The popularity of cryptocurrencies is on the rise, with an increasing number of investors and financial advisors recommending small investments in these digital assets.
Investing in cryptocurrencies has a drawback – the inability to keep the assets in a retirement account. Nonetheless, there is a solution to this issue with Bitcoin IRA, an IRA provider and trading platform that enables investment in crypto, even for retirement purposes.
Bitcoin IRA stands out among the limited platforms allowing investors to finance their IRA using gold and cryptocurrency. Though not without flaws, this comprehensive IRA service provider offers strong security measures, a program for crypto earnings, and user-friendly features, making it a viable option to explore.
Pros & Cons
pros
- Offers an IRA account where you can purchase, hold, and trade more than 60 different cryptocurrencies.
- You can hold physical gold bullion in your account.
- High interest savings — up to 6% — with no lockup period.
- Unlike many other SDIRAs, you do not need to create an LLC to participate in a Bitcoin IRA.
cons
- Minimum required investment is $3,000 unless you select a mandatory monthly contribution plan.
- Per IRS requirements, you cannot transfer crypto directly into an IRA account; all account fundings must be done in cash.
- High fees compared with conventional IRA accounts
- $10,000 minimum requirement to participate in Bitcoin IRA Earn
- Though private insurance is available, there is no coverage offered through FDIC or SIPC.
What Is Bitcoin IRA?
Bitcoin IRA was launched in 2016 to enable investors to hold cryptocurrency in their IRA and 401(k) accounts. They offer both traditional and Roth IRA accounts, as well as self-directed 401(k) accounts. The company already has more than 100,000 users and claims to be the largest crypto retirement platform in the industry.
Bitcoin IRA is not designed to be a comprehensive IRA account, but rather an additional option that allows you to include cryptocurrency and possibly even tangible gold in your retirement investment portfolio. If you intend to invest in other types of assets, such as stocks, bonds, and mutual funds, you must consider a conventional retirement plan.
What Do They Offer?
Bitcoin IRA is an all-in-one platform for trading cryptocurrencies from your IRA. The company is a full-service, self-directed IRA provider , which is different from the many companies offering similar services that require cobbling together several pieces.
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 eligible, along with the possibility of a current 401(k) under certain conditions. If using a 401(k), individuals must either be over the age of 59.5 or have departed from their employer, allowing for a rollover into an IRA. Annuities and pensions are also viable options. The standard account requires a minimum of $3,000 to open. Initially, Bitcoin IRA’s platform permitted trading of fewer than 10 coins, but the impressive addition of assets over time has resulted in support for over 60 coins, including popular altcoins like Cardano (ADA), Dogecoin (DOGE), Solana (SOL), and Polkadot (DOT).
Open A New Saver IRA
A fresh IRA account can be established with Bitcoin IRA. Their latest offering known as the Saver IRA requires an initial investment as low as $100.
In order to initiate any of these accounts, it is necessary to link either a savings or checking account and establish regular deposits amounting to a minimum of $100. The funds will be invested in the cryptocurrencies that were specifically chosen on a monthly basis.
Buy And Sell Crypto On Mobile
The mobile application for Bitcoin IRA is now available on Apple and Android devices, marking its recent launch. It is deemed the first-ever app by Bitcoin IRA that permits the exchange of cryptocurrencies within a self-managed retirement fund. In addition, the app enables users to access intricate charts, personalize price alerts, and other features.
Do You Need To Form An LLC?
Bitcoin IRA offers a turnkey solution for self-directed IRA without requiring the creation of an LLC, which sets them apart from other companies providing cryptocurrency IRAs. This means that they handle everything for you.
The process of opting for a self-directed IRA requires more time and incurs greater expenses, whereas setting up a Bitcoin IRA account takes merely three minutes and involves lower fees compared to a self-directed IRA.
Why Trade Bitcoin In An IRA?
Taxation works the same for profits earned from trading in Bitcoin and trading in stocks. Short-term gains from stocks held for a year or less are taxed at the regular income tax rate, whereas long-term gains (held for more than a year) are taxed at a lower rate of 0%, 15%, or 20%, depending on your income. When you participate in an IRA, taxes are not a concern as gains are either tax-free or tax-deferred. Traditional IRAs have tax-free contributions and deferred tax payments on gains, whereas Roth IRAs have already been taxed on contributions. Roth IRAs do not require taxes on gains. Holding cryptocurrency for less than a year tends to result in volatile values, which leads to higher short-term gains. However, trading in an IRA shelters these capital gains from taxes.
Are There Any Fees?
Bitcoin IRA essentially imposes three distinct fees, namely:
- One-time set-up fee : 5.99% of deposited funds
- Trade fee : 2% on all buy and sell orders
- Account fee : 0.08% of assets under management (billed monthly)
There are miscellaneous service fees that can be avoided, including fees for both domestic and international wire transfers.
How Does Bitcoin IRA Compare?
Two major rivals of Bitcoin IRA are Alto and Rocket Dollar. These two firms permit investments in almost any asset within a self-managed pension account, whereas Bitcoin IRA is limited to crypto and gold at present.
If you have a relatively low balance, opting for Bitcoin IRA’s AUM-based fee of 0.08% would likely be comparable in cost to the fixed monthly fees (ranging $10 to $30) charged by Alto and Rocket Dollar. Nevertheless, as your account balance increases, so will the monthly fee charged by Bitcoin IRA.
Alto presents a viable option for those prioritizing investment in crypto over Bitcoin IRA, thanks to its seamless integration with Coinbase. Nevertheless, it must be acknowledged that only Rocket Dollar among these three firms permits investment in a self-directed Solo 401(k).
Who Is It For?
Anyone who desires to include or engage in the active trading of cryptocurrencies in their retirement plan can utilize Bitcoin IRA. You will be presented with the option of selecting a conventional IRA account (which allows for tax-deductible contributions but imposes taxes on withdrawals) or a Roth IRA account.
By contributing to a Roth IRA, you can deduct your taxes, however, at the age of 59 ½, and after being part of a Roth plan for five years, your withdrawals won’t be subject to taxes.
As a self-employed individual, you have the option to establish a self-directed 401(k) plan if you desire to make bigger contributions to your retirement savings. With this plan at your disposal, you can contribute a maximum amount of $67,500 for the 2022 calendar year.
How’s the Customer Service?
Customers can reach out to Bitcoin IRA’s customer service through an 877 phone number, but no information is provided on the availability of services. Alternatively, customers can utilize the “Schedule a Call” feature located under the “Why Us?” tab on the website to schedule a 15-minute consultation with a Bitcoin IRA specialist at a chosen time and day.
Bitcoin IRA holds an A+ rating with the Better Business Bureau and obtained accreditation in March 2020. Over the past three years, only three complaints have been lodged against Bitcoin IRA with the agency.
Is It Safe?
By storing all of your investments offline, Bitcoin IRA ensures optimum safety for your digital assets. Your digital assets are securely stored in a separate cold storage account at BitGo Trust, which is a qualified custodian based in the United States.
In addition, you will receive the advantage of trading with 256-bit encrypted SSL certification and a digital wallet that meets top-notch security standards with multi-sig (P2SH) and financial privacy standards with HD (BIP32).
At the same time, the assets held in Bitcoin IRA custodial accounts are insured for up to $700 million through BitGo Trust and its insurance provider, Lloyd’s of London. Additionally, gold stored in the account is insured both while in transit and at the Brink’s vault facility where it is held.
Bottom Line
Investment in cryptocurrency is drawing increased attention, however, only a few platforms allow it through an IRA account. Bitcoin IRA is experienced in this area and is among the few that facilitate such investments.
Considering including crypto in your long-term retirement portfolio? It may be worth exploring the option of opening an account with Bitcoin IRA.
When opening an account with the primary intention of investing in cryptocurrency, it is important to ensure that the majority of your retirement savings are kept in traditional accounts. Only a small percentage of your overall retirement savings should be invested in cryptocurrency. It is crucial to ensure that the bulk of your investment portfolio is held in conventional assets, such as stocks and bonds.
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