Don’t Fall For The Bitcoin Gamble

Okay, perhaps the title to this email is a little misleading – there is much activity in the world of cryptocurrency these days … and that’s kind of the problem. 

There are hundreds of “coins” out there, and many shady places to buy them. Even worse? With so many types, it can be nearly impossible to truly understand what you’re buying and how to track its value. 

In contrast, with the type of growth and returns we’ve seen in the last year in cryptocurrencies, it’s certainly worth learning more about, and, even if the prices tumble in a (not unexpected) bubble bust, the fact is, it’s unlikely that Bitcoin – or many others – can lose ALL their value. 

So let’s go over a “primer” of sorts for getting involved with crypto… stuff you’ll need before you ever buy anything…

·      You’ll need to choose an exchange. Think of an exchange as a brokerage platform that allows you to convert legal tender (U. S. dollars, for example) to cryptocurrency. Some exchanges act more like banks while others simply offer an opportunity to buy and sell crypto. In the United States, the most common exchanges are Coinbase, Kraken, and Gemini, and while these offer an excellent means to exchange coins, they are not the truly anonymous cryptocurrency exchanges many people think of when they envision Bitcoin. Obviously, you need to choose your exchange from your plans. 

·      With your exchange sorted out, the next step is to create a wallet and set up your payment options. Just like your real wallet, this acts as the digital meeting point of your funds – the account(s) you’ll purchase from and the digital/crypto holdings you own. Your wallet is linked to the exchange, and, in the case of a brokerage style exchange, this is where purchases and sales of coins can be deposited. (It’s worth noting the “do it yourself” guides online wait to discuss wallets until after you set up your purchase… for obvious reasons, having your wallet set up is far smarter than waiting…)

·      With your exchange sorted, your wallet in place, and your accounts linked up, it’s time to buy … but what? THAT'S, the real challenge, isn’t it? There are so many choices, and the best plan is the simplest – do your research. As of this writing, it seems like there are cryptocurrencies available for various factors – from computer network payment tracking to marijuana-based coins. What is “appropriate” for you? You’ll have to sort that out for yourself. 

Now, obviously, there’s more to investing in Bitcoin and cryptocurrency than this, but there are hundreds of “how-to’s” online that can get you far more detail. 

Cryptocurrency is going to be an important part of many people’s investments in the coming years, so adopting now is not only an excellent idea, it’s also a profitable one for the long haul. 

Now, let me be blunt: I’m a tax professional, not a cryptocurrency expert, so while I’m happy to help you find the funds in your budget to invest (or at least investigate) crypto, if you have some interest, let’s sit down and look at your budget to see how you can use this newer tool to round out your wealth strategy.

IMPORTANT: Our firm specializes in tax resolution. We serve clients virtually so don't hesitate to reach out.  If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm, so we can schedule a confidential consultation to explain options to permanently resolve your tax problem. Make an appointment here! Or, call Toll-free 1-855-254-1892.