Bitcoin IRA enables you to purchase and sell digital currencies under a tax-advantaged IRA account through a self-managed trading platform. Besides, the platform supports the transfer of current IRA accounts to crypto IRAs and offers gold investment opportunities. Nevertheless, the account fees are costly, although it can help with tax savings. For a complete perspective, refer to our Bitcoin IRA evaluation to determine its suitability for a retirement investment.
Who Is Bitcoin IRA?
Operating as the BitcoinIRA brand name, Alternative IRA Services (AIS) identifies itself as the most secure cryptocurrency IRA platform. With over 100,000 account holders, Bitcoin IRA claims to be the first and largest platform of its kind globally. Founded in March 2015, it is headquartered in Sherman Oaks, CA, under the leadership of Camilo Concha, its founder and CEO.
What Do They Offer?
Bitcoin IRA offers a comprehensive system for trading cryptocurrencies within your IRA. Unlike other companies that provide comparable services and require piecing together multiple components, this company is a self-directed IRA provider that offers full-service.
The following are the services that Bitcoin IRA offers to its clients:
- Transfer of an existing IRA to Bitcoin IRA
- 24/7 cryptocurrency trading
- Custody
- Reporting — performance and financial statements
Roth, SEP, and Traditional IRA accounts are considered eligible. If a 401(k) is active, it can be utilized; however, the account holder must be either over 59.5 years old or have terminated their employment with the sponsoring employer to roll the 401(k) into an IRA. Additionally, annuities and pensions are options. The minimum amount required to initiate a standard account is $3,000. During our initial evaluation of Bitcoin IRA, fewer than ten coins were available for trade on the platform. Nevertheless, we have observed that the company has been continually increasing its list of supported assets over time, and it now supports upwards of 60 coins, including well-known altcoins such as Cardano (ADA), Dogecoin (DOGE), Solana (SOL), and Polkadot (DOT).
Open A New Saver IRA
Bitcoin IRA offers the option of opening a fresh IRA account. The Saver IRA, which only necessitates a minimum deposit of $100, is one of their new items.
In order to activate such accounts, you have to link either a savings or checking account and arrange automatic contributions of a minimum of $100. The chosen cryptocurrencies will receive monthly deposits that are initiated automatically.
Buy And Sell Crypto On Mobile
The mobile application of Bitcoin IRA is now available on Apple and Android devices. The company claims that it is the first app worldwide that permits users to engage in cryptocurrency trading in a self-directed retirement account. In addition, users can access advanced charts, establish personalized price alerts, and perform other functions via the app.
Do You Need To Form An LLC?
Other firms require you to establish an LLC to manage a self-directed IRA invested in cryptocurrency, but Bitcoin IRA offers a comprehensive solution that eliminates this step. It handles all the work for you.
Opting for a self-directed IRA entails a longer duration and more expenses, unlike a Bitcoin IRA account that only requires approximately three minutes to open with lower fees than a self-directed IRA.
Why Trade Bitcoin In An IRA?
Taxes on Bitcoin profits are treated similarly to those on stock trading profits. Short-term gains, realized within a year, are taxed at the standard income tax rate. On the other hand, long-term gains, held for over a year, are taxed at a lower rate of 0%, 15%, or 20%, depending on your income bracket. Trading in an IRA exempts you from taxes on gains, making them tax-free or tax-deferred. Contributions to a Traditional IRA are not taxed, and taxes on gains are postponed. Contributions to a Roth IRA have already been taxed, and gains are tax-free. Due to the high volatility of cryptocurrencies, they are typically traded for less than a year, generating more substantial short-term gains, which can be shielded from taxes by trading in an IRA.
Full Bitcoin IRA review
Investors who are interested in including cryptocurrency in their retirement savings while taking advantage of the tax advantages offered by an IRA will find this cryptocurrency IRA to be a suitable option.
Pros
- Tax-deferred crypto investing
- Gold investing
- Full-service IRA rollover
- Large selection of cryptocurrencies
- U.S. regulated
- Educational content
Cons
- Expensive fees
- Lack of fee transparency
- No crypto deposits
Top perks
Tax-deferred crypto investing
Bitcoin IRA offers better tax benefits compared to purchasing cryptocurrency through a broker or crypto exchange due to its nature as a self-directed IRA. Similar to a conventional IRA, the contributions made to Bitcoin IRA can be claimed as tax-deductible within the year they are made, while taxes are only due when withdrawing funds.
Bear in mind that the tax benefits come at the expense of relinquishing some freedom. With an IRA serving as a retirement fund, pulling out funds prior to turning 59 ½ will incur penalties for early withdrawal as well as being liable for income taxes.
Gold investing
Not merely restricted to digital currencies, Bitcoin IRA also offers the opportunity to purchase gold. The procedure and charges remain unchanged from buying cryptocurrency, with the exception that you will be acquiring the legal rights to tangible bullion bars.
Investing in gold through Bitcoin IRA is a quick and simple option that eliminates the need for paying expensive storage fees that other gold brokers typically require. The gold is stored in Brink’s bullion vaults and is fully insured.
What could be improved
Expensive fees
A set-up fee and transaction fees of 2% per trade are charged by Bitcoin IRA for your first investment. While these fees are prevalent in crypto IRA accounts, they are much higher than those charged by crypto exchanges. Typically, exchanges do not charge a set-up fee, and their transaction fees are 0.5% or less per trade.
Lack of fee transparency
Bitcoin IRA does not disclose its fee structure in advance. Instead, it suggests that you speak with a representative by calling them. Alternatively, you may email or use the chat function on Bitcoin IRA’s website to inquire about its fees from a representative.
It’s quite annoying how much effort is required by Bitcoin IRA to reveal its charging rates. Several other cryptocurrency platforms openly publish comprehensive fee data, so there is really no justification for the lack of transparency.
No crypto deposits
Transferring cryptocurrency into an IRA is prohibited by IRS regulations. A crypto IRA can only be bought into with U.S. dollars. This rule applies to all retirement accounts based on cryptocurrency, not just Bitcoin IRA.
Bitcoin IRA does not provide precise upfront figures on fees. However, it specifies that a one-time service fee will be charged based on the investment sum, in addition to a nominal custodian and service fee. It urges potential customers to contact a representative to obtain additional information.
Upon requesting a price quote from Bitcoin IRA, we received a list of fees from one of their representatives.
- Set-up fee: 0.99%-4.99% charged on the initial deposit
- Transaction fee: 2.00% on trades
- Maintenance fee: 0.08% of total account’s monthly value ($20 monthly minimum)
Is your cryptocurrency safe with Bitcoin IRA?
Bitcoin IRA provides a secure platform for purchasing, selling, and safeguarding digital currency with a strong emphasis on protecting client funds through multiple layers of security measures.
Bitcoin IRA’s web app is protected by SSL certification with 256-bit encryption. BitGo Trust, which is a custodian of Bitcoin IRA, offers the service of storing digital assets. BitGo is the biggest processor of on-chain Bitcoin transactions, with assets holding an amount exceeding $2 billion.
Bitcoin IRA ensures that all cryptocurrency investments are stored in cold storage, which is an offline method preferred for its maximum security as it is not linked to the internet.
Lloyd’s of London provides insurance for custodial assets up to $700 million through BitGo Trust.
How Does Bitcoin IRA Compare?
Bitcoin IRA faces tough competition from Alto and Rocket Dollar, as both these firms offer the flexibility to invest in a variety of assets using your self-directed retirement account. In contrast, Bitcoin IRA’s offerings are currently limited to crypto and gold investments.
Bitcoin IRA’s AUM-based fee (0.08%) is comparable to the flat monthly fees charged by Alto and Rocket Dollar (which vary from $10 to $30) for smaller accounts. Nevertheless, as your account grows in size, the monthly fee with Bitcoin IRA will also increase.
Alto serves as a viable option to Bitcoin IRA for those whose primary objective is investing in cryptocurrency, given its seamless integration with Coinbase. Nonetheless, it is worth mentioning that Rocket Dollar is the sole company among the three that enables investment in a self-directed Solo 401(k).
Is It Worth It?
If you desire to engage in cryptocurrency trading within your IRA, require a professional to establish the account for you, and are willing to accept the associated costs, Bitcoin IRA may meet your expectations. They provide highly reliable services, offer customer support via telephone, and facilitate hassle-free procedures.
In case you wish to utilize your IRA for investing in assets other than cryptocurrency, it is recommended to opt for a self-directed IRA provider such as Alto or Rocket Dollar. You can refer to our compilation of the top self-directed IRA providers currently accessible.
Leave a Reply