Bitcoin not good for your 401(k) plans, ex-Biden advisor warns – Quartz

Interest in ‘how to add bitcoin to your retirement account’ has grown since Boston-based retirement plan provider Fidelity announced last month that it will allow investing bitcoin in 401(k) accounts for 23,000 companies.

Fidelity said it will give its 20 million participants, corresponding to $2.7 trillion in assets, an opportunity to invest in bitcoin this year through their 401(k) retirement accounts.

is it practical? If yes, is this a good idea? Cryptocurrencies are known to be the most volatile digital assets, and pinning all your retirement benefits to them requires an in-depth understanding of the enormous changing trends in the global crypto market. In the past month alone, $800 billion worth of valuations have been wiped out in a recent crypto crash.

In the last few years, the crypto investment spree has been completely against the original principles of cryptocurrency blockchain systems such as decentralization and immutability. Most bitcoins are still held by “whales” (someone who owns a large amount of bitcoins) and institutional investors.

Mainstream crypto has promised to ‘democratize’ a lot of things, but in reality, the 82 wealthiest individual crypto wallet holders account for almost 15% of the total bitcoin supply, according to River Financial, a San Francisco-based financial services firm.

Anonymity in the crypto world makes it risky

Due to the supposed anonymity of players in the crypto world, it has a high potential for fraud, carpet pulling and other types of dishonest tactics. This means that if you choose to give your funds to an individual retirement account (IRA) provider, you will need to properly review them first.

Quartz spoke with Moises ‘Moe’ Vella, a senior adviser to former President Joe Biden, who serves on the Board of TransparentBusiness, which launched the cryptocurrency Unicoin. He talks about the current crypto crash, crypto retirement plans and the future of finance.

What can you do it current crypto crash?

This was inevitable given that traditional cryptocurrencies are not backed by any entity. Need to think about creating crypto addressing the high volatility of digital currencies. Cryptocurrencies backed by no assets have only perceived value, and even a single tweet from influencers like Elon Musk can drastically affect their valuation.

WhHow about using bitcoin for retirement plans?

Retirement plans should focus on more stable investments. Few retirees are willing to rely on non-asset currencies that could lose all of their value. Equity-backed, dividend-paying cryptocurrencies are safer options. A change is needed for crypto to become safe for retirement investments. It will be based on a broad portfolio of growing assets, such as equity in emerging growth companies. Unicoin is restoring the “gold standard” by using equity as the superior asset type in emerging growth companies: a good equity portfolio grows while gold does not.

Stablecoins provide questionable stability. They do not provide an opportunity for return on investment as their value will not increase above the US dollar.

What Can you tell us about its stability? fixed moneys?

As we’ve all discovered in the current market crash, stablecoins provide questionable stability. And they do not provide a return on investment, as their value will not increase over the US dollar or other fiat currencies to which they are tied. The combination of these two factors makes them a very dubious investment option.

countries like El Salvador and most Central AAfrican Republic he is using now bas bitcoinir Official currency. your thoughts?

I see this as an irreversible trend. Cryptocurrencies will compete successfully with fiat currencies and governments will need to recognize and regulate them. Decentralized finance is part of the future of finance. Decentralization has advantages and disadvantages. For example, decentralized cryptocurrencies cannot do significant branding because not everyone on the blockchain can see all the nodes and therefore difficult to scale. But the downsides of transparency remain.

Leave a Comment

Your email address will not be published.