Ruth K. Says:
Hi Jeff,
I’ve often taken your advice on various investments, and read today’s Field Notes, hoping you might suggest where we could put our Bitcoin these days. Mine is with BlockFi, mostly in the Wallet part, and I know I’ll soon have the option of moving it, but where do you suggest we move it to? I’m not really comfortable putting it on a memory stick (a private wallet), but am at a loss as to where I can put it as a U.S. citizen living in the U.S. these days.
Any tips?
Field Notes Editor Jeff Opdyke Writes:
Hi Ruth,
That’s a great question, particularly at this moment when the Securities and Exchange Commission is going all-out to attack the crypto industry by suing the two biggest exchanges—Coinbase and Binance.US.
You have a few options here. But before I tell you those options, I really would suggest reading up on hardware wallets and figuring out if you can get comfortable with them. These are USB-like drives built with special encoding that prevents hackers from gaining access to your crypto assets. They are very easy to use and ensure that your crypto always remains in your name, which is the height of security.
I primarily use a Ledger Nano X wallet. You can get them through the Ledger website here. (I get no benefit from telling you that. I’m just sharing a product I use and like. Also, for security reasons, always buy direct from Ledger, no matter what discounts you find online.)
Now, if you decide you simply do not want to go the hardware wallet route, then there are a few other options for holding your bitcoin…
I don’t see an immediate risk with storing your assets at Coinbase, even though the SEC is suing it at the moment. Coinbase is the biggest player in the U.S. crypto market, and I expect it will resolve the SEC case by paying a manageable fine and changing some internal procedures.
Another option, and perhaps the best option in this case, is to open a PayPal crypto account. PayPal now allows clients to transfer cryptocurrencies into and out of their account. This will likely be the most convenient option when BlockFi releases crypto assets that have been locked down. You would need to have a PayPal bitcoin address, and you would need to tell BlockFi to send your bitcoin to that PayPal address.
There, you would be able to hold or sell your bitcoin. And because PayPal is connected directly to your bank account, you could buy and sell bitcoin for dollars quite easily, with the costs and proceeds flowing effortlessly between PayPal and your bank account.
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