Sep 1, 2018 07:25 UTC
Sep 1, 2018 at 07:25 UTC
Will Bitcoin Ever Reach Your 401K?
In what is being called the “biggest” Bitcoin news of the year, an all-star financial group is seeking to bridge the gap between Wall Street and Main Street in terms of cryptocurrency. Now, Bitcoin is only mere steps away from becoming the first world currency and a mainstay of your retirement fund.
Cryptocurrencies have now gone mainstream.
Recently, Intercontinental Exchanges (ICE), the owner of the New York Stock Exchange, along with mainstream names like Starbucks, Microsoft, and the Boston Consulting Group (BCG) have launched a joint venture that aims to make Bitcoin mainstream and the preferred method of global payments.
This new company—Bakkt—seeks to bridge the gap not just between Wall Street and Main Street as far as Bitcoin is concerned, but also between underground and mainstream. Eventually, you may see a Bitcoin balance in your Bank of America account and maybe even 401 (K).
According to the company, this is in an effort to bring trust and utility to digital assets.
An Open, Seamless Global Payment Network
The partnership merges major players from all of the major business realms—finance, retail, tech, etc.— in an effort to create a trusted global network. Microsoft’s cloud technology will be utilized to create an open but regulated digital asset network, bringing trust to what is still considered a volatile ecosystem.
The company wants to allow consumers to use their crypto like cash, which users will be able to do at Starbucks starting in November.
This groundbreaking development will finally connect the world’s existing financial market infrastructure to the blockchain. For all of its potential and positive qualities, the one true flaw of Bitcoin as it stands currently is its impracticality. Bakkt wants to put an end to that.
At its core, Bakkt will function as an “on-ramp” of sorts for merchant and consumer participation in cryptocurrencies. It will establish a 1-day physically delivered Bitcoin contract as well as physical warehousing subject to the U.S Commodity Futures Trading Commission regulation.
This kind of financial backing, stability, and trust brings a level of security not yet scene in the world of cryptocurrencies.
As the flagship retailer of this new development, Starbucks will lead the way in helping users convert their Bitcoin to U.S Dollars for use at retail outlets, opening up new avenues for developing crypto-focused business models.
What Does this Mean for Your 401 (K)?
Despite some analysts predicting Bitcoin’s quasi-mainstream status will make it a legit long-term investment for a retirement plan, that day is far off.
For one, institutions offering these plans are liable to be sued if they offer an asset that is too volatile. One look at Bitcoin’s rollercoaster ride over the past year requires a vomit bag ($2,000 to start 2017, $20,000 late 2017, down to less than $7,000 currently). And, unlike stocks, there is no underlying valuation method.
While blockchain technology is certainly here for the long-run, the currencies themselves are too volatile to be considered viable retirement investments. In general, it is too difficult to tell which ones are best for the long-term.
Of course, Bakkt could change all of that. With government regulation, major retail acceptance, and a trusted global exchange network, Bitcoin is taking baby steps in the right direction. Perhaps in a few years, there will be a fund that holds a basket of currencies to help hedge your bets.
Until then, it’s best to continue to hodl your BTC in cold storage
This opinion piece is penned by Josh Reif, a crypto enthusiast and CEO of Crypto Launch Media, an ICO marketing firm. With a background in copywriting, sales, and marketing, Josh is focused on educating the public on emerging blockchain technologies and helping new companies communicate their value to the market.