Relationship Between Ethereum IRA and COVID-19
Contributed by Tripedia
29 November, 2020
COVID-19 has impacted all walks of our lives and the financial sector is no different. Stock markets all over the world have been badly hit and people are reluctant to invest their money in stocks. This has encouraged people to look at other investment options like cryptocurrencies. Ethereum is one of the cryptocurrencies that has emerged as the best avenues for investing money in these troubled times. Some people are even saying it is a safe haven for investments. Is this true? Do these claims have any merit? Should you be setting up an Ethereum IRA to safeguard your life-long savings? Let's find out.
Non-Traditional Investments and their Payoff
COVID-19 served as a huge shock for the entire financial world with many financial institutes struggling to adapt to the changing realities brought on by the pandemic. This was evident in the poor performance of the traditional investment avenues. Stock markets were badly hit and kept bleeding for a long-time during the pandemic. The recovery has also been very shaky with many people losing huge investments as a result of the turmoil that ensued in the stock market in the wake of the pandemic. Investments in the bond and money market have also led to reduced gains due to governments slashing interest rates in order to boost the economy. In short, the traditional investment avenues proved that they are safe investments in normal conditions but can really come up short in unforeseen conditions.
This leads to the question of what happened to non-traditional investments and did they come off any better? This can be easily gauged by looking at the surge in value of cryptocurrencies like Ethereum. There has been an astounding increase of over 246% in the value of the currency in the past year. It is not just Ethereum that has shown outstanding growth, other cryptocurrencies, like Ripple, have also seen an increase in their value.
The primary reason that non-traditional investment avenues have soared during the pandemic is because safe investment options have proven to be unreliable in these times. The stock market and the money market has been driven by panic and has resulted in people losing their trust in these markets as their sole source of income through investments. This has resulted in a search for other investment options that can bring value in the time of need and has led to the resurgence of digital currencies like Ethereum.
What Does the Future Hold?
There is a sense in the market that the rise of cryptocurrencies during the pandemic is a short-term phenomenon and that the regular investment options will recover and the value of cryptocurrencies will go down. This is an assessment based on the assumption that everything is going to get back to normal and the industry practices prevalent pre-pandemic will continue in the future.
However, there are multiple reasons to be wary of these optimistic predictions for the money markets and doomsday predictions for digital currencies and other non-traditional investment options. One major reason is that there is no guarantee that everything is going to go back to normal. A lot of experts believe that COVID-19 isn't going away anytime soon and will keep the world stressed for the next few years even if its strength and impact can be mitigated. This means that many governments will still have to provide stimulus to keep their economies afloat. Therefore, a V-shaped recovery in traditional investment options is difficult.
Another reason to be sceptical about these assessments is that COVID-19 has exposed the risky nature of every investment option with no stable avenue that can come out unscathed out of every situation. Similarly, as the world quickly goes through climate changes, emergencies are not going away anytime soon and one can surely expect further shocks to the economic system in the future too.
This means that while it might be true that COVID-19 will go away after some time and take away some of the gains made by cryptocurrencies, there is no denying that one can't confirm stability in the future with surety. In such circumstances, diversifying your portfolio becomes very important and will hold the key to the potential value you can extract from your investments in the future. And when you will think about diversifying, it is important to study which investment option showed the most growth when the going got tough and economic conditions worsened i.e. cryptocurrencies like Ethereum. If you want to find out more you can read the full detail for CEX.IO Review and Paxful Review.
Ethereum IRA - How Does it Work?
As already discussed, the turmoil left in the wake of the pandemic has changed perceptions about the traditional options for investment. In this climate, cryptocurrencies have gained with Ethereum one of the biggest success stories, from an investment standpoint, during the last year.
Ethereum IRA is an investment vehicle in the cryptocurrency that essentially works just like a retirement savings account. In the traditional IRAs, your funds are managed by financial institutes with the focus on investment in traditional options like bonds and shares. With Ethereum IRA, your funds are self-regulated. This means that you manage your savings in the IRA yourself and can invest it in Ethereum to gain value out of your investments.
There are multiple things to consider when choosing to invest in Ethereum IRA including account type, possible tax benefits and safety of your investment. Its best to do your research on Ethereum IRA in order to be able to make the right decisions in this regard.
How to Invest with Ethereum IRA?
Let's now evaluate how you can invest in Ethereum IRA in order to be able to gain value out of your investment. There are multiple options available with many firms available that can help you out. It's easy to open an account with a crypto IRA firm though it is important to evaluate the different companies and see their fees, trading platforms, security solutions and market reputation in order to come to a sound solution. Websites like Broker Choices are great options in this regard to help you with your research and to help you choose the right solution that fits your requirements the best.
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