Make Bitcoin the Workhorse of Your IRA
Do you want to capitalize on the growth potential and freedom that cryptocurrency offers—on a tax-deferred basis? If so, a Digital IRA could be an excellent option for you.
One of the best ways to reap the benefits that digital currencies can offer is to hold them in a Bitcoin IRA.
Whether you call it a Digital IRA, Cryptocurrency IRA, or Bitcoin IRA, the step you’re taking toward retirement savings is the same: you are buying cryptocurrency within a self-directed individual retirement account (SDIRA).
Let’s compare these SDIRAs to conventional IRAs, look at your IRA investment options, and even review some of the terms related to Bitcoin IRAs.
Bitcoin in a Self-Directed IRA
Although an SDIRA can serve all the functions of a conventional retirement account, there are key differences that set this family of retirement accounts apart and make it a powerful tool to leverage in diversifying your retirement savings portfolio.
Self-Directed IRA Accounts: You Choose It. You Buy It. You Manage It.
Most people don’t know about self-directed IRAs (SDIRAs), and so the concept of using them in retirement savings might be unfamiliar.
An SDIRA permits types of assets—like cryptocurrency–that most conventional retirement accounts cannot include. Conventional IRAs are far more limited, usually allowing for mutual funds, stocks, bonds, and cash, at the discretion of the financial institution managing them.
Unlike investments in conventional retirement accounts that are overseen by brokerages and financiers, in an SDIRA you maintain complete control over the investment vehicles in which your retirement savings are stored.
While a Bitcoin IRA is an SDIRA containing cryptocurrency, using a Bitcoin IRA does not limit your investment choices strictly to digital assets. Instead, the self-directed structure of this retirement account gives investors the widest range of asset options. Pick from the same asset options as conventional retirement accounts (such as stocks or mutual funds) as well as alternative assets such as digital currencies.
As a self-directed investor, you accept responsibility for the investment choices in your account. But, you engage in the cryptocurrency market by working with BitIRA to buy individual cryptocurrency assets, with your Digital Currency Specialist helping you navigate the set-up of your account. In other words, you choose, invest in and manage each asset in your account.
Although you are in charge, when you purchase digital currencies for your IRA, you work with respected partners in BitIRA and Equity Trust Company (ETC) or Preferred Trust Company (PTC), both certified self-directed IRA custodians who are leaders in their industry.
By opening an account with ETC or PTC, you can rest assured that they will provide all of the administrative services for your account, including making any required financial disclosures. Once your account is open, your transactions will be conducted through our exchange partner, Galaxy Digital. This is the real-time, over-the-counter trading platform engineered for a web3 world. Galaxy is the most advanced digital asset trade and liquidity company on the planet, and are a trusted, reliable company. This combined with our security partner, Fireblocks, ensures that BitIRA customers are protected end-to-end.
As a self-directed investor, you accept responsibility for the investment choices in your account. But, you engage in the cryptocurrency market by working with BitIRA to buy individual cryptocurrency assets, with your Digital Currency Specialist helping you navigate the set-up of your account. In other words, you choose, invest in and manage each asset in your account.
Although you are in charge, when you purchase digital currencies for your IRA, you work with respected partners in BitIRA and Equity Trust Company (ETC) or Preferred Trust Company (PTC), both certified self-directed IRA custodians who are leaders in their industry.
By opening an account with ETC or PTC, you can rest assured that they will provide all of the administrative services for your account, including making any required financial disclosures. Once your account is open, your transactions will be conducted through our exchange partner, Galaxy Digital. This is the real-time, over-the-counter trading platform engineered for a web3 world. Galaxy is the most advanced digital asset trade and liquidity company on the planet, and are a trusted, reliable company. This combined with our security partner, Fireblocks, ensures that BitIRA customers are protected end-to-end.
Your IRA Investment Options
In 2014, the IRS ruled that digital currencies should be treated as personal property for tax purposes. This makes digital currencies eligible for Digital IRA accounts.
Here is an overview of the tax implications when purchasing bitcoin and other cryptocurrencies within an IRA:
In addition, by assuming full responsibility for your investment choices, the IRS grants you legal authority to invest in a broad range of alternative assets that goes well beyond digital currencies.
Under current law, you can build your IRA by choosing:
The type of IRA you want
A Bitcoin IRA can be set up with any of the classifications that you are used to, such as Traditional, SEP, SIMPLE and Roth IRA accounts.
Cryptocurrency assets
These include: Bitcoin, Bitcoin Cash, Ethereum, Ripple (XRP), Litecoin, Chainlink, Solana, Stellar Lumens, Aave, Basic Attention Token (BAT), The Graph (GRT), Livepeer (LPT), Maker (MKR), yearn.finance (YFI), Dai (DAI) and Uniswap (UNI)
Conventional IRA assets
Such as individual stocks and mutual funds.
A wide variety of other alternative assets
such as precious metals, tax liens, and real estate in commercial, residential, or raw land.
You can add these conventional and alternative assets to a single IRA.
Opening a Digital IRA with BitIRA
With BitIRA, you gain access to an easy way to start and maintain a self-directed retirement account that includes individual digital assets.
Partners in Process
It’s our mission to give you all the information you need to make this move with confidence. When you’re ready, we’re here to facilitate the entire process, before and after your purchase. Our services include:
- Explaining your investment asset options.
- Helping you to complete the paperwork.
- Overseeing rollovers.
- Assisting with contributions and distributions.
- Offering ongoing support.
Easy Account Rollovers
By working with us, it’s easy to roll over conventional assets to a new or existing Digital IRA. Our services include facilitating transfers or rollovers of assets from accounts such as the following, penalty-free and without taking distributions:
- Traditional or Roth IRA
- 401(k)
- 403(b)
- Thrift Savings Plan (TSP)
- 457
Some of these accounts have eligibility requirements before they can be transferred to a Digital IRA. Contact a BitIRA Digital Currency Specialist to determine if your current account qualifies for a rollover.
With BitIRA, you can also exchange one form of cryptocurrency into another.
Leaders in Cryptocurrency Security
We’ve made securing our customers’ investments our #1 priority.
All cryptocurrency investors must use a digital wallet. Many of these wallets are “hot” (connected to the Internet), which exposes investor credentials to potential hackers.
We give our customers a unique advantage: a multi-signature authentication storage solution that they can trust. This eliminates the single point of compromise. No transaction can occur without approval from multiple devices.
See how BitIRA compares to the competition.
Discover the Opportunities of Cryptocurrency Investments
Our Digital IRA service is a full-service solution, designed to make your long-term investment secure.
Speak directly with a Digital Currency Specialist to get an in-depth explanation of the investment process. Or, ask any questions you may have and discover the opportunities currently available.
Learn how you can start receiving the benefits of a Digital IRA.
Contact BitIRA at (800) 299-1567 today.
Digital IRA Terms
Here is a brief glossary of terms related to Digital IRAs:
Bitcoin
A type of cryptocurrency (see below for a definition of “cryptocurrencies”). In terms of demand, Bitcoin is the largest cryptocurrency in use, with a capital value of over 30 times that of Ethereum, its nearest competitor.
Learn more: Many people start with a Bitcoin IRA, since it’s what they’re most familiar with.
Bitcoin IRA tax deferral
As long as you hold your digital currency in an IRA, taxes on earnings are delayed until you take a distribution. The only exception is a Roth account, where instead of paying taxes at distribution, you pay them at contribution. With all IRAs, you enjoy tax-free growth on your investments.
Learn more: We’ve got a tax guide to get you started on the ins & outs of crypto taxes, as well as a Q&A with tax experts.
Blockchain technology
Blockchain is the means of transferring, authorizing and documenting the exchange of Bitcoin and other cryptocurrencies. It creates a secure, efficient and tamper-proof log of activity. If you look down at our definition of “cryptocurrency,” the code to which we’re referring (to secure transactions, maintain a ledger of ownership, and control production of new currency units) is based around blockchain.
In the case of a Digital IRA, blockchain logs money transfers to digital wallets that will be used for an investor’s IRA.
Learn more: Understanding how blockchain comes together with mining and wallets will help you understand the technology behind cryptocurrency.
Cold storage
In the cryptocurrency world, cold storage (also known as a “cold wallet”) is a security precaution that involves keeping a reserve of digital currencies offline. Cold storage methods include keeping coins on a flash (USB) drive or other digital data storage device in a safe place, such as a safe deposit box.
Learn more: Compare how much you can trust hot vs. cold storage solutions.
Cryptocurrency exchange
When buying cryptocurrency, you need a marketplace where you can buy, sell, and trade it. When you work with us to set up a Digital IRA, we handle all interactions with the exchange for you.
Cryptocurrency
A type of currency that is internet-based and uses code to secure and verify transactions, as well as to control the production of additional units of itself.
A really oversimplified version of this is to think about crypto like if the dollar existed in code instead of in physical paper, and used its code to keep track of who’s owned it; and, if new dollars could only be made once the code saw that a sequence of steps were completed.
Learn more: Discover more about the leading types of cryptocurrencies.
Digital currency
This virtual currency, an Internet-based medium of exchange, is different than physical banknotes and coins. It exhibits properties similar to physical currencies but enables instant transactions and borderless transfer of ownership. People often use this term interchangeably with “cryptocurrency.”
Learn more: An easy-to-digest primer on the technology behind digital currencies.
Digital IRA
The name of our digital currency retirement account service. Like other Bitcoin IRAs, it uses financial digital currencies within a retirement account.
Learn more: What are the steps to set up a Digital IRA?
Hard cap
Just as professional sports leagues have salary caps, many cryptocurrencies have a cap or limit on coin supply. This hard cap — a limit of 21 million for Bitcoin, as an example — is the maximum supply, which cannot be changed. This limit plays a large part in a cryptocurrency value.
Wallet
Also known as a cryptocurrency wallet or a digital wallet, this software stores private and public keys, interacts with various blockchain technology and enables users to send and receive digital currency and monitor their balances. If you use a cryptocurrency, you must have a digital wallet.
Learn more: Depending on how much security you need, you’ve got options for your crypto wallet.