Bitcoin IRA review 2023
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Updated: July 27, 2023
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Cryptocurrencies have been growing in popularity. Not only have they attracted more investors than ever, but small positions in the digital asset are being recommended by a growing number of financial advisors.
However, one of the disadvantages of investing in cryptocurrencies is the inability to hold the assets in a retirement account. But Bitcoin IRA, an all-in-one IRA provider and trading platform, offers a way around that limitation, so you can invest in crypto even for your retirement.
Bitcoin IRA pros and cons
- Offers an IRA account where you can purchase, hold, and trade more than 60 different cryptocurrencies.
- You can hold physical gold bullion in your account.
- High interest savings — up to 6% — with no lockup period.
- Unlike many other SDIRAs, you do not need to create an LLC to participate in a Bitcoin IRA.
- Minimum required investment is $3,000 unless you select a mandatory monthly contribution plan.
- Per IRS requirements, you cannot transfer crypto directly into an IRA account; all account fundings must be done in cash.
- High fees compared with conventional IRA accounts.
- $10,000 minimum requirement to participate in Bitcoin IRA Earn.
- Though private insurance is available, there is no coverage offered through FDIC or SIPC.
What is Bitcoin IRA?
Bitcoin IRA was launched in 2016 to enable investors to hold cryptocurrency in their IRA and 401(k) accounts. They offer both traditional and Roth IRA accounts, as well as self-directed 401(k) accounts. The company already has more than 100,000 users and claims to be the largest crypto retirement platform in the industry.
Bitcoin IRA isn’t meant to be an all-in-one IRA account, but rather a supplemental plan that will give you an opportunity to hold crypto, and even physical gold, in your retirement portfolio. If you want to hold other assets, like stocks, bonds, and funds, you’ll need a more traditional retirement plan.
How does it work?
Bitcoin IRA is a special class of IRAs known as a self-directed IRA (SDIRA). These are not to be confused with the self-directed capabilities of conventional IRA accounts, which enable you to invest freely within your own account.
An SDIRA is a specialized IRA account that enables you to invest in nontraditional asset classes, like cryptocurrency and gold bullion.
SDIRA is generally both more complicated and expensive than a conventional IRA. There are inherent risks involved in investing in cryptocurrency that you should be aware of. The asset class has shown a history of dramatic price increases, followed by equally spectacular declines.
For this reason, Bitcoin IRA requires a minimum initial investment of $3,000. But you can get around that requirement by setting up a Saver IRA. You can open an account by committing to fund it with just $100 per month, beginning in the first month. The funds will be contributed through a connected bank account and invested automatically in cryptocurrencies you select.
You can create your Bitcoin IRA account, either on the website or on the mobile app, in under three minutes. From there, you’ll be able to create a customized dashboard and digital wallet. Once you’re set up, you have access to live pricing and Bitcoin IRA’s fully loaded knowledge base that includes tutorial videos, infographics, and articles.
You’ll also be able to buy and sell crypto on a 24/7 basis, and in real time. And since an IRA is a tax-sheltered account, you won’t need to worry about the tax consequences of your trades.
What do they offer?
In addition to investing in more than 60 different cryptocurrencies, you can also hold gold in your Bitcoin IRA. You can buy, sell, and trade crypto online in your IRA account 24 hours a day, seven days per week.
The account also enables you to invest in gold bullion, in one-ounce increments. That means you’ll be investing in actual physical metal, not a gold exchange traded fund (ETF) or gold stocks.
On that note — as of writing, at least — Bitcoin IRA does not offer more common retirement investments, like stocks, options, or ETFs. But it will give you the complete ability to add crypto investing to your overall retirement portfolio.
Bitcoin IRA Earn
This is an interest-earning program for the crypto and cash held in your IRA. It allows investors to earn as much as 6% APY on Bitcoin, Ethereum, and cash. There are no lockup periods, like CD terms or minimum holding periods.
Interest accrues daily and is paid directly into your retirement account on a monthly basis.
Bitcoin IRA Earn requires a minimum of $10,000 per coin to participate in the program. There is also a $100 fee to start the program, and $100 to stop it.
When you buy gold for your Bitcoin IRA, you’ll be purchasing physical gold bullion in one-ounce increments. The bullion is held in bar form at leading Brink’s bullion vault facilities. Each bar is identified with a unique serial number, purity, and weight. But be aware that it can take up to 24 hours for a gold purchase to settle in your account.
Here's a detailed run-down of Bitcoin IRA's service offerings and minimums.
Fees and limits
When you open an account with Bitcoin IRA there is an initial one-time service fee that’s based on the amount of your investment. The fee covers comprehensive services, including full support of rollover of funds from other retirement accounts, a complete setup of a self-directed IRA with BitGo Trust, investing class security, and storage for your assets. There is also a minimal custodian and security fee for your account.
Since Bitcoin IRA offers self-directed retirement accounts, customers are required to call for the specific fees they’ll be required to pay. No schedule of fees is presented on the website. However, outside web sources indicate 5.99% for the upfront fee, and a 1% annual fee, billed in monthly increments.
Bitcoin IRA charges a flat 2% fee on crypto trades, for both buying and selling.
The Bitcoin IRA Earn program has a $100 start fee and a $100 stop fee.
Who is it for?
Bitcoin IRA is for anyone who wants to add or actively trade cryptocurrencies in their overall retirement plan. You’ll have the advantage of choosing either a traditional IRA account (with tax-deductible contributions but taxable withdrawals) or a Roth IRA account.
With the Roth IRA, your contributions will be tax-deductible, but withdrawals will be tax-free once you reach age 59 ½ and have participated in a Roth plan for at least five years.
If you’re self-employed, and you want to make larger contributions to your retirement plan, you can open a self-directed 401(k) plan. Armed with that plan, you can contribute up to $67,500 to the plan for 2022.
How do I open an account?
You can open an account from either the website or the mobile app. You’ll start by entering your name, phone number, and email address, then creating a unique password.
You’ll need to fund your account with a minimum of either $3,000, or by signing up for the Saver IRA with at least $100 and agreeing to a minimum monthly contribution of $100 to predetermined cryptocurrencies.
You can fund your account by connecting a checking or savings account with your bank to your Bitcoin IRA account. Remember you must fund your IRA account with cash transfers. The IRS prohibits transferring existing assets, like the cryptocurrency you already hold, directly into an IRA account.
How's the customer service?
Bitcoin IRA provides an 877 phone number for customer service contact, though they don’t indicate hours of availability. Contact is also available through the “Schedule a Call” feature that appears under the “Why Us?” tab at the top of the webpage. Just choose a day and time to schedule a 15-minute IRA consultation with a Bitcoin IRA specialist.
The company has a rating of A+ with the Better Business Bureau, where it’s been accredited since March 2020. Bitcoin IRA has received just three complaints through the agency in the last three years.
Is it safe?
Bitcoin IRA keeps your digital assets safe by storing 100% of your investments offline. Digital assets are placed in a segregated cold storage account at BitGo Trust, which is a U.S.-based qualified custodian.
You’ll also get the benefit of 256-bit encrypted SSL certification trading, as well as a digital wallet with industry-leading standards of multi-sig (P2SH) for security and HD (BIP32) for financial privacy.
Meanwhile, Bitcoin IRA account custodial assets are covered with up to $700 million in custody insurance from BitGo Trust and their insurance provider, Lloyd’s of London. Gold held in your account is insured at the Brink’s vault facility where it’s held, as well as when it is in transit.
Despite the growing popularity of crypto investing, Bitcoin IRA has very few competitors in the crypto retirement space. Two of the most prominent are Alto and Kingdom Trust.
Alto is one of the most popular self-directed IRA providers available today. The company will allow you to either open an Alto IRA (to invest in assets like real estate, precious metals, artwork, and more) or an Alto Crypto IRA to trade cryptocurrencies on Coinbase. With either choice, you'll have the option to set up your retirement account as a Traditional, Roth, or SEP IRA.
Kingdom Trust offers self-directed IRA accounts that enable you to invest in more than 20 different cryptocurrencies. But you can also hold gold, stocks, and ETFs in your account, though they do specialize in crypto. The company has been around since 2009 and has more than $18 billion in assets under management in 125,000 accounts.
The bottom line
There is growing interest in investing in cryptocurrency, but precious few platforms that enable you to do it in an IRA account. Bitcoin IRA is one of the few that does, and they specialize in the asset class.
If you believe crypto should be a part of your long-term retirement investing strategy, opening an account with Bitcoin IRA is worth considering.
If you do open an account, primarily intending to invest in crypto, be sure the majority of your retirement savings are in more traditional accounts. Crypto should occupy no more than a small percentage of your total retirement savings. Make sure that the vast majority of your portfolio is held in more conventional assets, like stocks and bonds.