Bitcoin IRA Review [2023]: Can You Fund Retirement with ...

As digital currencies such as Bitcoin grow in popularity, you may be contemplating their potential use in your retirement planning.

Yes, it is feasible to invest in cryptocurrency for retirement with the assistance of a custodian who can guide you through a self-directed IRA. Bitcoin IRA is one firm that can connect you with custodial and digital wallet solutions, and may be of added benefit if you’re looking to diversify your portfolio by investing in precious metals.

If you’re considering the inclusion of cryptocurrency in your retirement portfolio, it’s important to familiarize yourself with Bitcoin IRA and its operation.

This evaluation of a Bitcoin IRA will be analyzed.

What is Bitcoin IRA?

Established in 2015 by Camilo Concha, Johannes Haze, and Chris Kline, Bitcoin IRA is headquartered in Sherman Oaks, California. The firm assists investors in linking up with cryptocurrency wallet services and custodians that enable them to obtain a self-directed individual retirement account (IRA). With over 100,000 users, Bitcoin IRA has dealt with transactions exceeding $1.5 billion since 2017.

Investing in digital currencies through crypto IRAs is attractive to certain individuals because it enables them to avoid capital gains taxes that they would typically incur with non-retirement investments. Those who are interested in purchasing Bitcoin, investing in Ethereum, or incorporating precious metals into their retirement portfolios can utilize Bitcoin IRA to reach their objectives.


Minimum investment	$3,000
Management fees	Initial setup fee Custodian fee Storage fee Other fees vary with the account
Asset classes	Cryptocurrencies Cash Gold
Account types available	Self-directed IRA (Traditional or Roth)
Features	Help connecting with wallet services Help connecting with self-directed IRA custodians Help with rollovers
Best for…	Those who want to move some of their retirement assets into cryptocurrencies

What does Bitcoin IRA offer?

Bitcoin IRA provides all-inclusive IRA services for those interested in incorporating cryptocurrencies in their retirement investment portfolio. It should be emphasized that transferring existing cryptocurrency holdings to Bitcoin IRA is not possible. One option is to transfer a portion of your current retirement assets to an IRA, or you can use U.S. dollars to buy crypto assets to include in your Bitcoin IRA.

Bitcoin IRA assists in locating a custodian for a self-directed Individual Retirement Account and provides assistance with the establishment process. Custodians are generally financial institutions such as banks or trust companies that must be sanctioned by the Internal Revenue Service. Since Bitcoin and other virtual currencies are treated as assets rather than currency for IRA objectives, they need to be held in an IRA by a custodian. This process is comparable to holding real estate or other allowed alternative investments in an IRA.

It is possible to invest in the following virtual currencies by using Bitcoin IRA.

Bitcoin (BTC)
Bitcoin Cash (BCH)
Ethereum (ETH)
Ethereum Classic (ETC)
Digital Gold (DG)
Ripple (XRP)
Litecoin (LTC)
Stellar Lumens (XLM)
Zcash (ZEC)

Investing in physical gold through Bitcoin IRA is an option as well. The gold is stored in a Brink’s facility and is given a unique serial number.

Mobile applications are also offered by Bitcoin IRA to users of iOS and Android.

Bitcoin IRA accounts

You can establish a Bitcoin IRA as either a traditional IRA or Roth IRA. Additionally, it is feasible to transfer funds from previous retirement accounts into a Bitcoin IRA. Such accounts could include IRA, Roth IRA, SEP IRA, SIMPLE IRA, 401(k), or 403(b), and the transfer can be made for the entire amount or a portion of it. Before deciding on a rollover, ensure that you comprehend any associated tax implications.

Apart from having a basic IRA, you have the option of opening an Earn account with Bitcoin IRA, which enables you to gain interest on your assets. You have the potential to earn an APY of up to 6.00% on cash in your Earn account (as of Jun. 24, 2021). However, it is worth noting that only Bitcoin and Ethereum crypto assets can yield income with Earn, with Bitcoin yielding 2.00% and Ethereum yielding 2.70% (as of Jun. 24, 2021). Unlike the basic IRA, the Earn account requires a minimum starting balance of $10,000.

Bitcoin IRA security

BitGo Trust provides secure storage for the digital assets of Bitcoin IRA. Cold storage is used to store your assets offline, and the trading platform follows banking best practices by utilizing SSL security. Security is a top priority for Bitcoin IRA.

Although BitGo Trust collaborates with Lloyd’s of London for its asset insurance policy, it must be emphasized that SIPC insurance does not cover these assets. Nonetheless, Bitcoin IRA solely partners with self-directed IRA custodians that are regulated in the United States.

What are the pros and cons of a crypto IRA?

Over the last few years, there has been a sharp rise in the popularity of cryptocurrency, and 60% of individuals consider it a promising long-term investment. Nonetheless, the majority of people will not be able to obtain cryptocurrencies through their employer’s retirement savings plan, such as a 401(k).

Introducing the crypto IRA. Crypto IRAs operate similarly to traditional or Roth IRAs in terms of regulations, but provide the opportunity to invest in digital assets. Your provider may allow investment in popular coins such as Bitcoin, Ethereum, and Litecoin, and potentially in some alternative coins as well.

In this article, we will evaluate the benefits and drawbacks of initiating a cryptocurrency IRA.

The pros of investing in a crypto IRA

Access . This is probably the most visible benefit. The chance to invest in cryptocurrency in a retirement account is still a very new idea, and it’s currently only offered by specialty providers. But if you’re looking to add cryptocurrency to your investment strategy for retirement, you’ll only be able to do so through a crypto IRA as most 401(k), 403(b), and 457(b) plans only offer standalone mutual funds or target date funds as part of their respective investment menus. However, not all IRAs are crypto IRAs. The standard traditional and Roth IRAs offered by the most popular online providers aren’t yet equipped to offer direct investments in cryptocurrency.

Potential diversification . Some investors look to cryptocurrency as a means of diversifying their overall portfolio. According to a study by researchers at Yale University , there may be a diversification benefit to adding crypto – even a 6% portfolio allocation to Bitcoin can make your portfolio more efficient. That said, it doesn’t mean you’re doing anything wrong if you have a portfolio of index-tracking ETFs and mutual funds. Adding Bitcoin is a personal preference, based on where you stand on the risk-reward spectrum.

Tax benefits . Because crypto IRAs can be opened as either a traditional or Roth IRA, they enjoy many of the same tax benefits. For instance, in either type of account, capital gains are shielded from taxation so long as the money remains in the account. This is a major upgrade from holding cryptocurrency in a taxable wallet, where capital gains are taxed any time you sell an asset at a gain. If you expect outsized crypto gains, you may be better off holding them in a crypto IRA – particularly a Roth crypto IRA. Another benefit of Crypto is that unlike most other assets, you’re able to “stake” it to earn interest and other rewards. Any income earned via staking is typically taxed as it’s earned, but the crypto IRA eliminates this concern. Inside the walls of a crypto IRA, any regular income earned and received is shielded from taxation. You’ll still need to pay attention to tax status when it comes to deciding on traditional vs Roth crypto IRA. Recall that traditional IRAs are typically used as “pre-tax” retirement vehicles, meaning that taxation occurs at ordinary rates when you withdraw money from the account. Roth IRAs, on the other hand, hold after-tax money that grows tax-free until the death of the account holder.

The downsides of investing in a crypto IRA

Volatility . Crypto is generally believed to be more volatile than traditional asset classes such as stocks & bonds. As such, it’s smart to balance your allocation to cryptocurrency with your need, ability, and willingness to take risks. As people approach retirement, their willingness to take risk tends to drop rapidly, so the idea of holding a volatile asset may be unappealing to many pre-retirees and retirees alike. At the same time, this volatility is viewed as a positive by some investors – high risk can mean big rewards (or big losses).
Unproven asset class . Given that crypto is a relatively new asset class, some experts question their effectiveness as investments . Unlike equity shares, Bitcoin and other cryptocurrencies have no underlying earnings and no related cash flow. Hence it’s hard to get a true valuation for these assets.
Limited utility. Even though Bitcoin is increasing in adoption, it does have limited utility as far as paying for goods and services in today’s economy. Bitcoin transactions take place on the blockchain, a distributed ledger that aims to make payments faster and cheaper.