
Fidelity now allows clients to put bitcoins in IRAs - a3voices
http://blogs.marketwatch.com/thetell/2013/12/11/fidelity-now-allows-clients-to-put-bitcoins-in-iras/
======
3am
Oh my god, is that ever inaccurate. It's a trust available only to accredited
investors that happens to invest in Bitcoin. By that logic, you can put just
about anything in your IRA.

Here's a random Google result about the variety of bizarre funds out there:
[http://money.usnews.com/money/personal-
finance/articles/2009...](http://money.usnews.com/money/personal-
finance/articles/2009/12/02/the-10-strangest-mutual-funds)

edit: corrected my mistaken categorization of SecondMarket investment vehicle.

edit: invest in fine art (sorry, no funds open to new investment) -
[http://www.thefineartfund.com/index.php/en/products-and-
serv...](http://www.thefineartfund.com/index.php/en/products-and-
services/funds/)

edit: invest in vintage wines -
[http://www.wineinvestmentfund.com/index.aspx](http://www.wineinvestmentfund.com/index.aspx)
... and so on.

~~~
nitrogen
The ability to borrow art from the Fine Art Fund sounds like a fantastic
benefit of being an investor.

------
ISL
I once rode in a taxi where the cabbie regaled me with his retirement plan;
each time he'd saved up enough money, he'd go on a trip to Atlantic City and
try to win. He was fairly certain that this was a good idea.

Please don't play with more than you can afford to lose. It's bad for bitcoin,
and a crash might be bad for you. If you can't afford to retire, society may
compel others to help you. Please be responsible.

I'm not a tax lawyer: The tax-free nature of Roth IRAs might render some of
the questions of bitcoin taxation less of a concern?

~~~
fragsworth
> Please don't play with more than you can afford to lose.

When considering investing in something like bitcoin, draw out a table of what
you expect the outcome to be 10 years from now. Rows can be bitcoin price
ranges (each row having what you believe is a roughly equal chance of
happening), and columns can be how much you invested in it. Rate your expected
happiness (use some scale -100 to 100?) from each result in each square. Keep
in mind that if bitcoins reach a high number like $100,000 and you didn't
invest, you will feel like you lost that money. (I feel this way now, from not
investing previously - and it kills me. Happiness -25 maybe.)

The only logical thing to do, at this point, is pick the column that results
in the highest happiness.

It turns out that for those of us who believe there's a reasonable likelihood
(25% or greater) that bitcoins will be very high ($1 million or higher) over
its lifetime, the logical thing to do is actually to put the vast majority of
our savings into bitcoin. Nearly all of it, in fact.

~~~
pfisch
Holy hell, this is some crazy advice.

If you have a sizable savings that you have been building for 5 or more years
then the vast majority of your savings shouldn't be invested in any single
asset.

~~~
fragsworth
It's only optimizing for happiness, based on expected outcomes. The only thing
that might be crazy are the numeric expectations.

~~~
dragonwriter
> It's only optimizing for happiness, based on expected outcomes. The only
> thing that might be crazy are the numeric expectations

The craziness is doing it _with one asset_ and trying to maximize happiness
based on assumptions about that asset and not _with all possible alternative
assets_ and trying to maximize _overall_ happiness.

Well, one part of the craziness.

Really, what you should be doing is considering (1) overall returns of
competing investments, (2) overall risk of competing investments, and (3) the
degree to which those risks are independent, and (4) your own sensitivity to
risk, and then combine assets and allocate investment funds among them so as
to, achieve the maximum expected return possible with enough diversification
to acheive a risk profile you are willing to accept.

~~~
fragsworth
Oh, I agree. The difference is no other asset class that a non-accredited
investor can put their money in has even remotely close to the same growth
possibility as Bitcoin. IRAs, 401ks, stock indexes, and other asset classes
don't do much other than protect you from inflation. You can pick specific
funds or companies, but their value is more or less correctly priced and
you're just gambling if you try to pick and choose, because you don't have
inside knowledge.

Bitcoin (cryptocurrency) is different, because it hasn't been priced yet by
investors who truly understand the technology or its implications. It's like
the stock market for web companies in 1995. As an analogy, we're maybe in 1996
or 1997.

~~~
justinhj
It's like that yes except that you don't know whether bitcoins are like Amazon
or Pets.com. Investing in anything as volatile as bitcoins is straight up
gambling

------
gojomo
SecondMarket's BitcoinTrust appears to still be limited to accredited
investors, though.

Wealth tests ought to be just as illegal as other forms of discrimination.

~~~
drone
It's a test that's defined by law [1], ostensibly to protect the non-wealthy
from being scammed easily. [2] AFAIK, the intent is to prevent scammers from
directly selling highly risky investments to the average Joe without
explaining to them the complete depths of the risk.

[1]
[http://www.sec.gov/answers/accred.htm](http://www.sec.gov/answers/accred.htm)

[2]
[http://www.institutionalinvestorsalpha.com/Article/3214072/S...](http://www.institutionalinvestorsalpha.com/Article/3214072/SEC-
Commissioner-Walter-Says-Accredited-Investor-Standards-are-Too-Low.html)

~~~
fragsworth
Yeah, well, it also fucks over an intelligent but average-income Joe from
being allowed to invest in deals that have as high of a return.

For instance, I know right now that I'd like to invest a chunk of cash into
several VR companies. I can't, though, because I'm not accredited. I have to
wait for their IPOs, which will happen _way after_ everyone already finds out
how much it's all worth.

~~~
pfisch
The good of accredited investor laws far outweigh the bad. People who don't
have a lot of money are much more likely to not have good money management
skills than people who are able to hold on to lots of money for long time
periods.

Without accredited investor laws you would just pour tons and tons of dumb
money into the system and the volume of scams would go way up.

This is not to say there are not rich people being conned, but when that
happens it often does not bankrupt them because they are less likely to go all
in on a single asset. Something people with poor money management skills want
to do all the time.

~~~
gojomo
True scams aren't much slowed by accredited investor laws. Scammers just move
into the areas - gambling, real estate, amateur high-frequency-trading, under-
the-table offerings - that escape SEC control. And people with poor money-
management skills can already put _all_ their money into legal things that go
to zero - like lottery tickets or leveraged real-estate or Enron or pre-
reorganization GM.

And, 'dumb money' mainly gets smart by trial-and-error, and observing the
lessons of peers. Locking all non-millionaires out of private investing
prevents that process from even starting.

------
simbolit
for the non-Americans:
[https://en.wikipedia.org/wiki/Individual_retirement_account](https://en.wikipedia.org/wiki/Individual_retirement_account)

~~~
infruset
Thanks! I almost thought this was about some cult trying to finance armed
Irish groups using Bitcoin.

~~~
SilasX
It was an unfortunate choice of acronym in the legislation.

------
KVFinn
Seems like most mainstream coverage about bitcoin is in the context of an
investment instead of a currency.

I wonder if this is hurtful in the long run -- thinking about bitcoin as
something to stock away for retirement rather than a useful tool in
transactions. Great for prices in the short term I guess.

~~~
if_by_whisky
All currencies are also investments. Investments that have additional
properties that make them useful as a medium for exchange. Like divisibility,
portability, etc... Btc is so volatile that it probably is, for many, better
as an investment for the time being. Once there's less risk and more
confidence, we could see that change.

------
sheetjs
Now for the crash ... (the retirement accounts are usually the last ones
holding the bag)

~~~
fat0wl
yeahhhhhhhh... first thing i thought when i saw this: "this is dark"

------
smtddr
I am super-pro bitcoin supporter, but somehow I have a horrible feeling about
this...

~~~
Aqueous
Why?

The more mainstream investors come on, the more people will have a stake in
BitCoin, the less single individuals can influence or manipulate the price,
the more points of failure there are, the more stable it will be.

I have a fidelity IRA with risk spread across very risk-averse mutual funds
with dependable year after year growth. For me, this will just be one more
thing I can add to my already fairly stable IRA, shielded from taxes, which is
great...

~~~
jorgem
>> the less single individuals can influence or manipulate the price

972 people control half of all bitcoins, right now.

What makes you think things will get better?

source: [http://www.businessinsider.com/927-people-own-half-of-the-
bi...](http://www.businessinsider.com/927-people-own-half-of-the-
bitcoins-2013-12)

~~~
DustinCalim
I'd say that's on par or better than most corporations...

~~~
ars_technician
So? Corporations aren't pitching their stock as a currency. A currency isn't
something that's meant to be hoarded by a few people. That causes deflation
and deflationary currencies are poisonous to the economies because they
discourage spending.

How many people do you think are spending their coins vs how many are holding
them hoping they will be worth more?

~~~
laichzeit0
At least more people are buying coins, and more and more merchants are
accepting bitcoins. This is going to be a very long and gradual process to
critical mass where it then becomes a viable currency. Right now it's a
speculative investment. Perhaps that is a viable route towards becoming a
currency, who knows. This is Darwinian and no one can predict what will happen
and no one can know how it "should" happen. All we know right now is
"something is happening" and you're either on board or you're on the sidelines
watching.

In my opinion the word "currency" is about as stupid as that thing in your
pocket people still keep calling a "phone". It's best approximated legacy
words we have to express ideas about something which it doesn't entirely fit.
More interesting, for me, is a comment I read on HN a few days back where
someone said "I could be carrying a million dollars on this thumb drive and no
one would even know.", a distributed ledger, the script language in the
bitcoin protocol, etc. these things transcend the word "currency" as we
ordinarily use it.

~~~
DustinCalim
I like your phone analogy, it rings true

------
jorgem
I could not find XBTFUND symbol (or any other search with the term "bitcoin")
when I went to Fidelity.com

Anyone know the symbol?

------
brokentone
In fairness this isn't directly storing bitcoins in a fidelity wallet, there
is now an EFTish fund that is bitcoin-backed accessible to fidelity customers.

------
kolev
Correct me if I'm wrong, but isn't this the end of Bitcoin? It was created to
keep us independent from Wall Street and governments and now when Big Money is
interested in (profiting from) it, it's Game Over.

~~~
damian2000
But at least it would have served its purpose of redistributing some wealth
from Wall Street into the pockets of first adopters and programmers. ;-)

~~~
kolev
True, but those who will join late will be the big losers.

------
negamax
This is a great idea to offload the high prices to the last mile. Now there
just need to be a major push on news about Bitcoin and it be a perfect
slaughterhouse.

------
samstave
I see all these ways to spend the mythical BitCoins, zero ways fro me to
create some.

Is there any feasible way to get any BTC when I only have my home couple of
machines (none of which are GPU giants)?

~~~
maxerickson
It isn't what you mean, but you can get some by buying them.

Mining bitcoin without special purpose hardware is pointless. Your best bet
would be to predict whatever copycat was going to get popular and have mined
some of it before that happened (but this isn't a simple prediction to get
right...). Then you can probably trade those for bitcoin.

~~~
nwh
At this point there's almost 200 "the new thing" alt coins. Everybody wants to
be in on "the new thing", which makes them all just pump and dump economies.
It's a futile idea.

~~~
maxerickson
I was sort of trying to not make it sound like a good idea.

