Individual Retirement Accounts (IRA) — both Traditional IRA and Roth IRA retirement savings accounts — have limitations as to what you can put in them. You can place stocks, bonds, and even ETFs in traditional accounts. But, you can’t diversify with digital currency such as Bitcoin or the like. With the rising interest in cryptocurrencies in recent years, there has also been a rising interest in tax-advantaged cryptocurrency IRA options.

Thanks to the emergence of “self-directed” IRAs, you are able to put other securities/assets into a tax-sheltered IRA. This includes C-corps, real estate, and other physical assets like gold or precious metals. We’ve worked with these types of accounts in the past and we rarely recommend them as they can be quite expensive. 

Now, there is another, newer option for folks with cryptocurrency, which allows consumers to create an IRA account strictly for cryptocurrencies. There are several different options that will allow you to open up a new investment account in the same way that you would open a checking account. Most of these are quite easy to open, fund, and manage, though few are relatively inexpensive.

They are still subject to tax laws. Just like traditional retirement savings accounts, you can choose between an IRA or a Roth IRA. Remember: you’ll get a tax deduction with an IRA, and there’s no tax on your gains when you sell if you opt for a Roth IRA (read more here).

Up until recently, these accounts were still prohibitively expensive. Now, there are several companies out there that are relatively affordable and easy to use. We have experience with iTrust Capital and BitcoinIRA and have confirmed relative ease of use and straightforward fees. Let’s take a look at these tax-advantaged cryptocurrency IRA options.

iTrust Capital

iTrust Capital could be a solid choice for investors who are just starting out. It could also work well for those who have a bit more experience. It allows you to buy and trade cryptocurrencies via your retirement accounts. We recommend the service (and use it ourselves!) because the company is affordable, and transparent about its fees. You’ll also have access to its expert consultants. You can open an IRA or a Roth IRA with iTrust.

Lots of these types of companies will charge you high fees on every single trade, which can get expensive. iTrust Captial charges just 1% on each transaction. That means if you buy $6,000 worth of cryptocurrency and you place it in your account, they only charge you $60. There is no monthly fee, initial purchase fee, or broker fees. While this is expensive relative to investment accounts like Schwab, eTrade, and Fidelity, we believe it is the cheapest option available for most crypto owners. This is especially true if you are planning on simply hodling buying and holding. 

You only need $1,000 minimum to set up an account, which is low when compared to industry standards. When you sign up, you’ll also get a $100 reward when you start funding your account. You’ll enjoy 24/7 trading too. If you want to trade gold and silver, you can do so with iTrust Capital as well.

The only caveat we found with iTrust Capital is that in 2021, the company partnered with Coinbase Custody to secure its digital assets. Some people believe that it’s now simply a wrapper for Coinbase. In other words, you’ll be using the Coinbase platform but with iTrust as the front end. It’s something worth noting if you prefer possession and specific security around your coin’s secret keys as well as the ability to stake and perform other applications on the blockchain.

BitcoinIRA

BitcoinIRA is another popular and highly rated cryptocurrency IRA option. It also offers 24/7 trading and storage for your digital assets, and it is a very secure platform. 

Account setup is easy and straightforward. You’ll be able to sign up and get started in just a few minutes. Once your crypto hits your account, you’ll be able to start buying, selling, and trading within three to five days. Their security features are military-grade and the company boasts up to $700 million of insurance protection. 

The main difference between iTrust Capital and BitcoinIRA is the high setup and maintenance fees. This includes custodian and security fees, and a one-time service fee. The company isn’t very transparent about the cost of these fees. You need to get in touch with a customer service rep to get the exact numbers.

You’ll need at least $3,000 to set up an account. There is also another account that they call a “Saver IRA” that requires a $100 initial deposit. That said, you’ll need to invest an additional $100 every month to keep it open. BitcoinIRA offers IRAs, Roth IRAs, and 401(k)s as well.

Summing it all up

The companies above are best suited for folks who have investments of under $100,000. If you have hundreds of thousands in cryptocurrency and are interested in doing more complicated things like staking, you may want to consider some other options. We’d be happy to assist in helping you find one that works best for you.

iTrust Capital and BitcoinIRA are two excellent options for those of you who want to put your cryptocurrency into a tax-advantaged IRA or Roth IRA. Get in touch if you need help setting up an account. We can also help if you’re interested in learning more about how you can get your cryptocurrency to work for you.

Photo by Austin Distel on Unsplash