Whilst there is a delay in the action – a quick personal story…
The company I work(ed) for changed to a different retirement account custodian. This change also caused us employees to lose our ability to select/trade stocks with our 401 and Roth funds. Now ALL of your savings had to go into one of the custodial savings funds (made up of a basket of crappy stocks/bonds).
I had a nice nest egg that I have been saving for over 30 years in this program just waiting for the ETF and the chance to take my savings to the “next level”. Of course I was anticipating this ETF from the day the Winkle boys first applied. I did put a large portion of my savings into the Grayscale products and that was nice – for a short duration.
My company/custodian forced us to liquidate our brokerage selections and move into the pre-selected death spiral funds. Of course this happened this summer when the dip occurred and I got wrecked with the move.
With the most certain bull run that was coming I really only had two choices.
1. withdraw all the retirement savings and pay the early penalty
2. quit the company – thus allowing the funds to be freed for a short stint while I shop for a new custodian (the IRS gives you 60 days to re-invest into a new qualified instrument).
I quit my job, took the retirement funds and am riding the wave for 60 days. It has already paid for a couple years salary.
Fingers crossed – breath held.
In the infamous words of the ESPN Ocho announcer Pepper Brooks “It's a bold strategy, Cotton. Let's see if it pays off..”
You are correct that it is a risky... strategy.. and another option would have been to take a loan from your 401k or to invest into bitcoin in separate funds.. but sure, maybe your 401k loan limit is quite low and sure maybe you do not have enough separate funds to make any kind of meaningful and significant investment into bitcoin.. so it does seem that you have given a decent amount of assessment of the risks (maybe not enough of an assessment, but you do not seem to be flying blind).. which is about as much as anyone can hope for under such desperate (seemingly highway robbery-like circumstances).
By the way, EatonABooger if you have not already gotten back into BTC with your 401k funds, then where are you with that? You can do self-directed, but that usually would have required setting something up in advance (before quitting your job) and then you can get the 401k funds and then invest them through your self-directed system... otherwise, if you are just riding out the 60-days then it appears that you are going to have to pay the penalty (10%-ish) (and perhaps the taxes) if you do not find a authorized new custodian, no? Might be better to completely take the funds if BTC performs well enough, too... Maybe you got into BTC in the $40ks or $50ks with those retirement (401k) funds?
1. quit job >> check
2. take the 100% cash-out option (except for the 20% that the custodian is required to hold back for taxes - in case I do not roll back into a plan) >> check
3. immediately invest into BTC / ETH >> check
4. wait out the 60 days and let the market "hopefully" moon >> in process
5. cash out BTC/ETH and put the funds equivalent to those in step 2 back into a qualified retirement plan that allows brokerage options (letting me pick almost anything that is on the exchanges)
6. invest the retirement funds back into Greyscale and new ETF products
7. report back to nice folk at W.O. forum with results.
8. pick out party attire for the 100K hoot nanny
Note: yes, there will be taxes on short term gains
Note: yes, one could just bail on the plan and leave the funds in BTC / ETH depending on how the market behaves - will have to look at pro/con