In this post, I will show you the pros and cons of retirement savings in cryptocurrency.
Today, technologies are already so closely connected with our everyday life, that we probably cannot do otherwise. On average, almost every person over the age of 10 has their own mobile phone, computer, digital watch, e-book, and a bunch of other electronics.
With regard to pensioners and people of the age – the time when old people “lagged behind” has already passed. Today, everyone knows how to use the Internet, make online payments, use credit or debit cards to transfer funds, etc. So who said that cryptocurrencies are only for “young programmers”?
Here is the list of the main advantages of working with cryptocurrency assets:
- Cryptocurrencies are tax-free
- No inflation
- Low fees
- The market is available 24/7
- Open source
- Cryptocurrencies cannot be counterfeited
- Speed of transactions
- Lack of intermediaries and third parties
- Reliable data protection
- Accessibility all over the world
and it is only a small part of all the pros of using.
Retirement Savings In Cryptocurrency Is It Possible?
First, let’s break down what cryptocurrency is.
Cryptocurrencies are digital money. Cryptocurrency is designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. It does not exist in physical form (like fiat money) and is not issued by a central authority.
Fiat currencies or fiat money are government-issued currencies that are not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it as is the case for commodity money. The most popular fiat money are Euro, US dollars, British Pound Sterling, and others.
Now, back to our question – can you stash your retirement savings in crypto? Sure!
In essence, Cryptocurrencies* are the financial instruments for storing, exchanging, or buying/selling funds. You can exchange your fiat money for cryptocurrency assets.
Since the inception of the cryptocurrency industry and until now, it has undergone colossal changes. The world of cryptocurrency has evolved into a diverse ecosystem with lots of earning opportunities.
Moreover, Bitcoin (the number 1 cryptocurrency*) is showing growth rates like no other fiat currency** in the world.
For example, let’s consider Bitcoin price changes since its highest point in 2017 till now. The asset showed signs of growth throughout all 2017 year and on December 17th it reached its all-time high of over $20,000.
This growth of the coin brought millions of people into the crypto world. Everyone wanted to learn more about cryptocurrencies and make money on them. The market was filled with newcomers.
A bit later, the Bitcoin price has declined significantly throughout 2018 and practically throughout 2019. Then, by September 2019, the price of Bitcoin has grown significantly, reaching over $10,000 (instead of $3,000-4,000 at the beginning of the year).
2020 started off promisingly, but almost at the very beginning of the year, the global economy reeled from the COVID-19 strike. Interestingly, BTC also performed well here, in contrast to traditional finance. We can say that this year all world currencies succumbed to the crisis.
In March 2020, the Bitcoin price fell below $5,000, but after that, it showed signs of continuous growth for almost the entire year. Now the price of the asset is confidently holding above $18,000 and is clearly not going to stop there.
Can you remember such fluctuations in price per year for USD or EUR? Of course not! And it, by the way, is an additional reason that the cryptocurrency market is so popular.
So if speaking of the pros and cons of retirement savings in crypto, there are certainly quite solid advantages. Of course, there is another side — cryptocurrencies are volatile. The price can change rapidly and the value of the asset may drop dramatically.
But that is not the reason to refuse this option. You can diversify your savings portfolio with different assets and hedge the risks. It can be different cryptocurrencies – popular ones like Bitcoin, Ethereum, Ripple.
Also, you can choose coins of some newer crypto projects like LINK, or ATOM. Or go for stablecoins like USDT, GUSD and the like – their value is pegged to dollar at 1:1 ratio.
The choice is huge, so are the opportunities with crypto. All you have to do is study the asset well before investing in it and make an informed decision.
How To Exchange Your Retirement Savings For Cryptocurrencies
Everything is just simple, you need to create an account on a cryptocurrency exchange platform that supports both fiat and crypto money. Complete the verification of your identity and you’ll be able to buy crypto.
Some exchanges allow you to buy Bitcoins directly from your Visa or Mastercard.
If you want to check the price, there are tools for that.
For example, Bitcoin to USD calculator will calculate the price for you – just indicate what amount of BTC you want to buy or US Dollars amount you want to spend. After you’ll be able to buy your crypto (not only Bitcoin, but more different crypto tokens).
What Should I Do With My Crypto Next?
There are two possible ways: active cryptocurrency trading and Buy&HODL strategy.
Active cryptocurrency trading is Buy&Sell operations between users (fiat-to-crypto, crypto-to-crypto, or crypto-to-fiat) with the goal to buy cheaper and sell at a higher price.
Buy&HODL strategy implies fewer iterations, just hold the assets for long-term waiting for the price growth.
When working with cryptocurrencies, the main thing is to understand their basic principle of operation, and the rest of the experience will come with time.
Invest some time in research and break the myth that the new technologies are not for everyone!
- How To Make Money With Bitcoin In 2020
- When Is The Best Time To Trade Cryptocurrencies?
- Market Overview of the Crypto Sector for March 2020
- What Is HODL In The Cryptocurrency World?
- 7 Top Reasons To Buy And Sell Cryptocurrencies
- What Is the Minimum Amount I Can Invest in Bitcoin?
- 5 Best Bitcoin Alternatives For Beginners You Should Know