{"id":326689,"date":"2021-08-17T22:38:00","date_gmt":"2021-08-17T19:38:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/does-bitcoin-belong-with-your-401k\/"},"modified":"2021-08-17T22:38:00","modified_gmt":"2021-08-17T19:38:00","slug":"does-bitcoin-belong-with-your-401k","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/does-bitcoin-belong-with-your-401k\/","title":{"rendered":"#: Does bitcoin belong with your 401(k)?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a24d4ed6dbc8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a24d4ed6dbc8\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/does-bitcoin-belong-with-your-401k\/#7_cryptocurrency_questions_%E2%80%94_and_answers_%E2%80%94_for_your_retirement_plans\" >7 cryptocurrency questions \u2014 and answers \u2014 for your retirement plans<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/does-bitcoin-belong-with-your-401k\/#Alessandra_Malito\" >Alessandra Malito<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#: Does bitcoin belong with your 401(k)?<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"7_cryptocurrency_questions_%E2%80%94_and_answers_%E2%80%94_for_your_retirement_plans\"><\/span>\n  7 cryptocurrency questions \u2014 and answers \u2014 for your retirement plans<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000377648\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000377648\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Does cryptocurrency belong in a retirement investment account? Should investors trade it in the short-term or buy and hold? How much money is too much to allocate to bitcoin or ethereum?\u00a0<\/p>\n<p> Cryptocurrencies are becoming an increasingly popular option in alternative investments, leaving many Americans wondering when \u2014 if ever \u2014 they should include this rising asset class in their retirement savings strategies. The answer is: it depends. Retirement planning must incorporate a wide variety of factors, including amount saved, life expectancy, income needs, and risk tolerance.\u00a0<\/p>\n<div class=\"paywall\">\n       Still, a little risk in a retirement portfolio is to be expected, especially when the time horizon spans decades. In a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bigmarker.com\/barrons-events\/Aug-11-MarketWatch-How-to-Build-a-Retirement-Portfolio-and-How-Not-II\" class=\"icon none\">Barron\u2019s Live event<\/a> on Aug. 11, MarketWatch reporters Alessandra Malito and Brett Arends spoke about if, when and how to include cryptocurrencies in retirement plans, and what to expect in the future.\u00a0<\/p>\n<p>To watch the full episode of this Barron\u2019s Live session, click <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bigmarker.com\/barrons-events\/Aug-11-MarketWatch-How-to-Build-a-Retirement-Portfolio-and-How-Not-II\" class=\"icon none\">here<\/a>. The session sparked dozens of questions from audience members about cryptocurrencies, including the ones below. Here\u2019s what some Bitcoin-focused experts said.\u00a0<\/p>\n<p><strong>See:<\/strong> Why the only place you should invest in bitcoin is in your IRA<\/p>\n<p><strong>What amount of your retirement savings should be allocated to cryptocurrency?<\/strong><\/p>\n<p>Whether or not there should be cryptocurrencies in a retirement portfolio depends heavily on the individual\u2019s goals, time horizons, risk tolerance and assets, but it is one way to diversify investments. As an alternative, cryptocurrencies may be best as a small percentage of a portfolio. Below 1% is \u201ctoo small to matter much\u201d and above 5% substantially increases risk, so \u201c1 to 5% is a sweet spot,\u201d said Matt Hougan, chief investment officer of Bitwise Asset Management. \u201cBut everyone should make their own decision.\u201d\u00a0<\/p>\n<p>One adviser explained alternatives in retirement portfolios as \u201cthe icing on the cake, not the cake itself.\u201d\u00a0<\/p>\n<p>There are, of course, other investors who feel strongly about investing in cryptocurrencies in their retirement portfolios. Some client portfolios have between 5% to 25% of their accounts allocated to cryptocurrencies, said Chris Kline, chief operations officer of bitcoin IRA, a platform for investing in digital assets. Many of these investors prefer the tax advantages to investing in cryptocurrencies in an individual retirement account.\u00a0<\/p>\n<p>Here\u2019s <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.investopedia.com\/tech\/pros-and-cons-investing-bitcoin-iras\/\" class=\"icon none\">more information<\/a> on the pros and cons of investing in cryptocurrencies through a self-directed IRA.\u00a0<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p><strong>What are the compelling reasons to invest in it for retirement? And what are the compelling reasons not to?\u00a0<\/strong><\/p>\n<p>There are two reasons to invest in cryptocurrencies for retirement, Hougan said. First, it has historically high returns over the last year, three years, five years and 10 years, but it is also not correlated to traditional stocks and bonds. \u201cAdding noncorrelated assets can help with risk-adjusted returns,\u201d Hougan said.\u00a0<\/p>\n<p>It\u2019s also a \u201conce in a generation disruptive <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> that will have a big impact on the world,\u201d Hougan added.\u00a0<\/p>\n<p>There are also potential tax advantages to investing in cryptocurrencies in a retirement account. These investments are taxed at capital-gains rates. If using a Roth IRA, investors pay taxes on their contributions up front and can then benefit from tax-free withdrawals at distribution, assuming they follow the rules accordingly.\u00a0<\/p>\n<p>But there are reasons not to include it in a retirement portfolio as well, aside from personal circumstances. \u201cThe biggest risk in cryptocurrency investing is behavioral risk,\u201d Hougan said. The investment may be doing extremely well and hit a peak one month, but drop 50% and send investors into a panic to sell. \u201cYou have to have a long time horizon to hold an asset through periods of volatility.\u201d\u00a0<\/p>\n<p><strong>We heard how much of a retirement portfolio should be allocated to cryptocurrencies, but what percentage of an individual\u2019s net worth should be allocated to this asset? And how would you subdivide that within bitcoin, ethereum and other alternative coins?<\/strong><\/p>\n<p>The suggestion to allocate a small percentage of a portfolio in alternatives like cryptocurrencies <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lies to retirement savings as well as <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> net worth, but when looking at net worth, it\u2019s critical to focus on liquid assets. Net worth can include the value of one\u2019s home, but when choosing how much to allocate to these investments, stick to just the money available to invest.\u00a0<\/p>\n<p>\u201cIn terms of how to allocate, I think the right approach is one of humility,\u201d Hougan said. Technology evolves quickly \u2014 in just the span of 30 years, Americans have gone from not having internet in their households to being constantly connected to the web on their smartphones.\u00a0<\/p>\n<p>\u201cIt is hard to know how technology will develop, what the applications that matter will be and therefore where to invest,\u201d Hougan said. When choosing how to spread out investments in cryptocurrencies, it might be best to stay broad and diversify as you would any asset class, and then underweight or overweight a particular type of crypto if you feel strongly about it.\u00a0<\/p>\n<p><strong>Don\u2019t miss:<\/strong> 4 mistakes too many new cryptocurrency investors make\u00a0<\/p>\n<p><strong>Will the government regulate cryptocurrencies?\u00a0<\/strong><\/p>\n<p>It is hard to tell when or how the U.S. government will take a closer look at regulating cryptocurrencies, but it is inevitable, Hougan said. That could be a good thing for the asset though, as it will push it into the mainstream for all investors to use more willingly, he said. \u201cOn the one hand, these regulations are cracking down on that and on the other side, they are creating a safe harbor and clear rules that unlock the potential to improve the ecosystem,\u201d he said.\u00a0<\/p>\n<p><strong>Also see:<\/strong> What bitcoin\u2019s collapse could mean for your retirement\u00a0<\/p>\n<p><strong>Should you trade cryptocurrency or buy and hold it?<\/strong><\/p>\n<p>\u201cTrading any asset is difficult and one as volatile as cryptocurrency is that difficulty squared,\u201d Hougan said. \u201cSo if it\u2019s binary between trading and holding, you should hold it.\u201d\u00a0<\/p>\n<p>That being said, it is very unlikely someone will hold on to an asset as volatile as certain cryptocurrencies for the long haul without making some changes to the portfolio or allocation. Just like with any other asset, these should be checked on at regular intervals and rebalanced when necessary. Portfolio allocations naturally move with price fluctuations of stocks and bonds, and without rebalancing, its trajectory toward specific goals can get off course.\u00a0<\/p>\n<p>\u201cCrypto is becoming an institutional asset,\u201d Hougan said. \u201cTreat it like that.\u201d\u00a0<\/p>\n<p>There are some investors who are choosing the set-it-and-forget-it approach, Kline said. \u201cTrading can be done with anything but not something we see a lot of on our platform.\u201d\u00a0<\/p>\n<p><strong>How do you decide when to get out of these types of investments?\u00a0<\/strong><\/p>\n<p>Hougan suggests having a \u201ccore thesis\u201d when investing in this type of asset, such as how you think it will react in the market, and then altering your investment stance as you receive more information and <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> on it. There may be times when bad news strikes, causing the investment to plummet for a few days, but did it recover rapidly? What happened to the other assets in your portfolio during that time? \u201cI would say not to react to the short-term,\u201d he said.\u00a0<\/p>\n<p><strong>What do you see for the future of cryptocurrency?<\/strong><\/p>\n<p>\u201cOver the next five years, I think crypto will be a normal allocation in many investors\u2019 portfolios,\u201d Hougan said. \u201cIt will be increasingly regulated and adopted in the mainstream and an underpinning of how money moves in the world.\u201d\u00a0<\/p>\n<p>There have been plenty of experiments within this market that have collapsed, but it has developed significantly over the last decade, so much so that politicians and Wall Street banks are debating its future. \u201cThe crypto market of today is not the same crypto of the past,\u201d he said.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Alessandra Malito\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/topics\/journalists\/alessandra-malito\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/malito_ali\",\"text\":\"@malito_ali\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:amalito@marketwatch.com\",\"text\":\"amalito@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Alessandra_Malito\"><\/span>Alessandra Malito<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-75C3-30E01589F442%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#: Does bitcoin belong with your 401(k)?&#8221; 7 cryptocurrency questions \u2014 and answers \u2014 for your retirement plans Does cryptocurrency belong in a retirement investment account? Should investors trade it in the short-term or buy and hold? How much money is too much to allocate to bitcoin or ethereum?\u00a0 Cryptocurrencies are becoming an increasingly popular&#8230;<\/p>\n","protected":false},"author":1,"featured_media":326690,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-326689","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/326689","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=326689"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/326689\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/326690"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=326689"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=326689"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=326689"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}