5 Reasonsto Consider Cryptocurrencies
Cryptocurrencies are a whole new asset class with little to no real correlation to equities, real estate, bonds, or government currencies. Having an asset that is not effected by other markets or financial institution manipulation, like we saw in 2008, can be a big advantage. Allocating even a small percentage of your investable assets into cryptocurrencies can help further diversify your overall portfolio.
Just a few years ago, cryptocurrencies were fringe investment vehicles. Very few people around the world were paying attention. Given their recent market rallies, however, cryptocurrencies today make headlines nearly every day. Society as a whole is learning about and embracing this growing technology, and new adoption is taking place on a global scale.
Perhaps the most exciting aspect for cryptocurrencies is that they can be purchased by anyone—anywhere! No other investment in the world has this level of widespread access. You can purchase a fraction of a Bitcoin as small as one hundred-millionth—0.00000001. What does this mean? If Bitcoin’s price went to $10 million dollars per coin, you could still invest just 10 cents. Everybody can invest in Bitcoin, no matter their financial situation.
Bitcoin was designed with a long-term fixed supply of coins—21 million. Similar to other commodities including gold, silver and oil, the concept of scarcity creates the potential for value. If supply is fixed, only demand will drive prices for the currency. Bitcoin is still in its initial stages of awareness and acceptance, meaning there is plenty of room for increased demand and thus increased prices if demand increases. Likewise, many other cryptocurrencies are designed with a similarly limited supply to reinforce the concept of digital scarcity.
In August 2017, an IRS ruling clarified the status of cryptocurrencies as “personal property” for tax purposes, making them eligible to be held as retirement assets in self-directed IRAs. Additionally, as cryptocurrencies now fall under the category of personal property, an IRS-approved custodian is required to handle this investment. By working with a well-established custodian, BlockMint helps investors take advantage of tax-deferred cryptocurrency growth.