Bitcoin IRA

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maxgrowth
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Bitcoin IRA

Post by maxgrowth » Sun Dec 10, 2017 1:05 am

Dear Bogleheads,

Happy Holidays! I wish you and your family a very Merry Christmas and a Prosperous New Year!

Lately, I have received a lot of information in my email box in regards to Bitcoin Stock/Bitcoin IRA investment. The stock price for Bitcoin has gone crazy over $1,000/share.

I have maximized my Traditional IRA, Roth IRA, and taxable MF account. I am not eligible for 401K due to HCE status.

I am thinking about Bitcoin IRA investment. Should I do it? If so, how?

As always, thank you so much for your advice. You Bogleheads are awesome!

aristotelian
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Re: Bitcoin IRA

Post by aristotelian » Sun Dec 10, 2017 1:15 am

If you max your traditional IRA, you can't contribute to a separate Bitcoin IRA.

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saltycaper
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Re: Bitcoin IRA

Post by saltycaper » Sun Dec 10, 2017 1:35 am

I would not put Bitcoin in an IRA as I would want to be able to harvest expected losses.
"I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said." --Alan Greenspan

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timboktoo
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Re: Bitcoin IRA

Post by timboktoo » Sun Dec 10, 2017 1:46 am

Mr. Bogle suggests that we "Avoid Bitcoin like the plague".

- Tim

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Watty
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Re: Bitcoin IRA

Post by Watty » Sun Dec 10, 2017 2:19 am

If you search the boards you will find a lot of threads about bitcoin.

My takeaway(for what little that is worth) is that the main argument for buying it is that it might continue to go up so it is pure speculation.

Unfortunately you are late to that party and when you start getting lots of email about something like that and hearing about it all the time then it is a pretty good sign that you are closer to the end off the party than the beginning.

A really big question is that if you buy some bitcoin today, then just who will be willing to pay you twice as much for it in the not too distant future.

https://www.investopedia.com/terms/g/gr ... theory.asp

If you doubt that it is speculation then just consider how many people you know that have actually used bitcoin to purchase something like a cup of coffee with it. That is probably zero. You probably don't even know someone that knows someone that has made a bitcoin purchase.

It would also be good to thoroughly check your computer for viruses and malware if you have been opening unsolicited emails about things like bitcoin.

Unfortunately one of the hallmarks of a bubble is that it can go on longer and higher than people would think possible so it is also hard to predict that it will collapse in the near future.

runner3081
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Re: Bitcoin IRA

Post by runner3081 » Sun Dec 10, 2017 7:51 am

maxgrowth wrote:
Sun Dec 10, 2017 1:05 am
Lately, I have received a lot of information in my email box in regards to Bitcoin Stock/Bitcoin IRA investment. The stock price for Bitcoin has gone crazy over $1,000/share.
That should tell you to go away. Throw them in the spam folder along with the ads for men's performance pills and $500 Walmart GIft Card offers.

P.S. - It is more like $16K now.

livesoft
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Re: Bitcoin IRA

Post by livesoft » Sun Dec 10, 2017 8:00 am

I feel left out: I have received absolutely no bitcoin e-mail in any of my numerous e-mail boxes. How does that even happen?

BTW, I missed this bubble, so I'll just have to wait for the next one.
This signature message sponsored by sscritic: Learn to fish.

Valuethinker
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Re: Bitcoin IRA

Post by Valuethinker » Sun Dec 10, 2017 11:29 am

maxgrowth wrote:
Sun Dec 10, 2017 1:05 am
Dear Bogleheads,

Happy Holidays! I wish you and your family a very Merry Christmas and a Prosperous New Year!

Lately, I have received a lot of information in my email box in regards to Bitcoin Stock/Bitcoin IRA investment. The stock price for Bitcoin has gone crazy over $1,000/share.

I have maximized my Traditional IRA, Roth IRA, and taxable MF account. I am not eligible for 401K due to HCE status.

I am thinking about Bitcoin IRA investment. Should I do it? If so, how?

As always, thank you so much for your advice. You Bogleheads are awesome!
You would be mad to put retirement savings towards something as speculative as bitcoin. Why don't you put it on an outsider at the Kentucky Derby?

And if you lose your money, you lose the opportunity to claim the loss for tax purposes?

chevca
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Re: Bitcoin IRA

Post by chevca » Sun Dec 10, 2017 11:36 am

No doubt... as in, Bitcoin is the only thing you can put your money in for this IRA? That seems like a horrible idea. I'd pass.

And also, yeah, why I'm I not getting these cool emails? :happy

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HomerJ
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Re: Bitcoin IRA

Post by HomerJ » Sun Dec 10, 2017 11:41 am

maxgrowth wrote:
Sun Dec 10, 2017 1:05 am
Lately, I have received a lot of information in my email box in regards to
I think one should ALWAYS invest in whatever shows up in your email box. That's a great way to pick a sure winner.

No, wait, I don't believe that. :oops:

Come on, friend.. You know better.

bogglehead125
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Re: Bitcoin IRA

Post by bogglehead125 » Sun Dec 10, 2017 11:44 am

You saying $1,000/share makes me suspicious you're talking about GBTC, the closed-end fund with an expense ratio of 2% that contains 1/10 of a bitcoin but is not convertible/fungible with BTC and frequently trades at a 50-70% premium to the actual coin. Please don't buy that.

For anyone interested: the 52-week average premium of the fund to NAV was 48.09%. The current premium is 13%.

maxgrowth
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Re: Bitcoin IRA

Post by maxgrowth » Mon Dec 11, 2017 1:41 am

Dear All, you guys convinced me and you are all correct. It is probably the indication of the end of the bitcoin bubble. I am always the last person to know a good deal. :D It is all speculation.

I will be so foolish to make investment in it at this high market.

Happy Holidays, All! :D

WanderingDoc
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Re: Bitcoin IRA

Post by WanderingDoc » Mon Dec 11, 2017 1:45 am

Makes me wonder.. If Bitcoin goes to $20K by end of 2017, 40K by 2018, and $100K by 2020, will people on this board keep saying "too late to the game" "end of the Bitcoin bubble" then? :D
I'm not looking to get rich quick (crypto), I'm not looking to get rich slow (index funds).. I'm looking to get rich, for sure (real estate).

poundwise
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Re: Bitcoin IRA

Post by poundwise » Mon Dec 11, 2017 2:46 am

This thread quickly turned into a replica of the dozens of others about whether Bitcoin is a bubble. While all the caveats and basic lessons about putting money into Bitcoin are appropriate, the OP's title raises a good question: If one does want to want to damn the torpedoes and invest tax-deferred money into bitcoin, what is the best way to do it?

A little Googling suggests one way to do this is to set up a "self-directed IRA." Apparently this allows you to invest in a variety of unusual assets, including Bitcoin (and real estate). Some IRA custodians appear to work directly with the Bitcoin Investment Trust, the vehicle underlying GBTC, making that one route to gain IRA exposure to BTC. Google search results are heavily invested with people trying to sell you something, but this one was informative to me: https://bitcoinmagazine.com/articles/ho ... -not-easy/

I'm not sure what the benefits are of investing IRA money directly into bitcoin versus using a custodian to invest in BIT. GBTC was maligned in this thread because of the costs and the premium to NAV, but people seem to still be doing it. I know a handful of people who used it when BTC was much lower, and now have absurdly large IRAs.

If anyone has experience putting IRA money into bitcoin, that would be great to hear!

Valuethinker
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Re: Bitcoin IRA

Post by Valuethinker » Mon Dec 11, 2017 3:32 am

WanderingDoc wrote:
Mon Dec 11, 2017 1:45 am
Makes me wonder.. If Bitcoin goes to $20K by end of 2017, 40K by 2018, and $100K by 2020, will people on this board keep saying "too late to the game" "end of the Bitcoin bubble" then? :D
In a word.. yes.

ccieemeritus
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Re: Bitcoin IRA

Post by ccieemeritus » Mon Dec 11, 2017 3:38 am

WanderingDoc wrote:
Mon Dec 11, 2017 1:45 am
Makes me wonder.. If Bitcoin goes to $20K by end of 2017, 40K by 2018, and $100K by 2020, will people on this board keep saying "too late to the game" "end of the Bitcoin bubble" then? :D
I’ll continue to say “don’t play the game”. Bitcoin has no underlying earnings. At best that makes it like putting gold in your ira, which is also bad (it costs money to hold gold).

alfaspider
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Re: Bitcoin IRA

Post by alfaspider » Mon Dec 11, 2017 8:43 am

maxgrowth wrote:
Sun Dec 10, 2017 1:05 am
Dear Bogleheads,

Happy Holidays! I wish you and your family a very Merry Christmas and a Prosperous New Year!

Lately, I have received a lot of information in my email box in regards to Bitcoin Stock/Bitcoin IRA investment. The stock price for Bitcoin has gone crazy over $1,000/share.

I have maximized my Traditional IRA, Roth IRA, and taxable MF account. I am not eligible for 401K due to HCE status.

I am thinking about Bitcoin IRA investment. Should I do it? If so, how?

As always, thank you so much for your advice. You Bogleheads are awesome!
There's a pretty much universal rule of investments: If someone is actively selling you an investment, it's probably only a good deal for the seller.

willie838
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Joined: Thu Mar 20, 2014 1:37 am

Re: Bitcoin IRA

Post by willie838 » Mon Dec 11, 2017 8:52 am

WanderingDoc wrote:
Mon Dec 11, 2017 1:45 am
Makes me wonder.. If Bitcoin goes to $20K by end of 2017, 40K by 2018, and $100K by 2020, will people on this board keep saying "too late to the game" "end of the Bitcoin bubble" then? :D
i'll still be sitting here quietly smiling at the 1 bitcoin i snatched up when it was 1k/coin.

:happy

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Watty
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Re: Bitcoin IRA

Post by Watty » Mon Dec 11, 2017 9:16 am

WanderingDoc wrote:
Mon Dec 11, 2017 1:45 am
Makes me wonder.. If Bitcoin goes to $20K by end of 2017, 40K by 2018, and $100K by 2020, will people on this board keep saying "too late to the game" "end of the Bitcoin bubble" then? :D
From my post earlier in the thread.
Watty wrote:
Sun Dec 10, 2017 2:19 am
Unfortunately one of the hallmarks of a bubble is that it can go on longer and higher than people would think possible so it is also hard to predict that it will collapse in the near future.

fatlever
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Re: Bitcoin IRA

Post by fatlever » Mon Dec 11, 2017 9:44 am

WanderingDoc wrote:
Mon Dec 11, 2017 1:45 am
Makes me wonder.. If Bitcoin goes to $20K by end of 2017, 40K by 2018, and $100K by 2020, will people on this board keep saying "too late to the game" "end of the Bitcoin bubble" then? :D

Bogleheads called Bitcoin a bubble at $8, check out the 2011 thread:

viewtopic.php?t=76868

I was going to move all my HSA money (isn't a huge amount) into GBTC early this year but I told myself I wasn't going to take risks with my retirement accounts. Then again I was about to do the same in August when GBTC was ~$400 but told myself the premium was too high. I never thought GBTC would go to what it is with that premium. That just shows how much demand there is for Bitcoin with investors who don't know how to or want to buy Bitcoin directly. If an ETF comes out.....look out.

SEAworld9
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Re: Bitcoin IRA

Post by SEAworld9 » Mon Dec 11, 2017 12:45 pm

i wouldn't hold bitcoin in an IRA, and this is coming from a bitcoin holder. most of the vehicles available charge (relatively) enormous fees vs holding the actual asset.

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HomerJ
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Re: Bitcoin IRA

Post by HomerJ » Mon Dec 11, 2017 5:57 pm

WanderingDoc wrote:
Mon Dec 11, 2017 1:45 am
Makes me wonder.. If Bitcoin goes to $20K by end of 2017, 40K by 2018, and $100K by 2020, will people on this board keep saying "too late to the game" "end of the Bitcoin bubble" then? :D
Don't confuse result with strategy.

It is absolutely correct for me to NOT let a sizable bet ride on red at a roulette table 6 times in a row. Just because red comes up 6 times in a row doesn't change that merit of that decision.

It is always a bad idea to let a sizable bet ride on red multiple times in a row, regardless of outcome.

Boring Indexer
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Re: Bitcoin IRA

Post by Boring Indexer » Mon Dec 11, 2017 6:13 pm

If you don't understand Bitcoin well enough to explain it to another human being, you should not invest in it. If you do understand it that well, you wouldn't need to ask strangers how to invest in it.

hightower
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Re: Bitcoin IRA

Post by hightower » Mon Dec 11, 2017 6:48 pm

WanderingDoc wrote:
Mon Dec 11, 2017 1:45 am
Makes me wonder.. If Bitcoin goes to $20K by end of 2017, 40K by 2018, and $100K by 2020, will people on this board keep saying "too late to the game" "end of the Bitcoin bubble" then? :D
I will feel no remorse if I "miss out" on bitcoin prices continuing to skyrocket. Unless all these people holding bitcoin cash out, they haven't made a dime off of it. And if they do all cash out, the price will come crashing down. It's a classic bubble and it's only a matter of time before it bursts and people buying in at these insane prices are going to lose money. There will certainly be some people who get rich from it and I say great for them. But, I'm not interested in putting my hard earned cash in such a risky place.

http://www.etf.com/sections/index-inves ... nopaging=1

WanderingDoc
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Re: Bitcoin IRA

Post by WanderingDoc » Mon Dec 11, 2017 6:53 pm

hightower wrote:
Mon Dec 11, 2017 6:48 pm
WanderingDoc wrote:
Mon Dec 11, 2017 1:45 am
Makes me wonder.. If Bitcoin goes to $20K by end of 2017, 40K by 2018, and $100K by 2020, will people on this board keep saying "too late to the game" "end of the Bitcoin bubble" then? :D
I will feel no remorse if I "miss out" on bitcoin prices continuing to skyrocket. Unless all these people holding bitcoin cash out, they haven't made a dime off of it. And if they do all cash out, the price will come crashing down. It's a classic bubble and it's only a matter of time before it bursts and people buying in at these insane prices are going to lose money. There will certainly be some people who get rich from it and I say great for them. But, I'm not interested in putting my hard earned cash in such a risky place.
It actually doesn't seem that risky. I put a few K in Bitcoin, and have already made my investment back in 2 weeks. Cash-ola in hand. I am looking to capitalize on the naivety of the hoards of dumb people and a cult-like following that you see on the main Bitcoin forum. Its not that I am bullish on Bitcoin - I am bullish on people's greed and certainty that they will do dumb things.

I have already 2X'd my positions on Bitcoin and Litecoin. This is only the beginning. I am looking at a $50-100K Bitcoin by end of 2018.
I'm not looking to get rich quick (crypto), I'm not looking to get rich slow (index funds).. I'm looking to get rich, for sure (real estate).

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HomerJ
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Re: Bitcoin IRA

Post by HomerJ » Mon Dec 11, 2017 6:55 pm

hightower wrote:
Mon Dec 11, 2017 6:48 pm
And if they do all cash out, the price will come crashing down. It's a classic bubble
This. It's important to recognize that not EVERYONE can possibly get rich off bitcoin. Many people will indeed lose money. Anyone investing a huge chunk of their net worth in bitcoin is taking a big risk.

Now it could pay off (for some, not all people). But that still doesn't mean taking a big risk is a good idea.

hightower
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Re: Bitcoin IRA

Post by hightower » Mon Dec 11, 2017 7:05 pm

WanderingDoc wrote:
Mon Dec 11, 2017 6:53 pm
hightower wrote:
Mon Dec 11, 2017 6:48 pm
WanderingDoc wrote:
Mon Dec 11, 2017 1:45 am
Makes me wonder.. If Bitcoin goes to $20K by end of 2017, 40K by 2018, and $100K by 2020, will people on this board keep saying "too late to the game" "end of the Bitcoin bubble" then? :D
I will feel no remorse if I "miss out" on bitcoin prices continuing to skyrocket. Unless all these people holding bitcoin cash out, they haven't made a dime off of it. And if they do all cash out, the price will come crashing down. It's a classic bubble and it's only a matter of time before it bursts and people buying in at these insane prices are going to lose money. There will certainly be some people who get rich from it and I say great for them. But, I'm not interested in putting my hard earned cash in such a risky place.
It actually doesn't seem that risky. I put a few K in Bitcoin, and have already made my investment back in 2 weeks. Cash-ola in hand. I am looking to capitalize on the naivety of the hoards of dumb people and a cult-like following that you see on the main Bitcoin forum. Its not that I am bullish on Bitcoin - I am bullish on people's greed and certainty that they will do dumb things.

I have already 2X'd my positions on Bitcoin and Litecoin. This is only the beginning. I am looking at a $50-100K Bitcoin by end of 2018.
I don't blame you for that one bit. If I were going to get into I'd do the same as you, try to capitalize on people's excitement and make a quick buck. However, I'm not willing to risk any more than maybe $500 on something like this. Therefore it's not really worth it to me...it would just add a bunch of extra complexity to my taxes that I don't feel like dealing with all for a few hundred bucks profit (after taxes).

hightower
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Re: Bitcoin IRA

Post by hightower » Mon Dec 11, 2017 7:25 pm

HomerJ wrote:
Mon Dec 11, 2017 6:55 pm
hightower wrote:
Mon Dec 11, 2017 6:48 pm
And if they do all cash out, the price will come crashing down. It's a classic bubble
This. It's important to recognize that not EVERYONE can possibly get rich off bitcoin. Many people will indeed lose money. Anyone investing a huge chunk of their net worth in bitcoin is taking a big risk.

Now it could pay off (for some, not all people). But that still doesn't mean taking a big risk is a good idea.
Not only this, but it doesn't even make sense to use it as currency. It's way too volatile and therefore impossible to assign physical value to it when trying to trade it for goods or services. Its value skyrockets and then plummets hour by hour so you wouldn't know what to charge or pay for something. For instance, if I wanted to sell my car in bitcoins, what price would I put on the 'for sale' sign? It's worth $36k USD. Would I write 2 bitcoins? 3 bitcoins? I wouldn't be able to decide because every time I check the value of a bitcoin it's wildly different. So people are basically buying a digital "thing" and not able to do anything with it other than cash it out for dollars or buy more.
The price would have to stabilize first and stay stable for a long time in order for it to be useful as currency (just like the dollar). If the price stops going up for any significant amount of time, guess what's going to happen? Everyone is going to spook and try to cash out. Then the price will plummet and crash.
I think it's fine for people to throw some play money at it now in an effort to cash in on all the insanity, but I wouldn't do anything more than that. It's like going to a casino IMO.

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queso
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Re: Bitcoin IRA

Post by queso » Mon Dec 11, 2017 8:49 pm

WanderingDoc wrote:
Mon Dec 11, 2017 6:53 pm
hightower wrote:
Mon Dec 11, 2017 6:48 pm
WanderingDoc wrote:
Mon Dec 11, 2017 1:45 am
Makes me wonder.. If Bitcoin goes to $20K by end of 2017, 40K by 2018, and $100K by 2020, will people on this board keep saying "too late to the game" "end of the Bitcoin bubble" then? :D
I will feel no remorse if I "miss out" on bitcoin prices continuing to skyrocket. Unless all these people holding bitcoin cash out, they haven't made a dime off of it. And if they do all cash out, the price will come crashing down. It's a classic bubble and it's only a matter of time before it bursts and people buying in at these insane prices are going to lose money. There will certainly be some people who get rich from it and I say great for them. But, I'm not interested in putting my hard earned cash in such a risky place.
It actually doesn't seem that risky. I put a few K in Bitcoin, and have already made my investment back in 2 weeks. Cash-ola in hand. I am looking to capitalize on the naivety of the hoards of dumb people and a cult-like following that you see on the main Bitcoin forum. Its not that I am bullish on Bitcoin - I am bullish on people's greed and certainty that they will do dumb things.

I have already 2X'd my positions on Bitcoin and Litecoin. This is only the beginning. I am looking at a $50-100K Bitcoin by end of 2018.
Are they still talking about Bitcoin? That's so last week. We're on to Litecoin now folks! I thought I was pretty slick cashing out my original BTC holding last week, but figured I'd let my LTC and ETH ride. Boy, did LTC ever take off! If this wasn't just a ridiculous FOMO fueled bubble I'd almost look like I am a cryptocurrency genius that possesses rare clairvoyance about when to sell and when to hodl. Shoot, if I had a YouTube channel I could make a few million there pontificating about cryptocurrency strategy and how it is just as valid of an investment holding as stocks and bonds and how it should make up a legitimate piece of your AA. However, it is a FOMO fueled bubble and I am definitely not a genius. Just some lucky index guy that decided to fool around with fake internet money. Now, off to see if I can pick up one of those cryptokitties (fake internet cats - kinda like the fake internet money, but cuter). With any luck I should be able to turn that around in a week or two and buy that Volvo I've had my eye on. :happy

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