Bitcoin is a cryptocurrency that has been gaining in popularity. The currency is the first decentralized digital currency and worldwide payment system. The Bitcoin network operates on a peer-to-peer basis, and transactions made on the network take place directly between users through the use of cryptography. Transactions made using the network are verified by nodes and then recorded on a public ledger. The ledger is a blockchain that is maintained by a network of nodes running the network’s software.
The blockchain is a distributed and continuously growing list of records. These records, or blocks, are linked and secured through the use of cryptography. Each block will contain a link to the previous block as well as a timestamp and transaction data. One of the more interesting features of the technology is the fact that once the data has been recorded, it cannot be altered without altering all subsequent blocks.
Bitcoin and other cryptocurrencies could potentially be the wave of the future. Such payment systems offer several possible advantages compared to more traditional payment methods such as cash and credit cards.
Some of the primary potential benefits of Bitcoin include:
There are numerous ways to invest in Bitcoin, depending on your objectives. The cryptocurrency has become popular with both speculators and long-term investors, and it is widely available for purchase on multiple exchanges.
Bitcoin has been the subject of significant speculation in recent months. Investors and traders alike have flocked to the cryptocurrency in the hopes of making a quick profit. This mentality is not surprising, especially given the cryptocurrencies meteoric price rise.
Bitcoin has become so popular, in fact, that numerous derivatives exchanges such as CME Group and the Chicago Board Options Exchange in Chicago have launched derivatives products based on the cryptocurrency. Active traders now have the ability to bet on both higher prices and lower prices.
The fact that such products have been launched is a major accomplishment for Bitcoin, and would seem to provide even more legitimacy for Bitcoin and other cryptocurrencies. These listed derivatives would seemingly indicate that Bitcoin is not just the latest investment or trading fad, but rather is a means of payment and remittance that is here to stay.
Our bitcoin price charts are an easy reference for current bitcoin prices. In addition to displaying the current bitcoin price, the interactive charts allow you to examine historical bitcoin prices.
If you are looking at Bitcoin as more of a long-term investment that you plan to hold, you should still consider your financial circumstances and risk tolerance before taking action. If you are simply buying cryptocurrencies and plan on holding them, your risk is limited to the money paid for the bitcoins. In other words, if you were to buy a single bitcoin for $15,000, the most you could potentially lose is the $15,000 paid because the price cannot become worth less than zero.
Although you can simply buy and hold bitcoins, if you are focused on the long run and do not need access to your investment capital any time soon, you may want to consider investing in a Bitcoin IRA.
A Bitcoin IRA is a self-directed IRA account in which you can purchase and hold bitcoins. A self-directed IRA differs from a traditional IRA in that it allows the holder to purchase asset classes outside of stocks or bonds. A self-directed account can be used to invest in managed futures, precious metals, real estate and even Bitcoin.
To take advantage of a Bitcoin IRA, the account must be set up with an approved trust company or financial institution. This company acts as the custodian of the account, handling any purchases, sales or deliveries. The custodian also provides regular account statements and other services. Once the account is established, you can direct the custodian to purchase or sell bitcoins on your behalf.
There are two primary advantages to a Bitcoin IRA:
A possible tax deduction: Pre-tax contributions made to a traditional IRA account may be tax deductible up to IRS limits. For tax year 2017-2018, that limit is $5500 per year and $6500 per year if over age 50. This means that if under 50, you can contribute up to $5500 per year, and that $5500 may potentially be tax deductible, this saving you money on your tax bill.
Potential for tax-deferred growth: Perhaps the biggest benefit of a Bitcoin IRA is the possibility of tax-deferred growth. This means that any gains made in the account may be non-taxable provided all applicable rules and guidelines have been followed. You can trade in and out of Bitcoin or simply buy and hold-either way gains may potentially compound tax-free.
If you are interested in the long-term prospects of Bitcoin, inquire about a Bitcoin IRA today. Setting up a Bitcoin IRA is fast and convenient and may be an excellent way to make a long-term investment in Bitcoin while enjoying the potential benefits of an IRA.