How to Choose A Cryptocurrency IRA

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Contributor, Benzinga
November 10, 2022

Cryptocurrency IRAs offer investors the opportunity to explore previously uncharted retirement investments. An individual retirement account (IRA) allows people to invest for retirement while obtaining tax benefits. Crypto IRA companies help individuals use tax-advantaged accounts to invest in a wide range of cryptocurrencies that align with their level of risk tolerance. For people interested in new retirement investment tools, adding cryptocurrency to an already growing portfolio can prove an enticing opportunity.

What is a Cryptocurrency IRA?

A cryptocurrency IRA is a type of independent retirement account that’s self-directed. A self-directed individual retirement account (SDIRA) lets you hold nontraditional investments such as cryptocurrency. A key benefit of a cryptocurrency IRA is that individuals can select the type of account. 

Cryptocurrency SDIRAs can be set up as traditional or Roth accounts. While Roth IRAs are funded with after-tax dollars, traditional accounts use before-tax dollars. According to the Internal Revenue Service (IRS), individuals younger than 50 can contribute a maximum of $6,000 on an annual basis in 2022. However, cryptocurrency IRAs may be subject to evolving policies regarding the virtual currency market. 

Buying, selling and trading cryptocurrencies like Bitcoin and Ethereum in a tax-advantaged retirement account has never been easier. Most crypto IRAs will allow you to invest in other alternative assets as well as crypto such as real estate and precious metals.

How Crypto IRA Companies Work

People can create a cryptocurrency IRA using a crypto IRA company such as Bitcoin IRA. Bitcoin IRA was the first platform to allow individuals to self-trade cryptocurrencies and remains one of the most competitive platforms in the industry. A crypto IRA company primarily allows people to self-trade various cryptocurrencies that are typically not available in more conventional IRAs.

What to Look For in a Cryptocurrency IRA

When researching cryptocurrency IRAs, consider how long it takes to create an account, potential account fees, educational resources, available cryptocurrencies and general platform security. Remember that trading in cryptocurrency remains highly volatile and consider making it a small portion of your larger portfolio. 

Easy Set Up

Examine the cryptocurrency IRA set up in terms of funding. Certain accounts promote expedited deposits that help you to promptly manage funds and investment opportunities.

Account and Trading Fees

Before opening an account, research potential account charges and trading fees. For example, it’s common for cryptocurrency IRAs to have several charges such as service fees, custodian fees, security fees and transaction fees. Some companies charge flat fees while other fees can be charged as percentages. If unsure about fees, consider reaching out to a representative from the cryptocurrency IRA platform for clarification. 

Educational Resources

It’s common for IRA companies to provide useful educational resources on their websites. For example, Bitcoin IRA dedicates a section of its website to learning. The crypto knowledge center  on the Bitcoin IRA website includes useful articles as well as informative cryptocurrency guides, ebooks, webinars and videos. The educational content informs the public about specific cryptocurrencies as well as the general virtual currency market. In addition to other educational resources, companies often include live charts that update with cryptocurrency prices. When deciding on an account, compare the educational resources in terms of quality as well as variety.

Diverse Crypto Offerings

Crypto platform companies frequently offer a wide range of cryptocurrencies. Check to see if the cryptocurrency that you intend to invest in is carried by the platform prior to opening an account. Platforms often provide easily accessible lists that detail which cryptocurrencies are available for trading. A wide selection of crypto offerings encourages users to diversify their portfolio according to different goals such as minimal risk or aggressive growth. 


When deciding where to open an account, security and safety measures remain notable factors. Strong security is the first line of defense against potential hackers or data leaks. Examine the security measures that a platform offers to keep your crypto IRA safe. Consider the benefits of opening an account with a company that uses strong encryption features and cold storage wallets. A cold storage wallet is a wallet that stores crypto without being linked to the internet. In contrast, some companies use hot storage wallets that are connected to the internet. Research how companies protect your cryptocurrency and weigh the potential benefits and drawbacks of safety features. 

Seamless Experience

Comprehensive platforms help users more easily navigate between likely investments and locate key features. Complicated designs hinder user experience and create delays. When comparing platforms, check customer reviews to find out the level of user satisfaction. Reviews on websites such as Shopper Approved have the potential to provide constructive insight. 


Take protecting your investment a step further by knowing the exact amount that a company or government entity intends to ensure. Some platforms provide insurance against platform bankruptcy or fraud. For example, Bitcoin IRA works with BitGo and Lloyd’s of London to insure some assets up to $700 million. 

Cryptocurrency IRA Offers New Investing Opportunity for the Bold

Selecting the best crypto IRA for your investment goals can positively impact your overall retirement outlook. Before opening an account, research key features such as fees, security, insurance and user experience. Given the volatile nature of cryptocurrency, know your level of risk tolerance before investing. Cryptocurrency can be an excellent choice for bold investors interested in adding a more aggressive asset to their already diversified portfolio. 

Frequently Asked Questions


How should I allocate my crypto portfolio?


Portfolio allocation is a personal choice that’s centered around risk tolerance. Although investing in crypto is volatile, certain cryptocurrencies like Bitcoin and Ethereum have been in existence longer than others and have large market caps. In terms of overall portfolio allocation, some crypto investors choose to allocate less than 10% of a larger investment plan.


How do I diversify my crypto portfolio?


Diversification of a crypto portfolio can be accomplished by examining different factors such as the amount of expected risk, market capitalization and personal goals.


Can you invest in crypto in a SDIRA?


Yes, it is possible to invest in cryptocurrency using a SDIRA. Using a SDIRA will require a few initial steps such as finding the right platform and opening an account.