Litecoin IRAs: Based on Fast, Useful Blockchain Technology
Many investors are looking for more innovative assets to add to their IRA portfolio. They also want the potential to grow long-term ROI that exceeds the profits expected of traditional assets, such as stocks and bonds. If you have already set up an individual retirement account (IRA) or an employer-sponsored retirement plan (such as a 401(k) plan) that is eligible to roll over to an IRA, consider a new investment option: a tax-deferred retirement plan based on the Litecoin digital currency.
Litecoin IRAs, one of BitIRA’s many solutions, combine an established and trusted investment method (the IRA) with the potential long-term value growth and returns of cryptocurrencies (new digital assets).
More Assets, Benefits, and Control
Self-directed IRAs (SDIRAs) are a vehicle for retirement saving that provide investment opportunities into a wide variety of asset classes. Buying Litecoin within an SDIRA can be a good investment for investors interested in the long-term value prospects of Litecoin. Litecoin IRAs offer you the chance to:
- Participate in the exciting cryptocurrency market. A 2014 ruling from the IRS enables investors to set up and add assets to Litecoin-based IRAs as a long-term retirement investment.
- Purchase Litecoin or other alternative assets with retirement savings. In an SDIRA, you can invest in and manage unique assets that are not permitted in conventional retirement accounts. This includes Litecoin and many other cryptocurrencies, plus a wide variety of other non-traditional assets such as precious metals, real estate, and equity positions in startups.
- Combine traditional and alternative assets. You can also invest in conventional and alternative assets in the same digital IRA.
As an SDIRA owner, you can also enjoy a wide variety of benefits:
- More diversified investment assets. By investing in Litecoin and other virtual currencies, you expand your investment opportunities by going beyond conventional IRA assets, such as stocks, bonds, and their related funds. Because cryptocurrencies are a new type of asset, be sure to understand the ins and outs of using Litecoin for diversification.
- More control over your investments, With SDIRAs, you can choose from a wide variety of assets. No one makes the important decisions of which types of assets you can choose from and how to manage them–it’s all up to you.
- Tax-deferred returns. If you follow the rules and regulations for an SDIRA, you can buy Litecoin instantly and hold them for as long as you’d like. It doesn’t matter whether you sell your position within your IRA tomorrow or in three decades; until you start taking distributions from your retirement fund, taxes on your returns are deferred.
You’re In Charge, But You’re Not Alone
The biggest difference between self-directed and standard IRAs is who’s responsible for what. In conventional IRAs, you can rely on professional money managers to compile a set of assets, from which you can choose to buy with your contributions. Owning an SDIRA is very different. You have complete control over the assets stored in your retirement account, with a massive variety of asset classes to choose to invest in.
If you want the unique benefits of an SDIRA, you must accept responsibility for managing your assets. For example, you must decide when to buy, sell, or actively trade cryptocurrencies. Also, your Litecoin investment must be stored in a safe place—usually on a hardware wallet (a thumb drive or other offline storage device).
Although you must make the investment decisions for your assets, BitIRA is always available to help you complete the paperwork and explain any technical details. When you start a Litecoin IRA with the help of BitIRA, we help you open your account with the Equity Trust Company or Preferred Trust Company. Both are certified SDIRA custodians that make necessary disclosures and handles all other tax-related, administrative details on your behalf.
BitIRA’s solution also provides the highest level of security by storing your coins in the market’s first fully insured cold wallet. This approach avoids the risk of theft that exists to a higher degree with an online (or hot) wallet.
Litecoin Rides the Waves of Change
Cryptocurrency advocates and industry analysts are getting restless. Blockchain developers promised to deliver innovative technology that has real-world uses, not just opportunities for price speculation. Development of these products and services has been slow.
Now more than ever, cryptocurrency value will be based on buyers’ opinion of its performance in everyday applications. The good news is, Litecoin has already developed a reputation as a fast, cheap payment transfer system. Litecoin developers are busy improving its blockchain technology and seeking business partnerships to make it an even stronger competitor in the cryptocurrency market.
Update. Recent news stories about Litecoin include:
- Dec 2018. Litecoin (LTC) overtook Bitcoin Cash (BCH), one of its major competitors and an offshoot of Bitcoin, in terms of market capitalization. This has bolstered Litecoin’s reputation as “digital silver”.
- Feb 2019. Litecoin announced an emerging partnership with Beam to use the Mimblewimble protocol, allowing for confidential transactions on the Litecoin blockchain.
- Apr 2019. Since the beginning of the year, LTC has risen in value by 190%, making it one of the best-performing altcoins of 2019 so far. Analysts predict that an LTC halving event later this year will also drive growth.
- Oct 2020. Litecoin makes a move towards privacy. This project looks to adopt key privacy-enhancing features, which are already being tested, and an upgrade to the main network is scheduled for next year.
What Makes Litecoin a Competitive Cryptocurrency?
Litecoin is the third largest cryptocurrency, with a market capitalization value of USD 13.126 billion at moment of publication. Because Litecoin is based on a variation (hard fork) of bitcoin code, their technologies are very similar. But since the currencies separated in 2011, developers have improved the Litecoin technology in many ways.
Now, Litecoin outperforms Bitcoin technology and offers other attractive characteristics, which include:
- A single use case. Litecoin has only one purpose: fast, cheap payment transactions. Bitcoin technology must support fast, high-volume payments and maintain its investment value. To succeed, Litecoin only has to be capable of handling payment transfers quickly and cheaply.
- More coins. The supply of Litecoin is four times greater than bitcoin (84 million versus 21 million tokens). The lower unit value, greater supply of coins, and easier crypto mining will keep Litecoin more affordable.
- Faster transaction times. Thanks to the super-fast Scrypt algorithm, Litecoin block time takes 2.5 minutes for transaction confirmation, but Bitcoin technology requires 10 minutes.
- More agile development. The Bitcoin development community requires an extreme degree of agreement to make any changes to its technology. The Litecoin community is set up to be more flexible in its approach to code changes. Rapid response to changing business or technical conditions makes it easier for Litecoin developers to create a product that appeals to users.
- Easier crypto mining. Like bitcoin, the Litecoin supply is controlled by crypto mining, the process of taking possession of coins by solving a challenging cryptographic task. However, Litecoin miners require less hashing power (time and computer processing power) to generate new coins.
- Attention paid to business and technical matters. Litecoin developers also look to the business side of their operations. They actively seek and nurture business partnerships and work proactively with other companies to increase Litecoin use.
Signing up for a Litecoin IRA provides the long-term benefits of a varied asset portfolio, tax-deferred returns, and a cryptocurrency investment with a future. If you have questions about cryptocurrencies or SDIRAs, contact us today for answers.