Bitcoin IRA Review: How to Invest in Crypto and Gold (2023)
With both gold IRA companies and crypto exchanges being platforms for investing, you might not know that combining the two to get a healthy return on your investment is possible.
While the right investment will lead to great returns, the wrong one could result in devastating losses.
The right investment also depends on your goals, time frame, and risk tolerance, so doing your due diligence before investing in anything is essential.
In this guide, I’ll review Bitcoin IRA, a company that allows you to invest in cryptocurrencies like Bitcoin and Ethereum with your individual retirement account.
Let’s get right into it.
Bitcoin IRA Overview
Bitcoin IRA is an excellent service for those looking for a platform that makes it a priority to protect and insure one’s funds.
In addition to this production, trading on the platform is available on a 24/7 basis so that you can perform the required transactions at any given point.
With cold storage, the security of the customer’s digital assets is always given paramount importance.
When it comes to retirement accounts, Bitcoin IRA is one of the biggest and most popular companies.
Since its inception in 2016, Bitcoin IRA has helped thousands of customers invest in cryptocurrencies like Bitcoin, Ethereum, Litecoin, and others.
The process of investing using Bitcoin IRA can be set up in just a few minutes.
Then, as soon as funds are added to your account, it takes at most five days until everything clears and you can start transacting.
Once the approval process is complete, you’re ready to start buying crypto.
One factor that some people do not like about Bitcoin IRA is that one requires at least $3,000 to open an account.
This is not a big issue since retirement accounts typically have a higher starting balance.
That said, Bitcoin IRA also offers a saver IRA account, where one can start investing with only a $100 deposit and then follow it up with an investment of $100 each month.
This means that even those with a tight budget can take advantage of this service.
The Benefits Of Bitcoin IRA
There are various benefits to consider when using Bitcoin IRA.
Tax-Free Crypto Investing
A self-directed IRA allows for tax-deferred or even tax-free growth. Any gains you make on your investments will not be taxed until you withdraw them from your account (usually at retirement).
This is a massive benefit if you’re looking to invest in something with high potential for growth, like cryptocurrencies.
The only thing to note is that you may be subject to a penalty if you withdraw your funds before you retire.
However, this is not something that many people involved in the crypto IRA space are worried about, as most people looking to invest in cryptocurrencies are doing so with a long-term view.
Low-Cost Gold Investing
Bitcoin IRA companies typically offer various assets to invest in, including stocks, bonds, ETFs, gold, and cryptocurrencies.
A significant factor to consider when it comes to Bitcoin IRAs is that investing in gold follows the same process as investing in crypto.
With high-end security and protection, one can invest confidently, knowing that their investment is well protected.
Investing in gold with Bitcoin IRA is also a process that eliminates the traditional costs of buying physical gold.
Considering buying alternative assets that include precious metals is a strategy that many with an individual retirement account consider in this day and age, and Bitcoin IRA makes this easy to execute.
Earn Interest
Did you know that you could earn interest on your IRA account balance?
With Bitcoin IRA, you can.
The following rates apply at the time of writing:
- Cash: 6% APY
- BTC: 2.0% APY
- Ethereum: 2.0% APY
While a few conditions must be satisfied for the interest rate to apply, this is typically worth it for most people.
Even if you don’t have a large sum of money to invest, the interest you earn can add up over time.
Diversity And Versatility
We’ve all heard the term “don’t put all your eggs in one basket.”
When it comes to retirement planning, this couldn’t be more true.
Investing in a diverse range of assets is one of the best ways to protect your nest egg and prepare you for whatever life throws your way.
This is where Bitcoin IRA shines.
As mentioned earlier, Bitcoin IRA offers a wide range of assets to invest in.
Investing in cryptocurrencies through this platform allows you to get the best of both worlds: the growth potential of crypto with the security and tax benefits of an IRA.
What Could Be Improved
As with all products and services, nothing is perfect.
While I believe that Bitcoin IRA is an excellent option for those looking to invest in digital currencies, there are a few areas that one could improve.
Trading Fees
There are several fees to consider when investing with Bitcoin IRA:
- a custodian fee
- a security fee
- and a one-time setup fee
The actual numbers aren’t openly available on their website, so you must contact them directly to get a quote.
You will have to pay no transaction fees when you make your first initial investment and for other trades after that.
There also doesn’t seem to be any mention of a maintenance fee or even a monthly fee.
This is great to know, as typically, these fees add up.
Can’t Use Crypto To Buy Into IRA
While this is not Bitcoin IRA specific, it is essential to consider it before investing in cryptocurrency IRAs.
IRS regulations state that you cannot use cryptocurrencies and transfer them into your IRA directly.
Instead, you must use a cryptocurrency exchange to convert your crypto into U.S. dollars and then use those dollars to buy assets in your IRA.
This process can be complicated for those unfamiliar with it, so it’s something to keep in mind.
Limited Liquidity
Another thing to consider is the liquidity of your investment.
While you can cash out your investment at any time, the variation in the value of Bitcoin and other cryptocurrencies can make this a bit of a gamble.
If you plan on cashing out your investment soon after making it, this might not be the best option.
Traditional IRA accounts hold much more stable and predictable investments, so if you need immediate access to your money, then these might be a better option.
In addition to all this, there are also the fees and penalties that you have to consider if you withdraw funds before the allotted retirement period.
The Crypto Selection
While the range of cryptocurrency coins on offer is more than enough for most people, some investors may be looking for a specific currency that is not available.
At the time of writing, there are as many as 60+ different cryptocurrencies to invest in.
These include Bitcoin, Ethereum, Ethereum Classic, Bitcoin Cash, Stellar Lumens, Cardano and more.
While this is a great selection, if you are an investor looking for a specific coin that you cannot find here, this could be a deal-breaker.
The option to invest in gold is a plus to consider since many trading platforms do not offer this combination of assets.
Bitcoin IRA: How Investing Works
Bitcoin IRA is a company that lets you use your Roth IRA or traditional IRA to invest in cryptocurrencies.
This is a great way to get the best of both worlds: the growth potential of crypto with the security and tax benefits of an IRA.
While it’s not a digital wallet where you can store your Bitcoin, Bitcoin IRA offers an account that lets you manage your investments and access them easily.
Using currently existing IRA, 401(k), or 403(b) funds, you can roll over a portion (or entire) account into USD and then use that to buy Bitcoin and other cryptocurrencies.
Bitcoin IRA comes into the process by doing the rollover on your part and getting everything ready in (a maximum of) five days to start trading on the digital assets in your account.
Since this is a self-directed IRA account, you won’t have to pay specific capital gains or dividend taxes.
The ability to only execute the trades you want, swap between assets, and be responsible for the amount of risk you’re comfortable with makes this an attractive investment for many.
The Steps For A Bitcoin IRA Rollover
These are the steps you need to follow to rollover your retirement account into a Bitcoin IRA account:
- Step 1: Set up an account with Bitcoin IRA.
- Step 2: Contact your current retirement account provider and let them know that you want to roll over your account into a Bitcoin IRA.
- Step 3: Bitcoin IRA will then facilitate the transfer of funds from your current IRA provider into a self-directed IRA that they hold for you.
- Step 4: The money will be moved into the account holder’s bank account from the existing retirement account.
- Step 5: The holder then has 60 days to roll the money into a new retirement account.
- Step 6: You can then use that money to buy cryptocurrency IRA within the account. As a platform, BitcoinIRA helps to make self-directed investing in cryptocurrency easy and accessible to anyone.
It’s good to note that at least 365 days must pass before you can roll over your account again.
Bitcoin IRA Safety
Safety is one key factor that everyone looks for when choosing an investment platform.
After all, you’re trusting them with your money.
BitcoinIRA has several safety features to protect your account and cryptocurrency investments.
Assets are insured for up to $700 million, which means that if the platform is ever hacked or goes bankrupt, you will still get your money back.
The custodian used is BitGo Trust, which has many security measures, such as multi-signature technology and cold storage.
Cold storage refers to offline cryptocurrency storage, the safest way to keep your coins away from hackers since there is no way to be hacked if they’re not connected to the internet.
In addition, all your personal information is encrypted and stored on a secure server that is as safe as bank-level security.
Who Bitcoin IRA Is For
- You have the option of transferring a minimum investment of $3000 from your existing retirement savings and can roll it over into a Bitcoin IRA.
- You want to diversify your portfolio by investing in cryptocurrency, but you’re unsure where to start or how to go about it.
- You want tax-free investment growth potential and the ability to control your own investment decisions.
- You are prepared to face the volatility of the cryptocurrency market and the possible loss of your investment.
Bitcoin IRA Review – FAQ
What Are Alternative Investments?
Alternative investment companies to Bitcoin IRA include BitIRA, Sep IRA, and iTrustCapital.
Otherwise, investments such as real estate, gold, and venture capital are popular among accredited investors.
What Are Capital Gains Taxes?
Capital gains taxes are the taxes you pay on the profits of selling an asset, such as cryptocurrency, that has appreciated in value.
Typically, long-term capital gains (gains on assets held for more than a year) are taxed lower than short-term capital gains.
What Does An Insurance Policy Mean In Cryptocurrency?
An insurance policy is a way to financially protect yourself if something goes wrong with an investment.
For example, if you invest in cryptocurrency and the value of your coins decreases, an insurance policy will reimburse you for some or all of your losses.
Similarly, if the cryptocurrency exchange is hacked and your coins are stolen, an insurance policy will reimburse you for your losses.
Wrap Up
Combining crypto trading on the blockchain with the stability of traditional investments like an IRA can help you create a well-rounded portfolio that can weather any storm.
The options to trade cryptocurrencies on the blockchain are numerous, and each offers its own distinct set of benefits and risks.
Consulting a financial advisor regarding investment options that might make sense within your retirement portfolio is always recommended.
After that, consider the security features of your new account and ensure that you are using the best bitcoin IRA platform for your needs.
With crypto assets still in relatively early stages of development and being highly volatile, be sure that you are prepared to face the risks associated with these investments if things go sour.
If you can do that and are looking for long-term growth potential and the ability to control your own investment decisions, BitcoinIRA can be a great option.
Further reading on AdamEnfroy.com: Want to learn more about the best brokerage for your IRA?
Check out my Augusta and Birch Gold reviews for more information about this topic.
You can also check out BitIRA as a platform that can transform your IRA into crypto.
In addition, here’s information on Gold IRA scams that you should know about before making any decisions.
If you’re more interested in tracking your crypto and knowing more about this side of things, check out my platform comparison articles below:
