Home 2022 Bitcoin Comes With a Learning Curve…

#crypto #bitcoin #401k #investment #retirement


“…You can now add Bitcoin to your 401(k) plan”–Paul Ebeling

Fidelity Investments, the country’s largest retirement-plan provider announced it would add Bitcoin as an investment option for 401(k) plans. Up to 20% of 401(k) funds can be allocated to Bitcoin under the new policy, through Fidelity’s digital asset platform

The temptation to experiment with a risky investment might be stronger now for Americans than in the past; a new Gallup poll shows just 46% of Americans rate their personal finances positively, down from 57% just a year ago.

The Big Q: Is this alternative asset right for you?

The Big A: Here’s what to consider.

Bitcoin is the world’s 1st decentralized cryptocurrency. Unlike national currencies, linked to a country’s financial system, Bitcoin has no assets behind it to support its value.

The price of Bitcoin has fluctuated greatly in recent years. Bitcoin reached an all-time high on Nov. 10, 2021, when it was valued at $64,995. But by May 2022, it had declined to $28,305. In June 2022, it had only gradually increased to $29,127. These massive swings make Bitcoin a risky investment.

That volatility is coupled with a lack of regulatory oversight, which is enough to give many of those nearing retirement pause.

So, if you would have invested in Bitcoin in November 2021 and let your funds remain untouched until May, you would have lost about half of your money. Perhaps the price of Bitcoin will again pick up, but if you’re about to retire, you might not have time to wait. Do you have the risk tolerance to potentially see your retirement savings decline?

These are the following 5 concerns that make cryptocurrency a risky bet:

  • Speculative and volatile investments: The Securities and Exchange Commission considers cryptocurrency highly speculative, especially considering the extreme price volatility.
  • The challenge of making informed decisions: Cryptocurrencies are typically billed as the “next big thing” in finance, and it can be hard — even for seasoned investors — to separate the hype from the reality. These aren’t typical retirement plan investments, which are considered prudent choices by many. It can be difficult for many people to make a truly educated decision.
  • Recordkeeping concerns: Some methods of holding cryptocurrencies can be vulnerable to hackers — remember, cryptocurrency is held in a digital wallet. Unlike other retirement assets that can be held in trust, cryptocurrency is difficult to manage, which could make it an unwise investment for some retirees.
  • Valuation concerns: Cryptocurrency valuations aren’t guaranteed to be accurate. The cryptocurrency market fundamentals are still evolving, and the academics behind valuation haven’t caught up to the lived reality. This makes it difficult to accurately value the currency.
  • Evolving regulatory environment: The rules around cryptocurrency are still changing, and the best way to enforce them is still in question.

What to ask yourself: There are still many questions surrounding the value of cryptocurrency and the best way to regulate it. To what degree is certainty important to you when choosing how to invest your funds for retirement?

Cryptocurrencies are conceptual and can be difficult for a lot of people to understand. When you buy a house, it’s easy to understand the ways you could make money on that investment. You could make home improvements, or your neighborhood might become more desirable, and eventually, you could possibly sell your house at a profit. But how can you tell what influences the value of Bitcoin? The answer is a bit murkier.

Even just understanding the process of how Bitcoin is stored can come with a learning curve for many people. But you can learn. There are many online resources that can walk you through Bitcoin basics. Your financial advisor should also be able to help you grasp the fundamentals of this alternative currency.

If you’re going to get started with Bitcoin, you should, at a minimum, understand how to buy, use and invest with Bitcoin. You’ll want to know how it’s stored, who uses it, how it’s mined and what influences its value. This can help you determine if you want to allocate a portion of your 401(k) toward Bitcoin and to what extent you will invest.

What to ask yourself: How much time are you willing to commit to learning about Bitcoin? Can you increase your knowledge to a point where you feel comfortable making this investment?

Bottom line: The possibility of adding Bitcoin to your 401(k) has generated a lot of excitement among Americans who are curious about what digital currencies are all about. While it could prove to be a great option for retirement, remember that it’s still in the early stages and significantly speculative. Commit yourself to learning the fundamentals of cryptocurrency before jumping in with both feet.

BTC is trading at $24,503 having cracked the resistance at $24,000 at time of writing.

The Knights Platform is an electronic network that links the trading floors of every relevant Crypto Exchange

Market participants, Brokers and market makers can take a price on any of the linked exchanges to find and execute the best price available. Eventually, as they are on boarded, a broker on the floor of one exchange could directly place an order through Knights rather than going through a broker on another exchange.

A tip of my hat to sovereign individuals with satoshis and Bitcoin in cold storage with our firm. Click here

Check Price Action

Have a prosperous day, Keep the Faith!

You may also like


Your Trusted Source for Capital Markets & Related News

© 2024 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.