As the digital landscape continues to evolve, so does the accepted wisdom regarding cryptocurrencies, particularly bitcoin.
Despite their increasing popularity, many misconceptions have grown up around cryptocurrencies and continue to persist. These crypto myths can discourage even the investment-savvy from exploring this revolutionary asset class.
Here at BitIRA, our primary goal is to empower everyday Americans with the knowledge they need to make smart decisions for their own financial futures. Don’t get me wrong – I’d love for you to open your digital IRA today!
More important, though: Delivering the facts you need to make the decisions that are right for you.
Armed with knowledge, you’ll be equipped to make crucial decisions about your own financial future. And that’s just not something anyone else can do for you.
Having said all that, let’s take a moment to debunk some of the most common myths surrounding bitcoin and other cryptocurrencies.
Myth #1: Cryptocurrencies are only for the tech-savvy
One of the biggest misconceptions is that cryptocurrencies are reserved for the technologically adept.
That hasn’t been true for years. Sure, if you wanted to buy bitcoin back in 2011, a computer science degree was pretty much a requirement…
These days, you don’t need to be a software engineer to explore cryptocurrencies. Today’s platforms, especially BitIRA, offer user-friendly interfaces and comprehensive customer support to guide you through every step of the process. We strive to make cryptocurrency investments accessible to anyone looking to diversify their retirement savings.
If you can use email, the world of cryptocurrencies is open to you.
Myth #2: Cryptocurrencies are a passing fad
Skeptics often label cryptocurrencies as a passing trend, one that’s time is almost up. (They’ve been saying that for over a decade now.)
And, to be fair, this is not uncommon. It’s very difficult for even quite smart people to predict the future. Like when Nobel Prize-winning Paul Krugman wrote in 1998:
By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.
In reality, the bitcoin ecosystem has demonstrated remarkable resilience and growth since its inception in 2009. Ethereum has come a long way since its 2015 debut – for that matter, all decentralized finance including institutions like Aave and Solana, has been a hotbed of growth and innovation.
Major financial institutions and corporations have begun to transact and invest in cryptocurrencies, signaling their legitimacy and potential for long-term growth. As more people recognize the benefits of digital assets, such as diversification and inflation hedging, it’s become quite obvious that cryptocurrencies are here to stay.
Myth #3: Crypto is primarily a tool for financing criminal activities
Another prevalent myth is that bitcoin specifically and cryptocurrencies generally are primarily used for illicit activities.
Nonsense. This myth dates from the early teens, when the dark web’s Silk Road was all over the news for offering illegal drugs, weapons and stolen credit cards for sale in exchange for bitcoin.
Cryptocurrencies are sometimes used as a payment method in financial scams, too – though not as often as Target gift cards. We don’t blame Target for that!
According to a recent report by Chainalysis, only a tiny fraction of bitcoin transactions are linked to illegal activities. The majority of users engage in legitimate transactions: Investing, paying for goods or services, transferring money to friends and family – even charitable donations.
The “criminal activities” myth hasn’t been true for over a decade.
Myth 4: Cryptocurrencies are too volatile
Cryptocurrency volatility is often cited as a reason not to invest.
While it’s undeniable that digital currencies experience significant price swings, it’s essential to understand that this volatility works both ways. Significant price swings offer huge upside benefits, especially for the long-term investor.
You know what else is volatile? Venture capital investing. Know why people still do it? Because the risk/reward profile is so compelling.
Historically, bitcoin has outperformed virtually every traditional asset over the long term. And over the last few years.
Now, the phrase “Cryptocurrencies are too volatile for me” might indeed be true! That’s where the diversification element comes into play – a 100% cryptocurrency allocation is probably not suitable for anyone, while a much smaller allocation might be great for everyone.
Myth #5: You can’t buy cryptocurrency with your retirement savings
Many people believe that investing in cryptocurrencies with retirement funds isn’t allowed.
This myth can deter even crypto-curious investors from considering crypto as part of their long-term savings strategy.
In fact, ten years ago the IRS issued Notice 2014-21 which established that:
…digital currencies are treated as personal property for taxation purposes, thus making them legally eligible to be owned within a Self-Directed IRA.
The truth is that there are now services like BitIRA that allow you to include cryptocurrencies in your Individual Retirement Account (IRA). A digital IRA, you can enjoy the tax advantages of retirement accounts while diversifying your portfolio with digital assets.
It’s the best of both worlds!
Myth #6: All cryptocurrencies are pretty much the same thing
With thousands of cryptocurrencies available today, it can be tempting to lump them all together.
However, each cryptocurrency has unique features, specific use cases and potential weaknesses. Bitcoin remains the most recognized and widely adopted cryptocurrency, but a number of others – like Ethereum’s either or Litecoin – serve different purposes within the blockchain ecosystem.
At BitIRA, we’re proud to offer a manageable subset of 18 cryptocurrencies – along with digital asset specialists to help you make informed decisions about which digital assets align with your investment goals.
Educate yourself and explore new opportunities
Understanding these myths about bitcoin and cryptocurrencies is essential for anyone considering diversification with this dynamic asset. With the right knowledge and tools, you can confidently explore cryptocurrency as a valuable component of your retirement savings strategy.
At BitIRA, we are dedicated to guiding you through the process of diversifying your retirement savings with digital assets. Whether you’re familiar with cryptocurrencies or just starting your journey, our user-friendly platform and expert support are designed to make your experience as simple as it is rewarding.
Don’t let misconceptions hold you back – embrace the future of money and start building a more diversified retirement account today!
