Everything You Wanted To Know About Starting A Crypto or Bitcoin IRA
Thinking about adding Bitcoin into your IRA or 401k? It is wise of you to start looking at what options you have available. Creating a strong financial plan allows you to be happy and worry-free throughout your retirement. A few years ago it would be unlikely that you would be looking at Bitcoin as an alternative investment but it’s hard to dismiss the explosive growth the asset has had over the years.
Why consider crypto as an IRA investment?
As the value of these digital assets continue to rise, so does the interest from the IRS in collecting taxes. At the moment, cryptocurrency is recognized as an asset which means depending on how long you hold onto your digital assets will determine what you pay in taxes.
If you believe in the industry and want to see your investment grow long-term and want to be able to cash out without penalties, that includes without paying taxes, then a crypto IRA might be smart for your portfolio diversification.
See the best and most trusted crypto IRA companies and find answers to the most common questions below.
Top 5 Bitcoin and Crypto IRA Companies in 2023
Individual Retirement Account (IRA) is the best way in which investors can provide security to their financial assets. Nevertheless, as global markets’ volatility keeps on increasing, investors need to diversify their IRAs with different assets.
Bitcoin being a digital asset, cryptocurrency IRAs must have specialized management, provide security to clients’ most confidential data and be very knowledgeable about cryptocurrency trading. We compiled a list of various IRAs based on fees, experience, security, and expertise.
Let’s discuss them in detail.
It is one of the largest cryptocurrency firms that allow investors and traders to invest with their retirement accounts. The platform is user-friendly, easy to get started, and provides the best security features, making it the best IRA company overall.
As a new investor, you are required to part with a minimum of $3000 to open a standard account. Moreover, the company is flexible and offers Saver IRA that requires an individual to make an inceptive investment of $100 with a recurring monthly investment of $100 via a linked banked account. The platform support trading of nine different cryptocurrencies, among them Litecoin, Ripple, Stellar, and Ethereum.
Security is also given priority. For example, it offers 256 encrypted SSL trading, provides insurance coverage to its digital assets, and has a separate cold storage account for storing digital assets.
- Easy to get started, set up an account, and start trading
- Insurance coverage of digital assets goes up to $100 million.
- Safe storage for digital assets.
- High maintenance fee
- High set up fee
Minimum opening balance: $3,000
Fees: It costs a one-time fee based on your initial investment plus custodian and security fees to invest in Bitcoin IRA. To get pricing, investors must call
Founded in 2017, BitIRA is considered one of the best platforms that provide its customers with the highest level of security. The platform uses multi-encryption encoding in its system to ensure all transactions are kept safe while an online transactions are being initiated.
Once all the transactions are completed, they are kept safe offline by moving them to physical keys found inside grade five nuclear bunkers protected by security guards and computer security experts 24/7.
To get started on BitIRA, an initial investment of $5000 will be required, and the platform recommends new traders to work with an expert to assist them in opening an account. BitIRA allows investors to trade or invest in six types of cryptocurrencies including Litecoin, Ripple Bitcoin, and Ethereum.
- Digital assets are kept safe in guarded offline storage.
- The firm has fully insured all the digital assets.
- Multi encryption encoding to keep all online transactions safe.
- Must get assistance from digital currency expert to open account.
- Account setup fees
Minimum opening balance: $5,000
Fees: $50 account setup fee, $195 annual maintenance fee, 0.05%/month storage fees.
Established in 2018, the company allows investors to purchase and trade physical gold or cryptocurrencies in real-time through their IRA accounts. ITrustCapital offers its clients with lowest service and trade fees making it one of the best platforms that offer the best rates and fees to its customers.
ITrustCapital allows its customers to trade in Polkadot, Stellar, Ethereum, Litecoin, any time anywhere using their 24/7 transaction service. You’ll be required to pay a minimum of $1000 to start an account and a minimum of $30 to trade. Additionally, the firm allows its customers to diversify the IRA portfolios with other physical assets such as gold at the same fees.
Like other types of IRAs, iTrustCapital also value the security of their digital assets. They have secured their digital assets using institutional grade virtual wallet using multiple authentication methods employed by banks and the military. Furthermore, the firm insurances its digital assets using an insurance policy of $50 million.
- 24/7 trading available. Customers can trade any time anywhere
- Affordable initial investment of $1000
- Low maintenance and administrative cost
- Affordable investing and trading fees of
- A reasonable monthly service fee of $29.95
- Do not provide financial advice to its clients
- No educational tools and resources for its customers
Minimum opening balance: $2,500
Fees: $29.99/month account fee, 1% crypto trade fee, no additional storage fees
Equity Trust Capital
The firm was established in 1974 and ventured into self-directed IRAs (SDIRAs) in 1983. The companies’ vast experience in traditional and alternative investments, zero transaction fees, and personal guidance make it preferred by many investors and traders.
New investors will have to get in touch with a specialized representative to get started with Equity Trust SDIRAs. An initial investment of $10,000 will be required. Once your account is active, customers can trade in eight different cryptocurrencies, including Litecoins, Ripple, and Ethereum, with zero fees and a one-day settlement.
The company values the security of customers’ digital assets and has built within its system six security features: multi-factor authentication, multi-encryption, and secure cold storage. Additionally, the firm offers end-to-end insurance coverage to its digital assets.
Equity Trust Capital also offers new investors and traders with an expert to assist them in managing their accounts as well as provide them with educational resources and tools to make them have a deeper understanding of their investment options.
Even though the fee is not included in the site, our research indicates that the company charge between $205 to 2150 annual maintenance and administrative fee depending on the size of your account, $50 one time set up fee, a monthly platform fee of $20 and a cold storage fee of 0.07% based on the available balance in your account.
- Experienced in self trade IRAs
- Supports both alternative and traditional investments
- Zero transaction fee
- Must get assistance from a skilled representative to get started or open an account
- High maintenance and administration fee
Regal assets are popular among traders and investors because it offers them an opportunity to invest in both hard and digital assets and all the popular available cryptocurrencies.
It was established in 2010, but the firm added cryptocurrency trading to its network in 2017. Even though it deals in precious metals, the company allows its customers to trade and invest in all the popular cryptocurrencies.
An initial investment of $25,000 will be required. As a seasoned trader, you can roll funds over from traditional IRA to trading your assets on the Regal Assets network. Once a customer completes filling out the online application, a team member will get in touch to help in setting up their account. The firm has listed on its website that it supports fourteen cryptocurrencies. But clients are allowed to invest in other cryptocurrencies of their choice using the platform.
Regal Assets charge flat fees on most of its products. For example, it charges annual maintenance and an administrative fee of $100 and an annual storage fee of $150, all of which are waived during the first year.
- Allows trading and investing of popular cryptocurrencies
- Offers up to $250 million insurance on digital assets.
- Flat fee on most of its products
- High initial investment of $250 million
- Need assistance from an expert to open a digital account
What type of IRA account can I roll over into a Bitcoin IRA?
There are a number of companies that allow investors to purchase crypto currencies in an IRA. The problem is, you can’t just open any type of IRA account and roll over your existing retirement money into it.
Although not all IRA accounts are the same, some things remain universal. Your rules will dictate how you buy and sell Bitcoin in your IRA account.
Once you’ve opened up the crypto IRA account, there’s no limit to how much can be deposited. In comparison with stocks and other traditional investments, crypto IRAs carry significantly less restrictions on size and frequency of deposits (if you’re investing through 401k or other employer sponsored plan).
Let’s look at some of the most common questions asked by people who are looking to start a Bitcoin or Alternative crypto IRA.
Common Bitcoin IRA Questions
What is an IRA?
Individual Retirement Account is an additional retirement account different from the company-setup 401(k) retirement account. IRA allows you to invest tax-free or tax-deferred funds until retirement. The reason most people choose to invest into an IRA is mostly for the increased savings by avoiding tax penalties.
What is a Bitcoin IRA?
A Bitcoin IRA works just like a regular IRA, but instead of investing in stocks or other assets, Bitcoin IRAs invest in crypto currencies such as bitcoin (BTC) and ethereum (ETH).
Crypto IRAs are specifically designed to allow investors to take advantage of crypto currencies since they’re sometimes difficult to purchase.
Presently, there are now a few other brokers who specialize in investing retirement funds in cryptocurrencies.
How can I participate in the Bitcoin IRA?
For crypto IRAs, there are a number of crypto currency retirement companies that allow you to rollover your existing IRA into crypto. You must be a resident in the US and have met a specific earned income requirement, according to the SEC.
Best Bitcoin IRA For Investors
When it comes to getting a Bitcoin IRA, you have a couple options for working with reliable companies that have years of experience dealing specifically with crypto IRAs.
Even though cryptocurrency is becoming more mainstream, we aren’t seeing these services offered yet by our local bank branches or financial institutions.
We know that the investors who are looking to start their Bitcoin IRA want to know all their options and choose the best IRA company that provides their clients the ability to diversify their portfolio into other asset classes within the crypto sphere.
What factors do I need to consider before investing in Bitcoin IRA?
Before opening a Bitcoin IRA, be sure to carry out the following:
- Find out more about the type of cryptocurrency you want to invest your IRA funds in
- Make sure your digital currency IRA are compatible and can work together.
- Check out other cryptocurrency companies and get a list of their fees before committing your IRA funds
Penalties for migrating my retirement account to Bitcoin IRA?
There are no penalties for buying Bitcoin with your IRA. IRS ruling accepts cryptocurrencies as assets that can be legally held on the condition that your IRA must be self-directed. Also, tax status on Bitcoin IRA is deferred, which means Tax payment will begin when you are 59 years and six months old.
Crypto IRA Fees
Most crypto IRA companies charge a one-time fee for setting up a Bitcoin IRA for you. This fee covers account opening, funds roll over, exchange fees, and fees charged for securing your funds. The amount charged varies, depending on your chosen Bitcoin IRA custodian.
Aside from the one-time payment for setting up a bitcoin IRA account, other charges you may likely include a flat fee paid monthly or annually.
Can I lend out my cryptocurrency holdings in my IRA account for interest?
Not yet, you cannot lend your cryptocurrency holdings in your IRA account for interest. However, we see companies are working on partnering with other stakeholders like Genesis trading to lend and trade with client’s cryptocurrency and fiat money holdings with interest.
Can I purchase other cryptocurrencies with my Bitcoin IRA?
With your Bitcoin IRA, you can invest in other cryptocurrencies like Ethereum, Bitcoin Cash, Ripple, Litecoin, Stellar Lumens, ZCash, Ethereum Classic, etc. aside Bitcoin. You can choose to invest in one or more types of cryptocurrencies.
Can I withdraw from my Bitcoin IRA?
Yes, you can withdraw from your Bitcoin IRA only when you clock 59 years and 6 months old. Withdrawing from your Bitcoin IRA before getting to 59.5 years will attract early withdrawal penalties similar to other IRAs. However, you can sell your funds to reinvest in different types of IRA.
How long does it take to open a Bitcoin IRA account?
You can open a Bitcoin IRA account within a day. Rolling over your IRA account can last from a few days to about three weeks, depending on how cordial or compatible your cryptocurrency IRA company is with your financial institution.
Are my cryptocurrencies secure?
A crypto IRA is a great investment for anyone who wants to invest in crypto currencies. You can open a crypto IRA with the crypto-friendly investment providers mentioned above. This way you don’t have to worry about security and finding the crypto currency sellers that are safe to buy from.
The crypto IRA providers are more knowledgeable about crypto currencies and can help you find the most appropriate crypto currency to allocate for your investment based on your portfolio.
With most IRA companies we reviewed, we found cryptocurrency holdings in your crypto IRA account are safe and insured against all types of internal hack and frauds by the Consumer Protection Insurance policy to the tune of a million dollars.
What precautions can I take to keep my cryptocurrencies secure?
Presently, there are several technologies deployed to keep your cryptocurrencies safe. The best way of keeping your cryptocurrency safe is by transferring your cryptocurrency holdings to cold storage. Cold storage is a way of storing your cryptocurrency offline out of hackers’ reach. It involves storing your cryptocurrency holdings on flash drives, disks, and other digital means.
Can I transfer cryptocurrencies from my wallet into my Bitcoin IRA?
Presently, you cannot fund Bitcoin IRA with Bitcoin or other cryptocurrencies from your cryptocurrency wallets. IRS requires that Bitcoin IRA or other cryptocurrency-based IRA be funded with US dollars.
What are the benefits of holding a Bitcoin IRA?
The benefits of holding a bitcoin IRA include the following
- High investment yield. Cryptocurrencies are known to have more than a thousand percent increase in value. The value of Bitcoin once rose from about $12 in its early days to an all-high value of $20,000 in December 2017 and in 2021 hit a high of $60,000..
- Tax-free. Like other IRA accounts, Bitcoin IRA accounts are tax-deferred until you’re ready for withdrawal.
- Secure transactions: transactions involving cryptocurrencies are secured with multiple security features and protected by the peer-to-peer blockchain network.
- Diversification of funds. With your Bitcoin IRA, you can diversify your investment to cover other types of cryptocurrencies, stocks, and mutual funds.
- Inflation proof. Cryptocurrencies are designed to resist inflationary tendencies of fiat currencies
- Safe from bank manipulations. Banking institutions do not have access to your Bitcoin IRA account. Thus, your Bitcoin IRA account is immune to bank cuts.
How do I invest in Bitcoin IRA?
- Choose a cryptocurrency broker after conducting due diligence on several bitcoin brokers
- Choose IRA custodian if you do not have an IRA or your cryptocurrency broker does not give you a suggestion of any IRA custodian.
- Place an order through your cryptocurrency broker, who now takes over the process of rolling over your IRA account to your Bitcoin IRA.
In conclusion, we cannot give you advice on whether or not you should start a Bitcoin IRA. We do think it’s smart of you to do your research and see if a crypto IRA works for your portfolio.
If you still aren’t sure, download this free crypto IRA report and even talk to an expert.
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