Most Solo 401(k) account holders know they can use their funds to invest in digital money like cryptocurrency. It uses blockchain technology instead of any central system. As per reports, the crypto market offers more than 22,000 cryptocurrencies. If you have a Solo 401(k) account, you want to put your money into the best choice even when this is a riskier undertaking. After all, the earnings can be handsome for your investment portfolio and retirement goals for wealth creation. Before opening your account with any third party, ensure they allow you to trade in cryptos. Usually, this type of transaction requires using a digital wallet, which you link with your checking account.
Also, you must participate in the retirement plan as an LLC to store your cryptocurrency. If you choose the proper administrator, it will eliminate all the stress. They will manage the entire paperwork, giving you complete authority over your checkbook. It’s possible if you opt for a self-directed IRA account type. For help, consider visiting solo401k.com. Now, let’s look at the best trading options for 2023.
Bitcoin (BTC)
It’s a market leader by market cap, price, and age. With businesses and banks encouraging bitcoin payments, it has caught fire. However, one significant risk with this coin is the price fluctuations. It can jump or nose-dive in a month, and 2022 witnessed this phenomenon. People who considered it protection against inflation had to reconsider their decision. Then, the collapse of the FTX cryptocurrency exchange added to the paranoia. But the crypto grew as much as 36% in the next three months in 2023 after an official from the United States Commodity Futures Trading Commission recognized it as a commodity. If you are a risk-taker, this coin is for you. Look at it as a long-term investment.
Ethereum (ETH)
While it is lower than bitcoin, ETH makes an excellent investment for its practical use. It’s a network that helps developers to build their cryptocurrency and smart contracts. The crypto landed late into the market, but this blockchain managed to garner enough attention and become the second most sought-after investment next to bitcoin. In 2022, Ethereum mining became obsolete, and the circulation of the coins has also reduced. Even its energy consumption has come down. Although it is less popular than bitcoin, some traditional companies have realized its potential. But some challenges are there.
Even after an upgradation as The Merge, Ethereum faces issues with speed and high utility charges. Because it uses a single lane for transactions, network overloading slows down the processing pace.
Solana (SOL)
Solana hosts decentralized finance (DeFi) portals and non-fungible token (NFT) marketplaces. It is also a blockchain technology that claims to be eco-friendly, fast, and much more. The crypto witnessed a 13,000% rise in 2021, with the price reaching USD$258.93 the same year. 2022 could have spelled better for this crypto. However, Solana has earned the attention of institutional and retail investors. According to market predictions, it can trade at USD$17.74 on average in September 2023, with maximum estimates suggesting a rise of USD$18.98. If someone holds it till 2034, analysts believe it can reach USD$1735.81 to USD$2603.72.
As mentioned, you can enter the crypto market with an appetite for risks. Your Solo 401(k) plan can help you fund your investment.
Frequently asked questions
1. What is a Solo 401(k) plan?
A Solo 401(k) plan is an individual retirement plan created for businesses with no employees other than the owners or their spouse. It offers contributions, tax advantages and investment options similar to employer-sponsored 401(k) plans.
2. How can I invest in cryptocurrency through mySolo 401(k) plan?
You can invest in cryptocurrency through your Solo 401(k) plan by setting up a self-directed IRA account. This will allow you to invest in cryptocurrencies without the need for extra paperwork and will give you full control over your retirement funds.
3. What are some of the best cryptocurrencies to invest in 2023?
Bitcoin (BTC), Ethereum (ETH) and Solana (SOL) are some of the best cryptocurrencies to invest in 2023. However, it is important to remember that these investments carry risk, so you should always do your own research and make sure you understand the risks associated with each investment before investing.
To sum up, there aremany types of cryptocurrencies available for investment. Depending on your risk appetite, you can choose from a variety of digital assets and make the most out of your retirement funds. Before investing in any cryptocurrency, it is important to do your due diligence and research the asset thoroughly before deciding which one to invest in.
Just like with any other type of investment, there is no guarantee of success, so always remember to be aware of the risks associated with each investment.
Conclusion
Cryptocurrency investments can be a great way to diversify your retirement savings and take advantage of the increasing popularity of digital currencies. With careful research and proper due diligence, you can make an informed decision about which coin is best for your individual needs. Investing in cryptocurrency through a Solo 401(k) plan gives you full control over your retirement funds and allows you to take advantage of the potential growth in the cryptocurrency sector.
Ultimately, it is important to remember that investing in cryptocurrency carries risk, so make sure you understand the risks associated with each investment before deciding which one is best for you. Good luck!
