Many people have bought and sold cryptocurrencies as an investment, but trying to live off a paycheck paid in crypto is tricky.
Alyssa Howell spent much of her career in the gold mining industry before joining a crypto wallet company last fall that pays all of its employees in bitcoin. The Denver-area resident said learning the ins and outs of the crypto industry — different types of virtual wallets, non-fungible tokens (NFTs), and browser extensions — was quite an education. .
“It’s been a very steep learning curve for me,” said Howell, 35, who works in investor relations for Exodus, a bitcoin and crypto wallet company. “It’s just a new industry, but it’s also changing very quickly.
“So there is always something new in crypto that has evolved.”
Howell never owned digital currencies before accepting this position. Now she gets paid in bitcoins on the first of every month – based on her US dollar salary.
“If bitcoin is $50,000 (per token) and I make $25,000 a month, I’ll get half a bitcoin,” Howell said. “Now the first [of the month]our company sets the price, so at a certain time on the first of every month, they’ll say that’s the bitcoin exchange rate.” Employees can then convert their crypto paychecks to dollars, with the company taking charges conversion costs.
Yet this single mother of two has gone all-in with crypto. She recently bought a new house, but struggled with the first lender she tried not to accept her bitcoin income.
Allysa Howell, left, works for a crypto wallet company that pays all of its employees in bitcoin.
“I was disqualified for a mortgage, which made me very nervous,” Howell said as he reflected on the experience. “Fortunately, this is not the norm; the world is changing, the world is evolving.”
She found a lender to accept her income in bitcoins and it was the one who also allowed her to make mortgage payments in cryptocurrency. However, the loan was recently sold and the new servicer will not accept crypto payments.
“It was a huge disappointment for me,” Howell said, “I’m going to have to buy fiat [U.S. dollars] to pay my mortgage, and I’m really trying my best to live in the crypto space.”
Howell said she keeps 10% of her salary in bitcoin for retirement savings and doesn’t worry about the ups and downs of the currency. “I’m a long-term cryptocurrency, so I’m not looking at volatility today,” she said. “I’m here for the next five years, the next decade, the next two decades.
“That’s where I really see the opportunity,” she added.
Exodus CEO JP Richardson said the company pays its employees in bitcoins to help make virtual currencies more mainstream.
“By supporting technology and embracing that technology and paying our employees with technology, we’re saying we believe in this for the long haul,” Richardson said.
Richardson also lives much of his personal financial life using crypto and he keeps enough cash in US dollars to handle expenses, he said, “just in case, God forbid, something happens. to cryptocurrency”.
Bitcoin prices have been on a roller coaster. The price peaked above $68,000 and traded below $30,000 for the past two weeks.
Financial advisors are warning investors to balance crypto investments with other financial goals. Before investing in crypto, make sure you have enough emergency savings and disability and life insurance and enough savings for retirement.
Yet advising clients can be tricky.
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“We’re trying to figure out as an advisor and as a fiduciary, what’s the best way for us to help our clients in this space,” said Catherine Valega, Certified Financial Planner and Chartered Alternative Investments Analyst at Green Bee Advisory. . , based in the Boston area.
Other considerations include fees incurred when exchanging bitcoins for dollars as well as tax implications.
President Joe Biden issued an executive order in March for regulators to review the risks and benefits of cryptocurrencies.
In the meantime, financial advisers are warning consumers and investors that cryptocurrencies do not offer the same protections as a traditional bank or brokerage account.
Still, Howell sees cryptocurrency as the future and wants his children to learn its value.
“What’s important for me to teach them is that money has value,” she said. Even though you can’t see or feel it, we assign value to it.
“I’m really focused on educating them to be careful and spend well.”