Hello, Quartz Index readers!
Should you seriously consider bitcoin for your retirement savings? The price of bitcoin seems to set a new record almost every day, and people are understandably curious how to get in on the action.
For the past year, BitcoinIRA has offered US individual retirement accounts (IRAs) invested entirely in bitcoin. But whether you should invest depends on how concerned you are about hyperinflation and how willing you are to tolerate extreme volatility in your portfolio.
Betting on bitcoin can certainly pay off: The monthly average return for bitcoin since 2010 is around 30%, compared with 1% for the S&P 500. But there’s a cost—the standard deviation of bitcoin’s price from month to month is a daunting 90%, versus around 4% for the S&P 500.
The goal in saving for retirement is a steady growth of assets that results in a reliable income when the time comes to draw down your account. Buying bitcoin is a very risky way to go about this, but also a bet on a transformed financial sector. —Allison Schrager
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