Bitcoin has been often described as a currency used by Millennials. In fact, a survey made by Bankrate last year has revealed that Millennials are five times more likely to think that BTC is the better way to save money than their older counterparts.
Why is that? There are several reasons for that and one of them is certainly that Millennials feel burned by the current economic system. They are far more distrusting of it and have embraced Bitcoin as a positive change in their lives.
It all adds up when you see how distrustful the generation is and how it simply does not like the large institutions because they have been not enough for them. Now, when even the U. S. Social Security is starting to crumble, it is obvious that they choose alternatives like Bitcoin since it is so away from the reach of governments.
Last week, it was reported by CNBC that the United States will have an insolvent social security system by 2035. Unless something serious changes, people giving money to the country’s pension system will not be able to receive what they are owed.
People under 40 now believe that they will “never retire”, which is a very dread way to see the future, but a realistic one. With the gains from Bitcoin, though, these people may have a chance in case the government fails them. Bitcoin has seen really large gains in the past and there is no clear reason to believe that this will not happen once more, so it can be a huge opportunity.
Volatility Could End Up Being An Advantage For Taxes
Miko Matsumura, the founder of the crypto exchange Evercoin, has affirmed that not only Millennials could benefit from this new tech but also people who are older. He cites Japan, which legalized Bitcoin, as a great example. After the regulation, a lot of older people started to invest in order to diversify their assets.
Since cryptos go up and down so much, they could actually present an unexpected advantage for people who have a checkbook Individual Retirement Account (IRA), an individual retirement plan.
If you have assets like crypto which are prone to increase in value over time and are very cheap today, you could invest in them using the IRA system and you would receive several tax benefits whenever you needed to cash out later. This could work rather well with a diversified basket of crypto assets.
Crypto investors could buy low and sell high using this system and they would aid their own retirement fund with that, which is in serious danger right now.
Unfortunately, cryptos could also lose their value so this is far from a certain investment. Volatility may go up but it may also go down, because of this, it does not seem like a sensible idea to keep all your retirement money in cryptos.
The blockchain technology is still very new and very prone to drastic changes in price, so being careful is one of the most important things to do in order to not lose your money. Compared to bonds, stocks, and real estate, cryptos are a much more aggressive investment, you may win big or lose a lot. If you use it as only part of your retirement strategy, cryptocurrencies can be important.
Also, it is legal to use cryptos this way. While the law is far from very clear about how to use cryptocurrencies as this kind of investment, it does not forbid them either. Bitcoin can be legally traded for USD, EUR and several other fiat currencies around the world, there is no problem with that.
If you buy and sell cryptos for retirement purposes, you do not have to pay taxes, too, which simply is a monumental benefit. Therefore, contributing to cryptos to the IRA is simply a great idea.
The main strategy that you can use is to research the industry very well first and then try to determine your risks and rewards for doing this investment. With such dire news as public pension funds basically going bust, Bitcoin does not seem really that dangerous, at least not any more dangerous than to stand by and let the government disappoint you.