Investors Are Betting Their Retirements on Bitcoin and It’s Very Risky

When Bitcoin started its most recent rally this winter, Joshua Seymour, a construction worker in Elora, Tenn, decided it was time to jump in. A few months later, he worked to convert his Roth IRA into a self-directed IRA so he could invest in Bitcoin.

The cryptocurrency — not mutual funds — now makes up his entire portfolio in hopes that its price, currently just under $50,000, will continue to rise for decades before the 30-year-old retires. “I’m glad I did it,” says Seymour who is also completing a degree in information systems. “It’s the best long-term asset to hold.”

It’s long been an article of faith that retirement portfolios should contain a judicious mix of stocks and bonds. But with Bitcoin’s value — not to mention the ranks of the Bitcoin faithful — surging to new heights, more and more retirement investors have been considering the idea of owning the cryptocurrency alongside traditional securities. In some cases, they are betting it all.

To meet this new demand, a Bitcoin IRA cottage industry has sprung up, helping investors set up retirement accounts that can accommodate the cryptocurrency. However, many financial advisers, who advocate a slow-and-steady savings approach, view the practice with alarm. To them, today’s Bitcoin frenzy resembles the leave-your-senses-behind speculative mania of the dot-com bubble, which left some investors rich but many more disappointed and broke.

“It’s not any different than getting a dozen lotto tickets,” says Charles Sachs, chief investment officer at Kaufman Rossin Wealth, an advisory firm based in Miami.

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