Cryptocurrency: Rocket Fuel for Your Retirement Fund?

The risks and the gains of Bitcoin are becoming increasingly well-known as this previously under-the-radar cryptocurrency hits the mainstream, with everywhere from specialized exchanges down to your local pizza place now trading in it. But if income tax is making a hole in your retirement funds, then this unregulated, untaxed market – even with all its attendant risks – may begin to look attractive.  Earning Bitcoin is becoming more of an option for growing your overall portfolio, not something to go all-in with. But what are the best ways to make it pay? Here are some of the easiest:

CryptoCurrency: Rocket Fuel for Your Retirement Fund?

Join a mining pool

 

Traditionally, the way to earn with Bitcoin was through ‘mining’ – solving sophisticated mathematical algorithms to create new ledger blocks. However, those days are probably over now. You will need to invest in a Bitcoin mining pool to get access these days, as the current algorithms are too complex to be processed on a home PC and require specialist hardware that harnesses the processing power of many computers. A Bitcoin mining calculator can help you work out how profitable this might be.

 

Create a faucet

 

Bitcoin ‘faucets’ are basically websites that give away micro amounts of the currency to their users, and earn revenue through hosting advertising. The business model is referral-based, generating high-volume traffic to create more ad clicks. This can be done ‘out of the box’ with no experience in coding needed, just a domain name and website creator, plus a micro wallet payment processor service like FaucetHub. Once built, monetize the site through a provider like Google Adwords or spend time building affiliate revenue streams, where you make a small percentage of commission on referrals.

 

Invest in funds

 

It’s now possible to invest in funds that themselves invest in bitcoin. Values are increasing and have been known to double in a matter of months. So although there are definite risks, there are also significant gains to be made by doing this. With a finite supply and tightly regulated production, in theory, Bitcoin should always gain in value over time. There are other cryptocurrencies backed by global conglomerates to invest in such as Ethereum  and you can even set up an ethereum IRA online.

 

Become a Bitcoin lender

 

Becoming a lender is another way to get a slice of the Bitcoin action. Buy up some currency from an exchange, and then lend to another party with interest.  Lend either with no collateral and higher returns or secured against something for a lower interest rate. However, this should be approached with caution due to the lack of market regulation. Cryptocurrency is not part of any insurance scheme or regulated by any official bodies.

 

Accept payments in Bitcoin

 

The other channel is to add Bitcoin to accepted payment methods for whatever goods or services you can sell. But obviously, this depends on being able to effectively market whatever you need to in order to create the wealth. Bitcoin has brought with it some new entrepreneurial opportunities as it removes a lot of the barriers to conducting global business by virtue of its totally digital format.

 

Although its newness makes it a fairly high-risk option, Bitcoin is becoming increasingly mainstream. For a savvy investor, meaning knowing when to get in and get out, there may be opportunities there to make swift gains.

Can cryptocurrency be rocket fuel for your retirement fund? I still have a lot of research to do before I can honestly answer that. But with knowledge comes opportunity and understanding whether something is too risky to invest in.


Save pagePDF pageEmail pagePrint page

4 thoughts on “Cryptocurrency: Rocket Fuel for Your Retirement Fund?

  1. “Values are increasing and have been known to double in a matter of months…there are also significant gains to be made by doing this…in theory, Bitcoin should always gain in value over time. ”

    RUN AWAY! These are all huge signs. Huge, huge signs. Any investment that relies on the value of bitcoin is super duper risky. Anything that shoots up in value astronomically typically falls into this category, and anything known to double in a matter of months could just as easily (and is likely to) drop in half in even less time. I’ll be eager to see the bitcoin value chart in 5 years, or even 5 months. It’s like gold and silver – it’s a non-productive asset. Except it’s one that is at an astronomical all-time high. Owning something like Facebook or real estate can at least someday generate the profits that a high price today might demand. Again, I’ll be very eager to see what the future holds!

    1. Thanks for the comment Ron. The whole thing is such a new concept that it really tweaked my curiosity. I could see right away that it carries high risks and from what I have seen much more than I am willing to enter into. It’s one of many new disruption inventions that challenges the status quo and will either catch on or crash and burn. For me it would be no more than gambling just like a lot of other things. If nothing else I had hoped this post would introduce cryptocurrancy to folks who have never seen much about it and receive informative comments of strategy or warnings/cautions. I appreciate your assessment.
      Tommy

  2. Thank you very much, it was really informative specially “The other channel is to add Bitcoin to accepted payment methods for whatever goods or services you can sell. But obviously, this depends on being able to effectively market whatever you need to in order to create the wealth.”

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge