5 Best Bitcoin & Cryptocurrency IRAs

bitcoin IRA

This guide shows you all the best Bitcoin & cryptocurrency IRA companies on the market in 2021.

We’ve done all the research for you, so if you’re looking to invest your retirement savings into Bitcoin or blockchain, this is the guide for you.

Get tax advantaged Bitcoin with this ultimate guide to Bitcoin IRAs and crypto IRAs.

Read on….


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Top Bitcoin IRAs


Bitcoin IRABitcoin IRA Get Bitcoin IRA

Bitcoin IRA is the more well-known and sleek Bitcoin IRAs out there today.

Bitcoin IRA has processed more than $400 million in client investments and has more than 650 5-star reviews on Google and other rating platforms.

  • Beautiful user interface
  • $100 million in custody insurance
  • Trade assets in the IRA 24/7
  • Supports Bitcoin, Ripple, ETH, Litecoin & more altcoins
  • BitGo handles custody using cold storage

Bitcoin IRAITrust Capital IRA Get an iTrust IRA

ITrust Capital is an IRA custodian based out of Irvine California.

iTrust boasts the only Bitcoin IRA that allows crypto trading 24/7 within their IRA. Asset custody provided by Curv.

  • 24/7 platform trading
  • BTC, Ethereum, LTC, Bitcoin Cash (BCH) & more
  • Ability to acquire precious metals
  • 4.8 stars on Trustpilot out of 180 reviews



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Pros and Cons of Bitcoin IRAs


Pros of Bitcoin IRAs

Bitcoin IRAs & cryptocurrency IRAs have many advantages to consider.

First, many investors consider Bitcoin & digital currency to be a non-correlated asset, good for diversification. This means that when the regular stock market goes down, cryptocurrency is not expected to behave the same way. If this is true, then adding Bitcoin & crypto to your investment portfolio should decrease risk.

Uncorrelated assets help eliminate risk.

Second, if you believe that Bitcoin will increase in value over time, then IRAs are a great way to grow that wealth in a tax advantaged way. You can also rollover your existing IRA into a cryptocurrency IRA.

Finally, IRAs also make gains from crypto far more easy to account for on your tax returns since you either only pay taxes on the money you put in (Roth IRA) or you only pay taxes once when you take the money out (Traditional IRA).

Cons of Bitcoin IRAs & Crypto IRAs

Bitcoin IRAs aren’t all sunshine and rainbows. They come with some disadvantages as well.

First, retirement investments tend to be in safer, more ‘boring’ assets like fortune 500 stocks because they have much less volatility. Staking your retirement on a wildly volatile asset is risky, especially as you get older and near the age of retirement. Even if the investment would eventually pay off, if you start taking payments during a major downturn in the Bitcoin price, it could be bad.

Making risky investments near retirement can prevent you from having the retirement you deserve.

Second, IRAs come with additional fees over simply buying and selling Bitcoins on an exchange. As you may know, fees are a major killer to profit. The Custodian needs to make money too, and all the resources for securing the coins under custody costs a lot of money.

effect of fees on investment over time
Chart courtesy of investor.gov

Finally, when you invest in Bitcoin in a cryptocurrency IRA, you do not get to hold the Bitcoin. There is therefore no way to really know if the custodian is holding the Bitcoin or if he is actually holding it safely. The custodian could get hacked or they could just run away with your money (the latter is unlikely, but possible).


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Alternate Ways to Get Bitcoin


Of course, if you just want to buy Bitcoin or another digital asset, there are better ways to do so than through crypto IRA services.

The best way is to make an account on an exchange and buy it yourself. Then you’d store it on a hardware wallet and make a backup.

hardware wallets banner
Some of our favorite hardware wallets from Ledger and Trezor.

Here are some recommended exchanges:

If you want to find cryptocurrency exchanges that service your country and preferred payment type, use our exchange finder.


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What Are Bitcoin IRAs?


To understand what a Bitcoin IRA is, it’s important to understand what a vanilla IRA is.

‘IRA’ stands for ‘Individual Retirement Account’ (or ‘Arrangement’). According to Fidelity, and IRA is

...an account set up at a financial institution that allows an individual to save for retirement with tax-free growth or on a tax-deferred basis.

Once money is in the IRA, the individual can use the money to make investments in stocks, bonds, or other types of asset class (with certain limitations outlined below). The main benefit is there is no need to pay capital gains.

There are a few different kinds of IRAs worth comparing, but the main ones are known as ‘Traditional’ and ‘Roth’ IRAs.

Traditional IRAs

In a traditional IRA, you can contribute money toward your retirement and you can deduct that money from your anuual tax return. This money grows tax deferred, meaning you don’t not pay any taxes on it until you retire and start pulling from the IRA.

This is good if you anticipate that your income will go down once you retire, allowing you to pay at a lower tax bracket. You are also growing your money on a larger stack of dollars because you didn’t pay any taxes on that money while it was growing.

traditional ira explainer
How taxes work in a traditional IRA

Roth IRAs

Roth IRAs are very similar to traditional IRAs except you pay all your taxes upfront every time you contribute instead of when you retire. Any growth that occurs on the money after the taxes paid at contribution is yours. There are requirements to this tax free growth, so you should be aware of those before deciding.

roth ira explainer
How taxes work in a Roth IRA

How Roth and Traditional IRAs Relate to Bitcoin

You may be wondering what any of this has to do with Bitcoin.

Well, a Bitcoin IRA is just a standard IRA where some of the investments in it are in Bitcoin or other cryptocurrency.

However it’s worth noting: while Roth and Traditional IRAs are common, they aren’t all the same.

The IRS has certain rules that all IRAs must comply with, but the ‘custodians’ that are authorized to offer these IRAs (usually big banks) often have their own restrictions. In most cases, these restrictions include the buying and selling of Bitcoin and cryptocurrencies.

bitcoin restricted
Most IRA account custodians don't allow crypto

So if you want to use your IRA retirement account to buy and hold Bitcoin, you need to find a qualifying IRA custodian that does not have these restrictions.


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Conclusion


These are the best Bitcoin IRAs on the market in 2021.

What makes these custodians great?

So you really can’t go wrong with any of them.

But what do you think? Are we missing a great Bitcoin IRA on this list?

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