Should Bitcoin Or Other Cryptocurrencies Be In Your Retirement Accounts?

It has been a few years since I’ve written about Bitcoin

BTC
and cryptocurrency, but lately a few folks have been asking me about investing in cryptocurrency for retirement. A caveat here that I tend to be a very conservative investor who follows the advice of my fellow Oklahoman Will Rogers: “I’m not as concerned about at the return on my principal, as I am about the return of my principal.” This of course is the financial version of primum non nocere, which physicians interpret as first do no harm.

Folks who have been financially fortunate in life tend to follow this formula, and thus are often bond investors for the primary reason that at least one gets their money back at the end of the bond’s term. These folks don’t need to go forward so much as they don’t need to go backwards. They don’t need the return; ergo, they don’t need the risk. Whether their interest coupons keep up with inflation, that’s a different story and constitutes an investment risk, but that risk is better than the potential for the loss of principal which can ensue when one casts their moneys onto the risk versus rewards spectrum.

Anyway, there are suggestions percolating their way up through Congress which would allow cryptocurrency investments directly into certain types of tax-advantaged retirement accounts, such as the ubiquitous 401(k) plans. To understand whether this is a good or bad idea, one must first consider what cryptocurrency…