How about saving resources to ensure a smooth retirement by investing in bitcoin? According to the Wall Street Journal, financial services companies are launching new products and services that include retirement portfolios.
The report shows that there are already funds with names like “CryptoIRA” and “BitcoinIRA” that allow ordinary investors to add bitcoin and other cryptocurrencies to their investments intended for retirement. “In a recent survey of more than 500 financial advisors conducted by the Financial Planning Association and two other organizations, 14 percent of advisors said they use or recommend cryptocurrencies for such purpose”, the story highlights. In 2019, that rate was less than 1 percent.
However, although bitcoin is considered an interesting strategy as a store of value, it is also an asset with high volatility, which requires caution for those who want to secure retirement. The Wall Street report also warns about this risk and the importance of diversifying the investment portfolio.
Retirement in bitcoin is already possible in Brazil
In the United States, retirement plan provider ForUsAll formalizes a partnership with Coinbase to allow customers to invest up to 5% of their portfolio assets in cryptocurrencies, as reported by Cointelegraph. In Brazil, bitcoin participation in retirement wallets is also already an option.
XP Seguros, for example, has just launched Hashdex Cryptoativos XP Seguros Prev FIC FIM, a cryptocurrency pension fund. The product proposal offers passive management, with 40% of the wallet (cap limit) tied to the Hashdex Nasdaq Crypto Index and another 60% in fixed income.
According to Infomoney, an initial contribution of R$ 5.000,00 will be required, and the product will have a maximum administration fee of 1.70% per year. Without a foreign exchange hedge, the fund will be exposed to the variation of the dollar. For XP Seguros’ head of investments, Roberto Teixeira, “having an allocation of 5% to 10% in cryptoassets is interesting in the long run”.
The idea behind using bitcoin in pension funds is to protect capital and assets against inflation without government interference. Despite the high volatility, the currency was considered the best investment in Brazil in the first six months of 2021, with an appreciation higher than the IGP-M.