Bitcoin IRA

[TravisRADMD]

https://itrustcapital.com/cms/backdoor-roth-ira/

Considering doing a back door into Roth bitcoin IRA? $6000 is less than 10% portfolio contributions per year. Seems like a small amount to roll the dice on. If bitcoin goes exponential over the next 25 years then that would be an incredible tax savings.

Thoughts? This company seems to have a fair fee schedule compared to the others. $29/month custodial fee + 1% per trade fee.

[CordMcNally]

I'm not a believer in Bitcoin so I guess it depends on if you're a believer in Bitcoin or not.

[TravisRADMD]

I'm not a believer in Bitcoin so I guess it depends on if you're a believer in Bitcoin or not.

There's too much capital in bitcoin for belief to have anything to do with it anymore. It's a pretty legitimate asset as this point and the global narrative for its continued adoption and development has never been stronger. Are you saying it's too risky of an asset?

[CordMcNally]

There's too much capital in bitcoin for belief to have anything to do with it anymore. It's a pretty legitimate asset as this point and the global narrative for its continued adoption and development has never been stronger. Are you saying it's too risky of an asset?

Agree to disagree. It has no intrinsic value. None. There's nothing too risky if it's money you're ok with losing and it is a very small minority of your portfolio.

[TravisRADMD]

Agree to disagree. It has no intrinsic value. None. There's nothing too risky if it's money you're ok with losing and it is a very small minority of your portfolio.

I mean it depends on how you define value. Gold derives its values from different ways. It current rise as a hedge to inflation and low interest rates has nothing to do with its "intrinsic value" as a metal.

[CordMcNally]

I mean it depends on how you define value. Gold derives its values from different ways. It current rise as a hedge to inflation and low interest rates has nothing to do with its "intrinsic value" as a metal.

It doesn't matter how I determine value. People and society determines value and over the course of history they have determined that gold is valuable. Paper money is just paper, however, it holds a lot of value. Could that change with Bitcoin? Absolutely. One of my biggest issues with Bitcoin is that I have yet to meet anyone in person or on the internet that can easily explain it.

[xraygoggles]

https://itrustcapital.com/cms/backdoor-roth-ira/

Considering doing a back door into Roth bitcoin IRA? $6000 is less than 10% portfolio contributions per year. Seems like a small amount to roll the dice on. If bitcoin goes exponential over the next 25 years then that would be an incredible tax savings.

Thoughts? This company seems to have a fair fee schedule compared to the others. $29/month custodial fee + 1% per trade fee.

You're thinking wisely in the sense that you want very high risk, high reward assets in Roth since they will never be taxed.

I buy stocks, and call options (leaps) in Roth. However, bitcoin is super speculative, even for a Roth. You don't want to waste that precious space for crypto. Unless your Roth is "big" (6 figures+), I would stick to equities or call options. Or maybe put 25% of Roth contributions in crypto I suppose, if you are really bullish.

[Tim]

https://youtu.be/wTP2RUD_cL0

[TravisRADMD]

You're thinking wisely in the sense that you want very high risk, high reward assets in Roth since they will never be taxed.

I buy stocks, and call options (leaps) in Roth. However, bitcoin is super speculative, even for a Roth. You don't want to waste that precious space for crypto. Unless your Roth is "big" (6 figures+), I would stick to equities or call options. Or maybe put 25% of Roth contributions in crypto I suppose, if you are really bullish.

I totally agree that the asset being a completely speculative play might turn the Roth into garbage can. No income or dividend to protect unfortunately with BTC but look at whats going on. Aside from its fundamental applications it seems like every day another global hedge fund or public corporation is adding bitcoin positions to hedge their massive portfolios. BTC market cap is ~200 billion. Gold is ~9 trillion. 45X? My point is not to defend bitcoin but to ask in general wether holding a risky non-income generating nascent asset with enormous untapped applications, momentum and tiny relative market cap is worth(the risk) it in a Roth. I'm really on the fence all things said.

It would only be 5-6% of my overall investment savings rate(~30% total) which I think is is a good position for any high risk alternative asset. It's just like you said I'm not counting lost tax and opportunity cost of a less volatile tax inefficient asset like a REIT. Which is actually my current plan. I'm a new attending and I just maxed out my 2020 backdoor and HSA with Vanguard REIT funds.

I'm fantasying of not paying taxes on some exuberant amount of gains if BTC continues to find it's way into the traditional investor's portfolio over the next 30 years.

[Peds]

https://itrustcapital.com/cms/backdoor-roth-ira/

Considering doing a back door into Roth bitcoin IRA? $6000 is less than 10% portfolio contributions per year. Seems like a small amount to roll the dice on. If bitcoin goes exponential over the next 25 years then that would be an incredible tax savings.

Thoughts? This company seems to have a fair fee schedule compared to the others. $29/month custodial fee + 1% per trade fee.

you would pay a 5% ER, plus transaction fee because you have FOMO?
pass.

[TravisRADMD]

you would pay a 5% ER, plus transaction fee because you have FOMO?
pass.

Yea, the fees are monstrous and that was probably the fairest structure I came across.

[Dont_know_mind]

You're thinking wisely in the sense that you want very high risk, high reward assets in Roth since they will never be taxed.

I buy stocks, and call options (leaps) in Roth. However, bitcoin is super speculative, even for a Roth. You don't want to waste that precious space for crypto. Unless your Roth is "big" (6 figures+), I would stick to equities or call options. Or maybe put 25% of Roth contributions in crypto I suppose, if you are really bullish.

I disagree.
I want something that is low risk, high reward in Roth space.
Basically my best investment.
Something that has a 90% chance of appreciating over 300% in a 10 year period and less than 5% chance of depreciating over this period. The venture capitalists take this to the extreme with carried interest.

You may not be able to use carry forward losses in Roth as you cannot easily replenish Roth space.

So I want assets with very asymmetric risk.
Unfortunately no one knows the actual probability distribution of returns pre-flop. You don’t know what your best investment will be so you can’t be guided by just the potential or expected return, but also need to estimate the risk and probability and quantity of loss.

If I did buy high risk, high reward stuff (which I don’t), I would do it in taxable space because at least I could use the capital losses if it doesn’t pan out.

[Dont_know_mind]

https://youtu.be/NBVDqAHQ4-M

[jacoavlu]

whether or not this is a dumb idea

couldn't you just do this with any "checkbook IRA" ? It shouldn't have to be some bitcoin specific account unless you want to pay extra fees

[xraygoggles]

I disagree.
I want something that is low risk, high reward in Roth space.
Basically my best investment.
Something that has a 90% chance of appreciating over 300% in a 10 year period and less than 5% chance of depreciating over this period. The venture capitalists take this to the extreme with carried interest.

Not really sure I understand what this means. No such thing as low risk, high reward. Maybe you mean risk-adjusted returns?

Perhaps give an example, so I get what you are referring to.