Contributor, Benzinga
May 17, 2022
verified by Ryan McNamara

Did you know most of our readers prefer iTrust Capital for their cryptocurrency IRA needs? Check them out now!

For individuals looking to build their crypto wealth, a crypto IRA may be a good way to do so. Cryptocurrency IRAs allow you to avoid capital gains tax, so long as you keep your investments in your IRA account. Although cryptocurrencies are volatile investments, the asset class has outperformed almost any other investment over the last decade. If you're a long term believer in a decentralized future, you may want to consider opening an investment retirement account with a platform that gives you access to cryptocurrency.

Quick Look: The Best Crypto IRAs

Best Cryptocurrency IRAs

Now that you know the general rules and limitations of the cryptocurrency IRA, let’s take a look at the best of the breed. There are several options on the market which you can compare –– these platforms typically have higher fees than regular crypto exchanges, but the tax benefits make the tradeoff well worth it.

1. iTrustCapital

iTrustCapital is the leading digital asset IRA trading platform that allows you to directly buy and trade cryptocurrencies and physical gold in real-time through their retirement accounts.

They have completely transparent pricing with crypto being a 1% trade fee and gold $50 over spot. They also provide the following:

  • IRA setup at iTrust Custodial Services
  • Facilitation of any transfers to your IRA
  • IRS and tax reports by iTrust Custodial Services
  • Unlimited storage with institutional custody partners
  • Platform support and maintenance
  • iTrustCapital
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    Pricing
    1% fee
    Account Minimum
    $1,000
    securely through iTrustCapital's website
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2. Broad Financial

Broad Financial is a flexible platform that allows you to self-direct your IRA on the trajectory that you prefer. This crypto IRA trust has flat fees—there are no asset-based fees or transaction fees. You have an unlimited selection of tokens to invest in, and you can choose any exchange you like to make these trades.

The fee structure features:

  • $1195 one-time setup fee
  • $100 one-time custodian setup fee
  • $380 annual maintenance fee (payable in $95 quarterly installments)
  • Free lifetime customer support
  • Tax-advantaged accounts

A significant advantage that helps Broad Financial stand out from the crowd is that you can hold your private keys. When you can hold your private keys, you gain certain benefits that the competition cannot provide, like:

  • Choosing the storage format you prefer
  • Using an existing wallet
  • Customizing your security for your own peace of mind

You can also invest in:

  • Real estate
  • Private loans
  • Precious metals
  • Small businesses, etc.

With this level of flexibility, you can move your retirement funds to the places you prefer, saving you both time and energy while increasing your net worth.

  • Broad Financial
    Best For
    Alternative Asset Expertise
    Overall Rating
    securely through Broad Financial's website

3. My Digital Money

My Digital Money is a U.S.-based crypto trading platform that partners with My Equity Trust to provide self-directed crypto IRA products. With a one-time setup fee of $50, you can invest with your IRA funds and earn tax-free or tax-advantaged profits that bolster your retirement portfolio.

You can open a range of IRA accounts, including:

  • Simple IRA
  • Traditional IRA
  • Roth IRA
  • Simplified Employee Pension Plan (SEP) IRA

Set up a cash account to start trading and then the MDM platform allows you to trade away from the prevailing markets, reducing risk and helping you purchase at the best price possible. You can also use limit orders that buy or sell at specific prices or after certain price changes.

You have complete control of your IRA funds, and you can always trade crypto independent of your IRA on the same platform, if you so choose.

  • My Digital Money
    More Details
    Best For
    Crypto IRA Investors
    Overall Rating
    Read Review
    securely through My Digital Money's website
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4. Bitcoin IRA

Bitcoin IRA is a full-service solution that allows you to invest in bitcoin, ethereum, ripple, litecoin, bitcoin cash and ethereum classic with your IRA. The firm works to make the complex process of crypto investing simpler and safer.

Your digital assets are stored and insured for up to $100 million with BitGo Trust, which is powered by BitGo Inc.’s technology. BitGo Inc. is the world’s largest processor of on-chain bitcoin transactions, processing 20% of all global Bitcoin transactions and holding over $2 billion in assets in wallet.

Whether you need help with a rollover, traditional or Roth IRA—it only takes a few minutes to open an account with Bitcoin IRA.

  • bitcoinIRA
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    Pricing
    1 time investment fee depends on acct
    Account Minimum
    $3,000
    securely through bitcoinIRA's website
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5. BitIRA

Most crypto IRA companies take no responsibility for the security of your crypto. BitIRA turns this trend on its head and offers end-to-end insurance for your account.

You also get true cold storage for your crypto — it's kept on a hard drive in a vault that is physically guarded around the clock. You get this protection along with praiseworthy customer service that will make you feel comfortable even if you have never invested in crypto before.

The selection of cryptocurrencies currently available with BitIRA includes Bitcoin, Bitcoin Cash, Litecoin, Ethereum Classic, Ethereum and Ripple.

  • BitIRA
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    Pricing
    $300-$1,000 /year (depending on the amount in the account)
    Account Minimum
    $20,000
    securely through BitIRA's website
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How Crypto IRAs Work

A crypto IRA falls under the umbrella of self-directed IRAs. Crypto’s volatility and looser regulatory structure likely scare investment custodians away from accepting responsibility for consistent returns.

Most financial institutions brand their crypto IRAs with the bitcoin name because of bitcoin’s popularity. There are IRA investment opportunities available in other major coins including Ether, Litecoin, XRP and bitcoin cash. They usually have higher fees associated with them than traditional IRAs, but it may be well worth it to avoid capital gains taxes.

The average crypto IRA will have a holding fee, minimum monthly account fee, establishment fee and fees for purchasing assets and fund transfers. Traditional IRA accounts generally do not have any establishment or monthly maintenance fees.

Within an IRA designation, cryptocurrency accounts are automatically subjected to regulations they would otherwise avoid. IRA contribution limits apply to crypto IRAs as well, for example. Investors are also required to purchase the cryptocurrencies in an IRA from a designated firm. These firms use their monopoly to charge fees for their involvement.

Additionally, crypto IRAs can only be traded during standard market hours. The crypto market is 24/7/365, so the value of an IRA can change significantly over a weekend while leaving the investor with no recourse. Crypto within an IRA account is subject to capital gains taxes as well.

Benefits of Crypto IRAs

Cryptocurrency IRAs incentive investors to hold cryptocurrency over the long-term. If digital assets continue to see similar levels of adoption, then holding crypto for the long-term may be a great investment strategy that could outperform traditional assets. Plus, crypto IRAs have several tax benefits over investing through a cryptocurrency brokerage or exchange. Given the potential for abnormally high returns, these tax savings make it well worth it to invest in digital assets through a crypto IRA.

Trade Cryptocurrency

If you want to trade crypto while holding your IRA, you need a good trading platform. Some things to consider when choosing where to trade crypto are the platform's security, altcoin offerings and customer support. Some platforms, like Gemini, allow you to earn interest on your digital assets. This is a great way to accumulate more cryptocurrency over time without needing to invest more into your trading account. Here are a few of the best to consider:

  • Gemini Crypto
    More Details
    Best For
    New Investors
    Overall Rating
    Read Review
    securely through Gemini Crypto's website
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  • eToro
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    Best For
    Copy Trading
    Overall Rating
    Read Review
    securely through eToro's website
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    This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) and USA (by eToro USA LLC); which is highly volatile, unregulated in most EU countries, no EU protections and not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.

  • Webull Crypto
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    Best For
    Low Minimums
    Overall Rating
    Read Review
    securely through Webull Crypto's website
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Can You Buy Crypto In a Roth IRA?

Unfortunately, if you already have a Roth IRA, it's unlikely that you'll be able to buy bitcoin or cryptocurrencies with it. Most investment retirement accounts for cryptocurrencies are self-directed, and you'll likely need to open a new IRA account specifically for cryptocurrency investing, as most traditional IRAs don't support cryptocurrency. Alternatively, you may want to wait until cryptocurrencies are added to traditional Roth IRAs. However, this may be far in the future and Bitcoin may be much more expensive by the time this happens.

Retiring off Cryptocurrency

If you are looking for a way to inject growth potential into a long-term portfolio, holding a crypto IRA is a viable option. Crypto may also be a good last-minute hedge against inflation or low-interest rates for older people who are about to retire. However, remember that cryptocurrencies are inherently volatile, so if you're looking to preserve wealth (as opposed to growing wealth), you should consider a traditional retirement account. While it may be good to have some exposure to crypto as a retiree, it certainly shouldn't be your only investment.

It may be a bit premature to put everything into crypto even under the tax haven of the IRA. However, it may also be time to take a serious look at how this market can make your golden years even more fruitful.

Frequently Asked Questions

Q
Can you put bitcoin in an IRA?
A

Absolutely. Through a crypto IRA company, you can hold Bitcoin and many other major cryptocurrencies in an IRA account. This account is subject to the same rules and has the same advantages of an IRA that holds fiat currency.

Q
Is a bitcoin IRA Safe?
A

Holding crypto always comes with an added degree of risk. Reputable crypto IRA companies partner with a professional custodian for added security, but most of them assume no primary legal responsibility for your holdings.

Continue reading: BEST RETIREMENT ACCOUNTS

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