Gold IRA’s have been a popular investment option for as long as self-directed IRA’s have existed. Bitcoin IRA’s on the other hand is the latest form of investment but are already rapidly increasing in popularity. So which is better to invest in for your IRA?
It all comes down to personal preference as well as your financial goals. Weighing the pros and cons of each type of investment is crucial to making the best decision for your IRA. Let’s look at some of the benefits and drawbacks of each to help you decide.
Benefits of Gold IRA Investment
Benefits
In general, gold is the safer investment choice and is probably going to keep increasing in value no matter what economic setbacks are thrown it’s way. There have only been a few instances where gold has decreased in value but the precious metal has always been able to recover.
Gold is cheaper to invest in than Bitcoin. As of 3 May 2021, the gold price was $1,776 per ounce whereas Bitcoin cost around $58,000. You are going to be able to buy more than 30 times the amount of gold than Bitcoin.
Drawbacks
Gold is a tangible asset and therefore needs to be held in a safe or bank vault. In other words, it can be stolen.
Although gold is a liquid asset, it will need to be converted to cash when you need it.
Benefits Of Bitcoin IRA Investment
Benefits
Bitcoin is a very volatile investment and will fluctuate greatly. While it is one of the most unstable investment options out there, it can provide much greater gains in a much shorter time period than gold ever will.
Bitcoin is not a tangible asset and can be held in a Hard-Wallet kept on a personal computer, with a reputable financial institution or entirely offline. Remember that Bitcoin is not a real coin but rather a crypto-currency that isn’t backed by any government.
Drawbacks
The most notable drawback of investing in Bitcoin is its volatility. It has been known to lose up to 80% per cent of its value and regain that in a relatively short period of time. This volatility makes Bitcoin a risky IRA investment, especially when compared to the safety of gold.
There is also much uncertainty as to whether Bitcoin is here to stay. Naysayers have been predicting the downfall of the currency for years but it has not just survived but thrived.
Both bitcoin and gold are mined and both are probably a limited resource. However, Bitcoin is forecast to run out in the next decade whereas no one can even begin to estimate when gold resources will dry up.
At the end of the day, it is a hare and tortoise scenario. The choice comes down to whether you are willing to take risks for greater gains (bitcoin) or prefer a safer investment with lower returns (gold). Or should you include both in your self-directed IRA investment portfolio?
It is highly recommended to discuss your options with a financial advisor before making a decision.
