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What are Digital Assets and Why Should I Care?

August 06, 2021

What are Digital Assets?

While digital assets have become a growing part of daily life, many do not understand what a digital asset is. In a sentence, a digital asset is anything that exists in a digital setting that has individual or collective value. Some examples include:

·       PDFs

·       Emails

·       Photos

·       Social Media Accounts

The value and relevance of digital assets is only expected to increase as more interfaces, documents, and interactions incorporate new online technologies. This post, however, will focus specifically on a category of digital assets that are continually influencing modern finances.

 

Using Digital Assets to Your Advantage

One of the most talked-about digital assets in the past several years is cryptocurrencies. In an era marked by large-scale data breaches, cryptocurrencies have offered a potential solution. Instead of institutions like banks and investment groups holding your valuable information, it would be encrypted and stored in a cryptocurrency account. In addition, all transactions would be logged in what is called the blockchain, an encrypted transfer of funds. This also means that funds can be moved directly from person to person. Beyond this, cryptocurrencies have also made headway as valid nontraditional investment opportunities. Instead of buying shares of companies with currency, it is an investment in a new form of currency itself.

Some see its recent popularity and volatility as a reason to doubt its validity. However, this technology is marked by its pervasiveness and continually growing relevance. According to Binance Research in January 2021, 97% of cryptocurrency users are confident in the crypto market and over half are trading for long-term investment opportunities.

There are more opportunities to take advantage of cryptocurrencies than ever. In fact, a Bitcoin ETF was recently released to the public. This bridges the gap between traditional investments and those in digital assets. But it goes beyond this. Cryptocurrencies are now available as a part of 401(k)s. One of the newest nontraditional asset options for 401(k)s is in Bitcoin, a service Leading Retirement Solutions offers. 

 Back in 2020, LRS was among four collaborators who introduced the “world’s first Bitcoin 401(k) plan”, making it now legal for companies to offer employees the ability to invest retirement money into Bitcoin.  “As the world moves further into the digital age, it is vital that our services keep up and adapt to the changes,” said Kirsten Curry, founder and CEO of Leading Retirement Solutions.

 Previously this was only possible through investment vehicles like IRAs, but with a Bitcoin 401(k), forward-thinking entrepreneurs and their employees can now make use of the benefits of a 401(k) while investing in the next generation of nontraditional investments. These benefits including tax incentives, company matching, and dollar-cost averaging, are generally difficult to secure through other investing methods.

 Digital technologies are advancing every year, and with them, their power. The influence in the space of cryptocurrencies alone signals a bourgeoning environment. Leading Retirement Solutions believes that because these digital assets are growing in influence, our clients deserve the opportunity to invest.

About the Author

Davis Hedrick is the Content and Brand Marketing Intern here at Leading Retirement Solutions and finishing undergraduate degrees in English Literature and Philosophy.

 For more tips and information regarding retirement plans, contact us.

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