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⭐ Features
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The Dangers of Retiring on Bitcoin: High Risk on Important Investment

  • Darryn Pollock
    ⭐ Features

    The idea of retiring on Bitcoin has become more and more attractive, but there are some stern warnings against setting up cryptocurrency retirement funds

The Dangers of Retiring on Bitcoin: High Risk on Important Investment

 

The world is changing significantly, and Bitcoin and Blockchain are part of that change, as a younger generation start to look to their futures and securing a retirement plan that can work for them.

It is unsurprising then that a generation that has been part of Bitcoin’s boom is now looking to this asset as a potential asset on which to base their retirement on because of its potential for huge growth.

However, that growth is a double-edged sword as many have experienced. The highs that Bitcoin can reach, can also be matched with dizzying lows. And, for an investment plan based on retirement, which is supposed to be low risk and steady, Bitcoin seems counterproductive.

An SEC warning

It is not only common sense that says one needs to rather look to steadily, slow-growing asset for a retirement plan, but the SEC in the US has also weighed in on the trend of people trying to set their retirement up on Bitcoin.

Cryptocurrency prices are incredibly hard to predict, and their behavior makes them very risky, especially when it comes to retirement funds. It’s generally advised that if you have a penchant for cryptocurrency, it’s best to play with funds you can afford to lose, not with the money you’re planning to live on.

But the SEC’s concern is more than just about volatility, they are concerned with the number of fraud and scam investment opportunities that abound in the cryptocurrency space.

Lori Schock, director of the SEC’S Office of Investor Education and Advocacy, explains:

“Now that some self-directed IRAs include digital assets m– cryptocurrencies, coins and tokens, such as those offered in so-called initial coin offerings (ICOs)– we think it is important to alert investors about the potential risks and fraud involved with these kinds of investments that may not be registered.”

Dangers of ICOs

Even moving beyond simply investing in cryptocurrencies, there is a lot of danger in investing in ICOs as part of a retirement plan as ICOs have often encapsulated the dangers of fraud and the volatility of the cryptocurrency market.

It is all too tempting for people to try and become early investors in an ICO with the hopes of making astronomical gains, but, as the ICO market has moved along, there have been a number of instances where projects are abandoned, or fail, or are outright scams.

The idea of putting your retirement into one of this projects is extremely risky as the project may collapse, be a scam to begin with or never really gain, only lose.

Cover image via u.today
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About the author

Darryn Pollock is an award winning  journalist from Durban, South Africa. He picked up Vodacom’s Regional Sports Journalist Award in 2017 while expanding his Blockchain and cryptocurrency reach.  He is a contributor to Forbes, Cointelegraph, Binary District, and of course, U.Today. Darryn’s belief is that Blockchain technology will be the driving force of the next technological wave and it is the obligation of journalists and writers to tell its emerging story with integrity and pride.

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