It seems like only yesterday that Bitcoin trading began on financial markets. The first futures markets for Bitcoin opened in December of 2017 to great fanfare. But since that time new developments in Bitcoin trading have been few and far between. Proposals for Bitcoin exchange traded funds (ETFs) have languished before regulators for months and months, continually failing to gain approval and having to be resubmitted. But now Bitcoin’s recent price rise has spurred some new plans to enhance Bitcoin trading.
Online stock brokerage E*Trade will soon be offering its customers the ability to trade in cryptocurrencies. The company’s initial offerings will allow customers to trade Bitcoin and Ethereum, the two most popular cryptocurrencies on the market. With close to 4 million customers doing business with E*Trade, that will open up a whole new area of the investing world to cryptocurrencies.
E*Trade may not be the only company to offer cryptocurrency trading either, as TD Ameritrade is also rumored to be testing Bitcoin and Litecoin trading for its customers. As more and more of these online brokerages offer cryptocurrency services to investors, it’s probably only a matter of time before all brokerages will offer Bitcoin to their customers.
It’s important to remember that these services don’t offer the advantages of Bitcoin IRAs, specifically the tax advantages that Bitcoin IRAs enjoy. With a Bitcoin IRA, investors are able to use pre-tax dollars and make gains tax-free until the time comes for them to take a distribution. That enables pretty significant gains over the long term, particularly as the growth prospects for Bitcoin continue to look strong.
Without the tax advantages offered by a Bitcoin IRA, investors are liable to pay capital gains taxes on their Bitcoin and cryptocurrency trading activities, which can take a significant bite out of their gains. While broader Bitcoin trading will boost demand for Bitcoin, which will result in higher prices, those looking to hold Bitcoin for the long term would do better to stick to the tried and true tax advantages offered by a Bitcoin IRA.
This article was originally posted on Coin IRA.
