It looks like my friend who was actively working converting his 401k to a bitcoin IRA is chickening out. 🤦
This is after telling me he knew I had "done well" since 2018. I said, "look man, it's either bitcoin or a CBDC dollar." He knows exactly what the latter means, but damn, "safety" will probably defeat this new mental model.
It's heartbreaking to watch.
Meh. It’s costly if you’re talking $M to sell it all, wait up to 90 days for dollar transfer, and then pay 1.5% exchange fee.
He should setup a new ira and start contributing to that. And buy etf bitcoin with his conventional retirement product.
I think he should just sell the whole thing and just buy bitcoin. Considering bitcoin's cagr, he will rcoup the penalty in no time, and he will hold the bitcoin himself.
I got it all done in 2 weeks. Then it only took me about 10-13 months back in 2018 coming off the Dec 17 ath to cover the costs. I can't remember exactly how long it was, but it was very worth it so I could self-custody. I think he's scared of that as well.
It took our group over 12 months to move our profit sharing plan to IRA. The benefits of self custody vs. ETF aren’t worth the tens of thousands of dollars it would cost me even if I could move my conventional IRa instantly to bitcoin ira.
But as far as starting over with a new IRA, it’s not a terrible deal. Not that much worse than buying from a retail exchange, which is how most are forced to buy anyhow.
I'm in principle opposed to custodial services, with rehypothecation being the primary concern, but I completely get why people would be likely to do it.
I agree. Like security, it’s perfectly good enough right up until it isn’t.
But the entire stock and bond markets are built around such trusted relationships. That doesn’t mean it is good, but it does mean it works most of the time. The probability of failure is low, but the cost of failure is high. Thus insurance via self custody makes sense. But how much to pay for that insurance? 1% is steep, imho
I think the probably of failure grows significantly the closer we get to the end of this monetary cycle. All the guarantees people thought they had in 1928 were completely gone by 1931. I'm not saying the end of the dollar is imminent, but it will happen. Any non-bearer asset is at risk of depreciation or confiscation by the banks. I've tried to get this across to my friend. His mental models won't allow him to think this way.
By the time probability of collapse of the custodial system reaches 1 in 100, I’d bet self custody IRA costs will be more than 1.5%
Have you read the great taking by David Rogers Webb?
It’s about the legal structure of bankruptcy regarding all the folks that stand between you and your retirement holdings.
No. I will even though noone custodies any of my retirement holdings.
Sounds a lot like Anakin's fall to the dark side. Just doesn't make any sense, but they still believe the lies of "safety" and "if the Jedi destroy me, the power to save Padme will be lost forever." Deluded.
good analogy. Safety is a mind poison that makes people irrational. You can probably guess where he fell on vaccines.
Nigga 'bout to have a 4.01K. 💁♂️
RIP. Sorry for his loss. 🤙
I have familymembers in the same boat. They know the "unsinkable" ship has hit an iceberg and is taking on water, but hoping to ride it out in the safety of the bar with the live musicians.
Fiat has helped to create soft people... complacent and too comfortable in their privilege. Unlike in past times, the number of Americans willing to sell it all, uproot their families, and head via "wagon" to a better place are few... about as few as there are bitcoin.
