An attractive perk of the Solo 401k is the ability to invest in non-traditional assets and one of the most exciting investment opportunities today is Cryptocurrency.
Different cryptocurrencies are making technological breakthroughs that have the potential to make history of a magnitude that could be compared with the creation of a personal computer, smartphone, or even the beginning of the internet.
Making the decision to invest in cryptocurrencies at the forefront of the industry is quite exciting, but once you make that decision, where should you consider investing your hard earned dollars?
There over a 1500+ different cryptocurrencies on the market, most of which are destined to fail. So how do you choose the ones most likely to succeed?
Nabers Group are crypto veterans. We have been investing in cryptoassets since April 2013. Our Founder and CEO, Jeff Nabers, created one of the first cryptocurrency hedge funds as a way to help investors capture the potential profits of this exciting new asset class.
We put a lot of time and research into the history of coins, the programmers behind them, their different applications and purposes.
Here are 10 cryptocurrencies to consider including in your Solo 401k portfolio:
- Bitcoin (BTC) – The original and most popular cryptocurrency. All transactions are recorded in a public ledger known as the blockchain. Bitcoin was created by Satoshi Nakamoto (an unknown person/group of persons), and was created as a peer-to-peer electronic cash system. People have used it for investing, crowd funding, as a payment system and programming platform.
- Ethereum (ETH) – Created by Vitalik Buterin on July 30, 2015, Ethereum is a blockchain-based platform which created the basis for “smart contracts”. Smart contracts offer the ability for contracts to execute themselves without the intervention of a third party as the code itself can execute both sides of the contract. Another special component of ETH is that other cryptocurrencies called ERC20 coins can be built using the computer code for the ETH blockchain. In 2016, Ethereum also had a hard fork, splitting the coin into Ethereum classic (ETC) and Ethereum (ETH). It was created with the goal of building de-centralized applications.
- Litecoin (LTC) – Litecoin is a fork of the original Bitcoin computer code. Charlie Lee, the creator of Litecoin, designed the code to have a faster block generation time and a greater maximum number of coins being released. The Litecoin network is generally 4 times faster than the Bitcoin network. It has enabled nearly zero-cost payments across the world.
- Bitcoin cash (BCH/BCC) – On August 1, 2017, Bitcoin had a hard fork in its computer code resulting in Bitcoin and Bitcoin cash. The Bitcoin ledger (blockchain) was split in two, with Bitcoin using one and Bitcoin cash using the other. Bitcoin cash has been referred to as an alt-coin of Bitcoin and is more commonly used as an investment tool rather than a currency for payment.
- Ripple (XRP) – Ripple is a controversial crypto asset, mostly because it is centrally controlled rather than decentralized. Many crypto programmers have argued that the centralization of Ripple (and it’s coin, XRP) makes it too easily to be inflated or manipulated, similar to fiat currency. However, many big banks have invested or endorsed XRP leading some investors to believe it may go up in value.
- Stellar Lumen (XLM) – Stellar Lumens is an open source distributed payment system. The nonprofit Stellar Development Foundation was created in collaboration with the CEO of Stripe, a popular payment platform, with Stripe funding $3 million worth of seed money. This cryptocurrency has been especially popular with non-profit organizations. Stellar aims to make transactions cheaper, faster, and more reliable. Stellar also hopes to connect people from all over the globe by allowing for more efficient cross-border payments.
- Zcash (ZEC) – Zcash specializes in privacy for it’s users while allowing allowing them to prove payments for auditing purposes. Zcash has been touted by Edward Snowden to be a solution to Bitcoin’s security risks. Zcash has a hard stop cap of 21 million units.
- Monero (XMR) – Monera is another popular privacy coin. The public ledger for Monero is obscured so that an outside viewer may not be able to determine what transactions take place. Monero is a popular option for clients, customers, and providers wanting private, secure, legitimate transactions.
- Dash (DASH) – Dash was initially launched in January 2014 as Xcoin and is currently a fork of Bitcoin. Dash touts quick transactions as a desirable feature and claims payments can be transferred and confirmed to the recipient within one minute. Dash also introduced the concept of Masternodes to the crypto marketplace. A masternode is similar to a full node of the bitcoin network (self-contained system of the Dash network). As a reward for running Masternodes, Dash miners are rewarded with dividends, similar to investment income.
- NEO (NEO) – Originally launched as AntShares in 2014, NEO was rebranded to NEO in June 2017. Like other cryptocurrencies, the quantity of coins is limited. 100 Million NEO were originally created, with 15 million being released each year. NEO’s ability to be used as cryptocurrency is a small part of what it can be used to. It’s biggest features being that it allows developers to deploy and scale smart contract applications and digital identities for organizations, individuals and others. NEO aims to be the Chinese version of Ethereum, with other coins being built on top of its blockchain infrastructure.
Nabers Group Solo 401k plans all allow investing into cryptocurrency. We can expertly guide you through the process of how to obtain and safely store crypto in your Solo 401k.
Many exchanges will allow you to open a corporate or institutional account in the name of your Solo 401k trust. Nabers Group has been helping our Solo 401k clients set up this structure for several years.
Here are the steps to purchase and hold cryptocurrency in your Solo 401k trust with Nabers Group:
- Setup your Solo 401k with Nabers Group: this process can be done online via our secure application and will generally take you about 10 minutes. The Nabers Group team will have your 401k documents prepared in just a couple hours
- Fund your Solo 401k plan: Rollovers and/or contributions are the way to get started. Open a bank account for your Solo 401k trust so deposit your rollover/contribution funds
- Open a cryptocurrency exchange account: We’ve had the most success opening an account with Kraken for the Solo 401k and have created a helpful guide for our clients
- Purchase cryptocurrency: Complete a wire from your Solo 401k trust bank account to your Solo 401k cryptocurrency exchange account and start purchasing crypto!
It’s important to remember that when opening an account with a Solo 401k, the account is opened in the name of the trust, NOT your personal name or business name. You should be using the Tax EIN attached to your Solo 401k trust, NOT your SSN or your business EIN.
Leaving your cryptocurrency on exchanges is generally not recommended as exchanges are vulnerable to hacking and you don’t hold true possession of your coins. Hot online wallets are a simple alternative to keeping coins off exchanges, but the safest way to hold your cryptocurrency is in cold storage via an offline wallet, such as a Ledger or Trezor.
WARNING: Moving your holdings to cold storage is not recommended for beginners or anyone who is not extremely technically capable. You can lose all your holding if this is done incorrectly so proceed with caution.
As always with hardware wallets YOUR SECURITY IS IN YOUR OWN HANDS and PROCEED WITH CAUTION AT YOUR OWN RISK.
Looking for a simpler way to get crypto into your retirement account? Our crypto IRA program allows you to purchase crypto in a traditional or Roth IRA and have the storage handled by an unrelated third party with multi-signature safety precautions. To learn more about holding crypto in your IRA, reach out to us directly at [email protected]. We’re ready to help!