Okay, perhaps the title to this email is a little misleading – there is a LOT of activity in the world of cryptocurrency these days … and that’s kind of the problem.
There are hundreds of “coins” out there, and a lot of shady
places to buy them. Even worse? With so many types, it can be nearly
impossible to truly understand what you’re buying and how to track its
value.
On the other hand, with the type of growth and returns we’ve
seen in the last year in cryptocurrencies, it’s certainly worth learning more
about, and, even if the prices tumble in a (not unexpected) bubble bust, the
fact is, it’s unlikely that Bitcoin – or many others – can lose ALL their
value.
So let’s go over a “primer” of sorts for getting involved
with crypto… stuff you’ll need before you ever buy anything…
· You’ll
need to choose an exchange. Think of an
exchange as a brokerage platform that allows you to convert legal tender (U. S.
dollars, for example) to cryptocurrency.
Some exchanges act more like banks while others simply offer an
opportunity to buy and sell crypto. In
the United States, the most common exchanges are Coinbase, Kraken, and Gemini,
and while these offer a great means to exchange coins, they are not the truly
anonymous cryptocurrency exchanges many people think of when they envision
Bitcoin. Obviously, you need to choose
your exchange based on your plans.
· With
your exchange sorted out, the next step is to create a wallet and set up your
payment options. Just like your real
wallet, this acts as the digital meeting point of your funds – the account(s)
you’ll purchase from and the digital/crypto holdings you own. Your wallet is linked to the exchange, and,
in the case of a brokerage style exchange, this is where purchases and sales of
coins will be able to be deposited.
(It’s worth noting that some of the “do it yourself” guides online wait
to discuss wallets until after you set up your purchase… for obvious reasons,
having your wallet set up is far smarter than waiting…)
· With
your exchange sorted, your wallet in place, and your accounts linked up, it’s
time to buy … but what? THAT’S the real
challenge, isn’t it? There are so many
choices, and the best plan is really the simplest – do your research. As of this writing, it seems like there are
cryptocurrencies available based on a variety of things – from computer network
payment tracking to marijuana-based coins.
What is “right” for you? You’ll
have to sort that out for yourself.
Now, obviously, there’s more to investing in Bitcoin and
cryptocurrencies than this, but there are hundreds of “how-to’s” online that
can really get you far more detail.
Cryptocurrency is going to be an important part of many
people’s investments in the coming years, so adopting now is not only a great
idea, it’s also a useful one for the long haul.
Now, let me be blunt:
I’m a tax professional, not a cryptocurrency expert, so while I’m happy
to help you find the funds in your budget to invest (or at least investigate)
crypto, if you have some interest, let’s sit down and look at your budget to
see how you can use this newer tool to round out your wealth strategy.
IMPORTANT: Our firm specializes in tax resolution. We serve clients virtually so don't hesitate to reach out. If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm so we can schedule a confidential consultation to explain options to permanently resolve your tax problem. Make an appointment here! Or, call Toll-free 1-855-254-1892.
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