Bitcoin has been gaining traction in the investment universe in recent years, culminating with its meteoric rise in 2017. Now that the cryptocurrency has become a household name, savvy investors (both young and old) want to know if it is a candidate for inclusion in their retirement accounts.
How common is Bitcoin, and other cryptocurrencies, in IRAs? Not very. You used to have to make a number of special provisions in order to benefit from this emerging asset class. But now through certain providers, there is a simple and straightforward path to holding Bitcoins in your self-directed IRA…
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Is Bitcoin (or any Cryptocurrency) a Permitted IRA Asset?
Yes, you can hold Bitcoin in an IRA.
While IRS guidelines on IRA investments are at least a little bit fuzzy in regard to Bitcoin, current guidelines permit all but the following asset types to be included in a Roth or traditional IRA:
- Artwork
- Rugs
- Antiques
- Metals – with exceptions for certain kinds of bullion (such as gold & silver)
- Gems
- Stamps
- Coins – (but there are exceptions for certain coins)
- Alcoholic beverages
- Certain other tangible personal property
Bitcoin doesn’t fit under any of those categories – at least not neatly. Since the IRS has yet to specifically rule on the acceptability of Bitcoin and other cryptocurrencies in retirement plans, the retirement industry is moving slowly – and cautiously – toward acceptance.
Remember that the IRS doesn’t specifically approve what you can hold in your IRA (but they do specifically prohibit collectibles). So be aware of anyone stating they have ‘IRS Approved‘ investments.
Find a Cryptocurrency IRA Custodian Who Will Accept Bitcoin Investments
If you want to add cryptocurrencies to your retirement portfolio, the first order of business will be to find a Bitcoin IRA custodian or firm who will accept them. The vast majority of IRA custodians will not, including most of the companies with household names.
For example: Fidelity Investments, the world’s largest IRA custodian, had taken a brief foray into Bitcoin, but then promptly withdrew only months later.
However, for this review we tracked down and analyzed the top options for your retirement account for how to buy Bitcoin with an IRA (and hold it).
Some of the best IRA custodians known to accept Bitcoin include:
- Regal Assets (Our recommendation)
- BitcoinIRA.com
- Broad Financial
- CoinIRA.com
- PENSCO Trust Company
As you can see, this is a very short list. Most IRA custodians still consider Bitcoin to be too speculative to be a retirement asset and are probably also wary of sudden regulatory changes that can bring an end – or at least severe complications – to the trade.
However, the growth and investment return that Bitcoin has provided since the beginning of 2017 is undeniable.
While it is not uncommon for self-directed IRAs funded with stocks, bonds, or precious metals to provide yearly returns of 10-20%; with Bitcoin and other cryptocurrencies, it is not only possible – but historically proven – to realize gains of 100% or more…
How to Buy Bitcoin in an IRA – Direct Investing (No Need For Accredited Investor Status)
Trusted retirement custodians can help facilitate transferring your IRA to Bitcoin without you needing to be approved as an accredited investor. Accredited investors need to satisfy certain net worth and income requirements which can make investing in certain asset classes difficult or even impossible for most people.
Luckily, Regal Wallet makes it easy to get started.
Regal Wallet, a branch of Regal Assets, is one of the world’s first companies to allow the purchase of Bitcoins and other cryptocurrencies for their IRA or 401(k) retirement accounts.
The service includes setting up a qualified cryptocurrency account, rolling over funds from an existing IRA custodian, executing a live trade on a leading exchange and then moving funds into a secured, multi-signature digital wallet. They also have an offshore cold storage & offline wallet option for maximum security. Not to mention low fixed fees on every account.
Regal Assets is the most trusted name in the industry with their years of experience with precious metal IRAs.
As long as you have at least $10,000 in your current IRA you want to allocate to cryptocurrencies they will be able to walk you through the rollover process. You won’t have to worry about any hidden fees either.
While Bitcoin is the most prevalent cryptocurrency to rollover into a self-directed IRA, Regal Wallet also helps you decide how to optimally diversify your account with allocations for Ethereum, Ripple, Litecoin, and other top crypto options.
Regal Wallet is the best Bitcoin IRA custodian service to hold your cryptocurrency IRA investment.
Should You Hold Bitcoin in Your IRA?
If you consider Bitcoin to be a good future investment, then it certainly makes sense to hold it in an IRA (Roth or traditional). Just understand that the investment will not be welcome with all, or even most, typical IRA custodians. This Bitcoin IRA review has laid out the top options for you to consider.
Also, understand that the current acceptance of Bitcoin – as a currency and as an investment – is still being worked out. Where it lands, for official purposes, is anyone’s guess. This is a significant risk that applies to this new type of asset.
Given the speculative nature of both Bitcoin itself, and it’s fledgling acceptance level, it would be best to take a relatively small position to start with, even in a retirement account. If the investment potential holds, you can still make a fortune with even a small investment.
Holding some cryptocurrency in a self-directed IRA is a solid option to diversify your retirement portfolio for both young and mature investors. Moving a small percentage of your portfolio over to crypto minimizes your downside risk while exposing you to the tremendous upside potential of this emerging asset class.
If you want to learn more about putting Bitcoins in your retirement account, we recommend that you seek advice from an experienced financial professional. Speaking with a Regal Wallet representative today is a great place to start.
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Still it is wise thing to invest in Bitcoin through IRA
But I can recommend you invest in gold through IRA..
Yes, allocating some of your retirement portfolio to both gold and cryptocurrency is a solid strategy.
Not only is a Bitcoin IRA a safe place to store your money, but it is also a great investment for the long term future. I love the fact that these providers offer cold storage security on top of the IRA tax benefits. Plus you are investing into Bitcoin!
Best of both worlds for sure – investing in an emerging market while leveraging the tax benefits of an IRA.
Tom, thanks for the article. I think the self-directed IRAs movement is just picking up. In my view, in few years Fidelities and Vanguards of the world will be offering them. Otherwise, they leave money on the table. I agree with both of the commenters – one should invest in both gold and in Bitcoin. I’d say physical gold and Bitcoin in cold storage. Most people have some funds in qualified dollars – wouldn’t it be nice to be able to use some of that? Self-directed IRA is an answer.
Thanks for the kind words. We are advocates of rolling over retirement funds into both physical gold and Bitcoin self-directed IRAs.
a lot of people are all in on bitcoin but it’s losing its market share quickly. My advisor at Gramercy Gold put me an a portfolio with ethereum and neo for my IRA, which makes sense because one of the most fundamental rules of investing is to diversify. I don’t know which coin will ultimately go up the most, but my portfolio is set up to catch it
Yes, that is a great point! Most companies advertise Bitcoin IRAs but also offer the option to diversify into other major cryptocurrencies such as Ethereum, Ripple, and Litecoin.