Owning Bitcoin in your retirement account may be easier than you think...
The benefits of GBTC...
One of the problems with locking in profits in bitcoin is the tax issue that inevitable comes with it.
Trading bitcoin is difficult enough to do consistently profitable, but when you factor in the commission/fees as well as the taxes, it becomes that much more difficult.
What if there was a way you could trade bitcoin tax free and pay little to no fees?
Well, I'm here to tell you that there is!
There are multiple services out there popping up allowing to you buying bitcoin in retirement accounts, each one asking you to pay a tremendous fee to do so.
Those aren't what I am talking about here, nope, I'm talking about GBTC.
GBTC is the Bitcoin Investment Trust created and launched by Grayscale almost a decade ago.
(Source: https://medium.com/grayscale-investments/gbtc-sec-filing-8b4cb229088)
The premium recently bottomed around 7% recently and has since been climbing back up around 20% or so.
So, why GBTC?
There are several reasons to own GBTC.
For one, it can be owned in a self directed IRA. You know, those individual retirement accounts that you love to tinker around with?
Well, you can add GBTC in there and in most cases pay no trading fees to do so.
Another reason is the premium issue.
Since GBTC was created it has always traded at a premium to its bitcoin holdings, if you time things right you can get an increase in the bitcoin price as well as an increase in the premium on GBTC, which means GBTC can actually outperform bitcoin.
Crazy I know, but it's true:
(Source: https://bittrex.com/Market/Index?MarketName=USD-BTC)
And finally the other main reason to own GBTC...
Custody!
Everyone likes to champion the idea of being your own bank and "not your keys not your crypto", well news flash for you, the vast majority of people are not capable of providing adequate security and protection for themselves.
There is a reason that banks spend billions every year on security, it's a big deal.
With GBTC, your brokerage bares the responsibility of holding the shares for you, you have no hodling risk.
So, while many crypto purists out there will poo poo GBTC until their blue in the face, most level headed rational investors will quickly see that there are serious benefits to holding it.
All of this and I didn't even tough on the potential of doing a like kind exchange where you exchange your btc for shares of GBTC and collect a nice premium on your holdings. ;)
Stay informed my friends.
-Doc
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Been riding GBTC up over the last few weeks. Its been mighty good to me.
The biggest advantage to me is that GBTC accesses funds, a lot, that is not normally able to buy Bitcoin.
Retirement accounts, IRAs, have a ton more capital than most trading accounts. Simply, many people do not have cash accounts yet do have IRAs.
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Yep, that is a great point and something many people may not realize.
Bitcoin is my retirement account though 😅
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Well there you go. For those with money in IRAs already, this is a way they can put some of that money into bitcoin.
Oh I know, it's just that the idea of a legit retirement account is so foreign to me. I only know a couple people that have them, most people I know don't. I'm just hoping on bitcoin being able to explode in value so I'll be able to retire one day. If not I will be eligible for ~$800/month from social security based on the last estimate I received LOL
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The tax benefits make it pretty attractive to me.
You must have a good job then 😆