Since Boston-based retirement plan provider Fidelity announced last month that it would allow bitcoin investments in the 401(k) accounts of 23,000 companies, there has been a growing interest in “how to add bitcoin to your retirement account.”
Fidelity said it will allow its 20 million participants — representing $2.7 trillion in assets — the opportunity to invest in bitcoin through their 401(k) retirement accounts later this year.
Is it practical? If yes, is it a good idea? Cryptocurrencies are known to be the most volatile digital asset and to fully relate retirement benefits to them requires a deep understanding of the massive changing trends in the global crypto market. In the last month alone, $800 billion of valuations were wiped from the market in the recent cryptocurrency crash.
In the past few years, the craze for investing in cryptocurrencies has been completely at odds with the original principles of cryptocurrency blockchain systems such as decentralization and immutability. Most bitcoins are still owned by “whales” – someone with large amounts of bitcoin – and institutional investors.
The mainstream cryptocurrency has promised to “democratize” a lot of things, but in reality, the 82 richest crypto-wallet holders account for nearly 15% of the total bitcoin supply, according to River Financial, a San Francisco-based financial services company.
Anonymity in the crypto world makes it risky
Due to its false anonymity to players in the crypto world, it has a high potential for scams, rug pulling, and other types of dishonest tactics. This means that if you choose to allocate your money to an Individual Retirement Account (IRA) provider, you will need to properly screen it first.
Quartz spoke to former President Joe Biden’s senior adviser, Moises ‘Moe’ Vella, who serves on the board of TransparentBusiness, the company that launched the crypto token Unicoin. He talks about the current collapse of cryptocurrency, crypto retirement plans, and the future of finance.
what are you made of Current encryption crash?
It was inevitable, given that traditional cryptocurrencies are not backed by any assets. There is a need to think about creating cryptocurrencies That addresses the high volatility of digital currencies. Cryptocurrencies backed by any asset have only the perceived value and even a single tweet from an influencer like Elon Musk can affect their valuation significantly.
Do youWhat do you think about using Bitcoin for retirement plans?
Retirement plans should focus on more stable investments. Few retirees are willing to rely on currencies other than assets that could lose value entirely. Stock-backed cryptocurrencies that pay dividends are safer options. For crypto to become reliable for retirement investments, change is needed. It should rely on a broad portfolio of growing assets, such as shares in emerging growth companies. Unicoin is bringing back the “gold standard” using stocks in emerging growth companies as a superior type of asset: gold doesn’t grow while a portfolio of good stocks grows.
Stablecoins offer questionable stability. It does not provide any return on the investment opportunity because its value will not exceed the US dollar
what Can you say about the stability stablecoins?
Stablecoins offer questionable stability, as we have all discovered in the current market slump. They do not offer any return on the investment opportunity because its value will not exceed the US dollar or other fiat currencies to which they are tied. The combination of these two factors makes it a highly questionable investment option.
Countries like El Salvador and The cInteral african sepublic You are using it now Bbitcoin in the name ofInfrared The official currency. your thoughts?
I see it as an irreversible trend. Cryptocurrencies will compete successfully with fiat currencies and governments will have to recognize and regulate them. Decentralized finance is part of the future of finance. Decentralization has its advantages and disadvantages. Decentralized cryptocurrencies, for example, cannot do significant brand work because not everyone on the blockchain can see all the nodes and therefore it is difficult to scale. However, the downsides to transparency remain.