Anyone on this site should know and acknowledge the numerous inherent risks to owning cryptocurrency. At this stage, cryptocurrencies – also referred to as blockchain, cryptos, and crypto-assets – are incredibly volatile, and are at best an early-stage speculative vehicle.
We also realize that many individuals we work with hold beliefs that do not make them “traditional” investors. These individuals must acknowledge the many risks in having concentrated positions in Crypto-currencies and the dangers of not being diversified.
The “Traditional” retail investor must also realize the risks inherent in Crypto-currencies and bitcoin.
GENERAL BITCOIN RISKS
There’s the political risk that cryptos could be banned by the government.
- Extreme volatility
- Short track records,
- New altcoins displacing current cryptos / an ever-evolving marketplace
- New laws and legislation,
- Hacking, quantum computing,
- Safety of exchanges and exchanges getting hacked
- Loss of private key(s),
- Lack of a central authority (which for many are a good thing). This means no re-do’s or mulligans
- Currency risk,
- Geo-political risk
And this is just to name a few.
Investors must also realize that we will not provide ongoing market timing advice on when to move from one crypto to another or what crypto to initially buy. We will provide you with the information you need to make an informed decision, but it’s information that you should vet yourself. All models are hypothetical examples only and are not endorsements. Past performance is not an indication of future returns.
Retirement investors must use good judgment when it comes to asset allocation. Investors must also realize that even though retirement accounts provide great tax-deferral and avoidance strategies, it may be a moot point if assets go to zero or fall dramatically. In the event of a “home run”, such strategies may prove to be extremely beneficial, but there are no guarantees.
Investors in self-directed IRAs must acknowledge the grave risks associated with “checkbook” privileges and must take extreme caution against engaging in prohibited transactions. Neither Crypto Wealth Advisors, LLC, nor its affiliated companies and contractors will take responsibility for such prohibited actions. You must consult with your own attorney or tax advisor to safeguard against such actions. We have a selection of lawyers that we refer our clients to from time to time. There is no obligation to use one of these lawyers and we receive no compensation for such referrals. The client must acknowledge what prohibited transactions exist before setting up a self-directed IRA, and this can also be found in the legal documents used to establish such an account.
SELF-DIRECTED IRA RISKS:
All of the above plus:
There’s the potential that cryptos could be added to the list of prohibited IRA assets.
CHARITABLE TRUST RISKS
Investors considering charitable trusts and foundations must weigh all of the pros and cons. The most serious consideration is that such action is irrevocable and cannot be undone. Tax laws and estate laws are subject to change at any time which may adversely affect your projected benefits.
We are not lawyers or accountants and any information about taxes or estate law is just that – information. Please consult with a lawyer or tax professional before making a decision.
In some instances, we may have relationships with non-profits, solicitors or affiliates. Any such relationship and/or compensation shall be revealed prior to entering into an agreement.
Please also realize that we believe the above information to be accurate, but with an ever-shifting tax landscape, all scenarios were strictly hypothetical and are subject to change. Before acting on anything please consult your own financial advisor. Past performance is no indication of future returns.