What if your bitcoin becomes tax free in your jurisdiction? Congress making bitcoin transaction’s equal to cash as non taxable is already on the table. By the time I retire I expect this to happen. Then you essentially could have stacked sats the whole time and held your own keys. There is a solid chance risking your capital by giving control of your bitcoin to others for essentially no added benefit
Discussion
"what if" doesn't pay the bills. until that happens, we deal with it by focusing on tax shelters.
You’re essentially playing a “what if” by assuming your Roth doesn’t change the age of retirement, the qualifications to access your money and the rules our government makes around these types of accounts. Plus if I want to retire, and there’s taxes on my bitcoin, I get on a plane with 12 words in my head and then go live tax free with my family somewhere that makes sense financially. Think you’re missing the point
you are correct, those risks do exist. and I accept those risks by using the system. if the rules were changed to erase the tax shelters of Roth accounts, I think the entire country would erupt. our congresscritters are stupid, but I don't think they are self destructive.
being an expat is not a tax shelters.
With a Roth the government has a VERY strong incentive to keep it in place unchanged, they get more tax revenue now. Governments always prefer more money now versus in the future because they have terrible time preference. Conversely they have a very strong incentive to tax Bitcoin as it goes up massively in value and little incentive not to. Game theory supports Roth remaining in place. There’s no guarantees, but it’s more likely than not.
Few thoughts:
1) tax policy can be uncertain and expecting the government to not tax Bitcoin consistently for the next XX number of decades is a heck of a financial risk. That’s such a huge honeypot it’s hard for me to imagine zero taxes on any large asset forever. Politicians change and political parties fall in and out of favor with every cycle. Trump is not our last president and an anti-Bitcoin president in 20 years if the masses get jealous is totally possible, who knows.
2) Could always do some in and some out of an IRA. Doesn’t have to be all or nothing.
3) you can do an Unchained IRA and keep self custody. Zero custodial risk
Thanks for the well thought response, I appreciate it. You have a lot of valid points