3. Bitcoin individual retirement account

Investors who wish to invest in bitcoins for the long-term can consider adding them to their retirement account through a self-directed IRA which offers a tax-efficient, low-cost and easy way to invest in real bitcoins. The mechanism to invest in bitcoins is simple and starts with a minimum investment of $5,000 for a small upfront purchase fee and without annual charges.

An individual needs to open a self-directed IRA and then fund it either through a transfer or rollover. This is followed by the completion of the investor's bitcoin allocation order.

BitcoinIRA gives investors a chance to benefit from bitcoin's long-term potential rise while insulating one's portfolio from conventional capital market-related risks. Investors must note that the rules for a bitcoin IRA are similar to any regular self-directed IRA.

Thus, money can't be withdrawn without penalty until the holder of the account is 59 1/2. Since the launch of BitcoinIRA in June, the inflow of investment has crossed $500,000.

The increasing acceptance and rising user base of bitcoin along with its uncorrelated price movement with the capital markets makes it a good investment option. Investors can allocate a small amount to bitcoins to diversify their portfolios and gain from its evolution.

Although the outlook for bitcoin remains positive, cryptocurrencies are in a nascent stage, and thus a clear direction about their future is hard to predict.

Bitcoin as an investment can be perfectly summed up in the words of Barry Silbert, founder of Bitcoin Investment Trust: "It is pretty much the highest-risk, highest-return investment that you can possibly make."

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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