Last month, BitCoinIRA was revealed as a new retirement tool that presents bitcoin as an alternative to the traditional IRA and other retirement savings options. What separates BitCoinIRA from others is that bitcoin is an actual currency that investors can hold, compared to other companies that rely on bitcoin-related stocks and ETFs. Appointed to the position of chief strategist was Ed Moy, a former director of the U.S. Mint.
I had the pleasure to reach out to Ed Moy regarding his move to BitCoinIRA. Below are his responses sent via email where he discusses his thoughts on including bitcoin as part of a self-directed IRA and the general trend toward digital currencies.
Carlo: Can you give us an overview about your background before joining BitCoinIRA?
Ed: I had the honor of serving the American people as the 38th director of the United States Mint from 2006 to 2011. Before that, I worked in the White House and spent most of my career prior in the private sector.
Carlo: What got you interested in cryptocurrencies?
As Mint director, it was my job to stay up to date on any developments in the field of money. Cryptocurrencies were in their infancy. At first, it was their use as decentralized currency that was interesting to me and later, it was the disruptive potential of the blockchain technology. Today, I’m interested in their potential to bring the world’s unbanked into the modern economy, reducing the cost and improving the efficiency of money transmittals, and its ability to become the 21st century equivalent of gold.
Carlo: Can you tell us about the steps taken for you to become the chief strategist and advisor for BitCoinIRA?
I want to make bitcoin more accessible to the general public and I was looking for an innovative organization that would be the first to offer bitcoin as an investment vehicle for retirements. As the former Mint director, I wanted to work with a company that had the highest standards and a proven track record of going above and beyond what was required to satisfy government regulators. I am proud of what we are able to offer at BitCoinIRA.
Carlo: Can you tell us about the Bitcoin IRA investment tool announced this month?
Ed: A bitcoin IRA is essentially a self-directed IRA, which have been around for a while. Self-directed IRAs were created to allow individuals to invest in alternative assets like gold. In order to do this properly, there needs to be a custodian and a special place to hold the bitcoin. BitCoinIRA is the first to provide these mechanisms to legally invest bitcoins in an IRA, just like you might with any other currency. The big difference is that because bitcoin is a new currency, it has attractive upside potential over the long term along with downside risk. For example, a $200 investment in 2011 would yield over $1 million today.
Carlo: The general public doesn’t have a full understanding about bitcoin, and oftentimes associates the cryptocurrency with illegal activities (i.e. Silk Road). Do you think it will be a challenge to interest in people in using bitcoin to diversify their portfolios?
Ed: A lot of the general public’s opinion on bitcoin has been shaped partly because it’s new and the stories written about it have had a sensationalist aspect to them. The reality is that the number of transactions have quadruped as more people become better educated about bitcoin. Investors have also poured money into bitcoin startups. As those companies enter the marketplace, they will be incentivized to educate the general public to buy their bitcoin-related products and services.
Carlo: BitCoinIRA has joined exclusively with BitGo for the security of Bitcoin IRAs. How did this partnership come about?
Ed: Because BitCoinIRA is a self-directed IRA, a crucial component is to be able to securely store the bitcoin in a way that complies with the IRS. We went to BitGo, who we consider the maker of the most secure bitcoin wallet, and asked them to create an IRS compliant wallet for us. We were very pleased with the final product.
Carlo: What experience from your previous positions have you found particularly important when working with BitCoinIRA?
Ed: Being the former Mint director was especially important because it helped me understand bitcoin as a currency and as an investment. I was also the former head of a federal regulatory agency, which gave me the knowledge of how regulators do their job. Both of these positions have given me a certain reputation, which makes me go the extra mile to ensure we have an exceptional product that will satisfy all regulatory requirements.
Carlo: You’ve gone from working within a government-run financial system (i.e. U.S. Mint) to a system completely free of government control. What has this transition been like? What have been some of the most noticeable changes when it comes to strategy?
Ed: I’m all for competition and the free market, so the transition has been very satisfying. To me, bitcoin is a free market alternative to the government’s monopoly on money. I still believe in our monetary system, but I also think that people should ought to have choices. Let them decide what form or type of currency and payment system works best for their transactions. But many people today aren’t as familiar with bitcoin as they are with paper bills and coins, so education is a big strategic focus. Today, there are enough tech savvy investors that will be early adopters and take this opportunity to enter the market.
Carlo: How do you see bitcoin and other cryptocurrencies influencing long-term investing in the future?
Ed: The use of cryptocurrencies and the technologies that power them will only rise in the future. As usage increases, I believe bitcoin’s price will likely appreciate as the market prices in its increasing utility. We can expect volatility in the short and midterm. That makes it a very speculative investment. However, in the long term, bitcoin can be an attractive high risk high reward investment, which makes it a good diversification play for retirement.
Images courtesy of BitCoinIRA (Ed’s photo taken by Jed Share)