The research firm said that retirees are constantly on the headache for viable asset classes to invest in and that the acknowledgment of cryptocurrency IRAs by the Internal Revenue Service (IRS) can be considered as an gauge of rising demand for crypto assets by retirement account holders.
“Retirees are always interested in alternative assets that can forbear diversify their portfolio against market fluctuations. The IRS approving cryptocurrency IRAs is an indication that retirees are increasingly animate in including some cryptocurrencies in their retirement accounts,” the researchers said.
For retirees, even if bitcoin is considered a sustainable alternative to assets like gold as a store of value, it is difficult to invest in it because of technological boundaries.
Often, investors leverage crypto assets through regulated exchanges like Coinbase, Gemini, and Kraken in the U.S. But, due to strict regulations in place, investors are demanded to undergo a rigorous know your customer (KYC) verification process.
After the lengthy process, investors then have in the offing to move funds from their bank accounts to the exchange, most of which require online services.
The undivided process can be cumbersome for retirees and older investors, and until the process can be as simple as buying stocks through a company take to Fidelity or BlackRock through a call, the cryptocurrency market is unlikely to be compelling enough for retirees.
Bitcoin Has to be as Easy as Inventories
Investing in crypto needs to be as easy as trading stocks. | Source: Drew Angerer / Getty Images / AFP
Speaking to Opulence in late 2018 about his intent to bring bitcoin to 401(k) plans, NYSE chairman Jeff Sprecher stated that bitcoin does not have in the offing a good market structure yet.
He said:
“Bitcoin does not have a good market structure. Even for Bitcoin, varied markets are posting lots of different prices. And you can pay an up to 6% spread to exchange dollars for Bitcoin, meaning Bitcoin lacks to rise by as much 6% before you break even.”
In the future, Sprecher said that asset managers and fiscal institutions would use currencies millennials trust in to appeal to the younger generation, like bitcoin
“Millennials don’t trust standard financial institutions. To gain their trust, banks, brokerages, and asset managers can use a currency that millennials credit in, like Bitcoin. Using digital currencies brings a lot of sizzle,” Sprecher added.
If Fidelity, ICE’s Bakkt, and other custodial ritual providers can successfully create a solid market structure for bitcoin as suggested by Sprecher, more retiree account holders and investors who once upon a time were reluctant towards investing in bitcoin could find the asset class more compelling.