In this episode of Adam Talks, IRA Financial’s Adam Bergman Esq. discusses Silicone Valley Bank (SVB) and the “mini banking crisis” and how that has impacted Bitcoin and your retirement account.
SVB, Bitcoin & Your IRA
In this podcast, tax attorney and founder of IRA Financial, Adam Bergman, discusses the impact of the Silicon Valley Bank (SVB) crisis on retirement accounts and Bitcoin. SVB marketed to startups and venture capital funds and made long-term bets with interest rates. Rising interest rates caused deposits to dwindle, and investors began withdrawing their money, causing a run on the bank. The Fed guaranteed deposits for SVB and other banks, preventing mass bankruptcy. Bergman notes that IRA investors have little to worry about since the US banking system is now the safest it has ever been due to the Fed’s actions.
Bergman emphasizes that Bitcoin has been resilient, as investors spooked by the SVB crisis and other bad actors in the crypto space have turned to it. Bitcoin has been up over 7% this month, while gold has been up about 6%. He believes that Bitcoin and other alternative investments can diversify investors’ portfolios and protect them from financial crises.
Bergman believes that the quick increase in interest rates, which we haven’t seen in 40 years, is the catalyst for the banking crisis. He notes that the banks are working together to stabilize their finances, and there could still be some turbulence ahead. However, he thinks that his relationship with Capital One, the 8th largest bank in the United States, serves his clients very well. He advises IRA investors to spread their money out over different omnibuses if they have more than $250,000 in their accounts.
Bergman points out that IRA investments are not guaranteed, but IRA Financial and other self-directed custodians have omnibuses that allow for pass-through FDIC insurance and can be spread over multiple accounts. IRA investors typically leave a small percentage of their assets in cash and use their accounts to make alternative investments, such as real estate, gold, or Bitcoin. He emphasizes that the Fed guarantees cash deposits, not IRA investments, such as Bitcoin or gold.
Bergman concludes by discussing the Fed’s actions to prevent a financial catastrophe and believes that the US banking system is now more secure than ever. He notes that the Fed acted quickly and appropriately, and he is proud of his relationship with Capital One. Overall, Bergman believes that IRA investors have little to worry about and that alternative investments, such as Bitcoin, can diversify portfolios and protect investors from financial crises.
Listen to the whole podcast to learn more!