with Chris and his associates, more have followed.
The company started its first customer account last year and has already grown to around $100 million in assets under custodianship (AUC).
Everyone Is Doing It
But don’t get the wrong idea; it’s not just techies getting in on the action. I asked Chris about the company’s customer demographics, and they’re about as varied as you can get.
There are a lot of tech and urban space-driven investors in the mix. But there’s also a hot spot of folks in the late-40 to mid-60 age range, people who've spend their adulthoods learning how to use new technologies like computers, the internet, and smartphones.
And, of course, there are a lot of younger folks from the app generation. You know the ones — young people who are so familiar and comfortable with new technology that they’re quick to adopt anything that’ll make their lives easier.
But what was most surprising to me — and extremely encouraging — is that there’s no gender bias when it comes to BitcoinIRA’s customers. They’re pretty much evenly split on gender.
And I don’t know if you knew this, but that’s not the way it is in the traditional investing world. When it comes to stocks and bonds, men far outnumber their female counterparts. It’s one of the things leading to the income disparity between the two sexes that we’re seeing continue to grow today.
Self-Directed with Some Training Wheels
Now, this isn’t like some Fidelity IRA. You’re not going to get a fund manager who’s out there making trades for you. You’re in charge of trading in your account.
But the company does offer some great investor education on cryptocurrencies. You can even get a brief tutorial on cryptocurrencies without setting up an account.
And it’s currently working on automating more and more of the process.
The goal is to make your BitcoinIRA experience much like that of E-Trade or Scottrade. You’ll have the ability to put in limit orders. You’ll have access to robo-balancing — automatic rebalancing of your account to your own specific allocation strategy. You’ll even be able to have instant transactions when they’re done with the upgrades. No waiting for wires or checks to settle when you add coins or shuffle your positions from one currency to the other. So, you won’t have to worry about the price changing so much that your once-profitable trade becomes a dud.
You even get the ability to have internal diversification. That is, you don’t have to invest in just Bitcoin. You’ve got the option of owning Ethereum, Ripple, Litecoin, and even Bitcoin Cash.
I’ve shied away from cryptocurrencies for years. And I did it for many reasons. One of them was that if somebody steals them from me, they’re gone. They’re an untraceable currency. And I don’t like the sound of that.
But I do see their benefits. And, with more and more mainstream adoption coming every day, they’re more and more likely to stick around for the long run.
Chris and his coworkers at BitcoinIRA have taken some of the murkiness out of this market. And, I’d have to say, if you’re going to trade cryptocurrencies, this is the safest way I’ve ever seen. The company works with a few trusted partners so you’re not dealing with a myriad of sketchy folks when you make your trades. And it offers bank-level security for your account, your transactions, and your wallet.
Get Yourself Invested
If you’re interested in learning more about cryptocurrencies before you make the move to BitcoinIRA, take a look at this informative presentation my colleague and friend Alexandra Perry put together. She’s been helping me better understand the industry, and she can do the same for you. If you prefer to read a transcript, you can do that here.
If you’re still skeptical about this kind of investment but you want to get in on the cryptocurrency action, you’re in luck. I’ve got another friend who found just the investment for you.
It’s a company whose technology is essential for cryptocurrencies to exist. So, take a look at Luke’s presentation about the Bitcoin printing press here and learn how you can profit from cryptocurrencies without ever owning a single coin. Or you can read the transcript here if that’s more your style.
Either way you decide to play it, you stand to make yourself a tidy return. So, check out those presentations. And take a look at the BitcoinIRA site when you’re done if you want to learn more about the company.
Also, keep an eye out for Alexandra's podcast, where she'll be talking live with Chris and delving even deeper into the world of cryptocurrency investments.
To investing with integrity (and taking advantage of every option),
Energy and Capital
Follow me on Twitter @AllBeingsEqual
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