Find the Best Bitcoin IRA Companies
Compare Top Bitcoin IRA Reviews
Read 17 Reviews
Bitvest IRA is a company dedicated to mining Bitcoins for use in an IRA. You buy Bitcoins at a discounted rate for deferred delivery. You can choose among several options for Bitcoin purchases.
|Read 11 Reviews|
This company provides some of the most secure digital currency IRAs on the market. It provides end-to-end insurance for your IRA, and it keeps your assets secure in true cold storage on a drive in a guarded vault.
|Noble Bitcoin||Read 6 Reviews|
Formed in 2016, Noble Bitcoin is the cryptocurrency branch of Noble Gold Investments, a precious metals IRA firm. Noble Bitcoin operates with a client-first philosophy to make sure investors understand their assets.
|BlockMint Cryptocurrency IRA|
Cryptocurrency IRA investment company. Requires a minimum investment of $10,000. $500 enrollment fee. $195 annual storage fee. Cryptocurrency branch of Lear Capital.
Specializes in cryptocurrency investment products, including retirement accounts. IRA assets insured and kept in cold storage with military-grade encryption.
|BitcoinIRA||Read Author Review|
BitcoinIRA is one of the earliest IRA services to recognize the potential of Bitcoin. BitcoinIRA is a full-service company that offers rollover, traditional or Roth IRAs in a wide variety of cryptocurrency options.
|Broad Financial||Read Author Review|
Broad Financial is a self-directed IRA and 401K company that offers Bitcoin investment options. Clients pay a flat fee to direct their own Bitcoin investments with as much or as little professional input as they want.
|First Digital IRA||Read Author Review|
First Digital IRA’s minimum investment requirement is $20,000. You can invest in Bitcoin, Ethereum and Ripple IRAs. They partner with Kingdom Trust Co. to be the custodian for their digital IRA customers.
|Regal Assets Bitcoin IRA||Read Author Review|
This Alternative Assets IRA requires a minimum investment of $5,000 in Bitcoin. They offer segregated storage, which means your investments are never shared or pooled with other investors.
Common questions about Bitcoin IRAs
How does Bitcoin work?
Designed to be untraceable and unhackable, Bitcoin is an encrypted form of digital currency, referred to as cryptocurrency. It exists online on what’s called the blockchain, which is a constantly-growing list of records (blocks) that serve as a digital ledger. Each block is encrypted and records transactions across a peer-to-peer network.
Once data is recorded in a block, it cannot be changed, which makes each recorded cryptocurrency transaction secure and documented accurately.
Bitcoin only exists in digital form, and the system will only make 21 million Bitcoin. That means the cryptocurrency isn’t infinite. Over 80 percent of Bitcoins have already been mined.
How do you get Bitcoin?
The most common way to buy Bitcoin is online from one of several Bitcoin exchanges. You’ll have to pay an exchange fee, similar to what you would pay if you were buying stocks.
Another, more complex, way to get Bitcoin is as a miner. Mining refers to the process of recording and verifying transactions. Miners separate transaction information into blocks on the blockchain. Essentially, the people who verify transactions solve complex mathematical puzzles to add blocks to the blockchain, which keeps the Bitcoin network running. As miners solve these transactions, they are awarded Bitcoins.
Before you can buy Bitcoin from a Bitcoin exchange, you’ll need to set up your Bitcoin wallet, which is a piece of software (or hardware) used to store your coins. You use your wallet to make transactions and interact with the blockchain. You can store this wallet either on a device connected to the internet (a hot wallet), or you can store your wallet on a drive that is not connected to the internet (a cold wallet).
Once you have made your transaction on a Bitcoin exchange, expect it to take anywhere from one to 16 hours for your Bitcoin transfer to complete. A Bitcoin needs confirmation from six miners, which takes about 10 minutes each, assuming the confirmations happen immediately. With the increased popularity of Bitcoin, the network has become more and more congested, which means it can take several hours to complete Bitcoin transfers.
Is Bitcoin legal?
Buying and selling Bitcoin is legal in the United States and in several countries. Some countries where it is not legal include Iceland, Canada and Australia.
Because Bitcoin’s marketplace is deregulated, there isn’t a central authority overseeing and issuing transactions, like a bank or the government. However, Bitcoin transactions and payments in the U.S. are still subject to anti-money laundering regulations, just like traditional currency.
Is Bitcoin a good investment?
Bitcoin can be a lucrative investment, however, as with any high-risk investment, investors should proceed with caution.
Many people feel that the federal reserve is creating too much money and worry about national debt and deficits. Opening a Bitcoin IRA puts your money in a value system independent of the federal reserve. If the value of the U.S. dollar drops, your funds will not be affected. Also, Bitcoin value isn’t tied to stocks and bonds. In the event of an economic crisis, your Bitcoin will be safe and its value unaffected.
Another reason people invest in Bitcoin is to have complete control over their assets. You don’t have to worry about mismanagement or fraud. You are free to keep or trade Bitcoin as you see fit without having to go through a bank.
As with any high-risk investment, proceed cautiously if you plan on investing your retirement in Bitcoin. Hopkins advises investors to be wary of speculative purchases, like Bitcoin, especially when it comes to making an IRA investment. He cautions against investing money in a Bitcoin IRA unless you have a side or extra investment bucket.
How to invest in Bitcoin
Step 1: Open a Bitcoin IRA account
All digital IRAs, including IRAs for Bitcoin and other cryptocurrencies, are self-directed IRAS. This means that you are the only one who has a say in your investment decisions. There won’t be a third party involved who makes investment decisions for you. Your Bitcoin IRA will have a certified custodian who carries out your instructions for you. (This is a legal requirement to ensure your IRA follows all the rules and regulations outlined by the IRS.) The custodian acts as an account administrator and does not make investment decisions for you.
You can apply for your Bitcoin IRA online with your chosen company. Some companies, like Bitcoin IRA, allow you to opt for managed service, in which a live agent walks you through the application process.
Note: Even though Bitcoin is known for its anonymity, your Bitcoin IRA application will need to include some identifying information.
Step 2: Fund your Bitcoin IRA
Once your account has been set up, your Bitcoin IRA company will submit a request to transfer funds from your existing retirement account to the new Bitcoin IRA. This is a fast process that can usually be completed in as little as five minutes.
Step 3: Buy Bitcoin
The company you work with should schedule time with you to buy Bitcoin to add to your IRA. The IRS currently does not allow investors to roll Bitcoins they already own into a new Bitcoin IRA.
Step 4: Setup a Bitcoin wallet
Your Bitcoin IRA company will generally handle the setup and security of your Bitcoin wallet for you. Many Bitcoin IRA companies use cold storage, which means your Bitcoin is stored offline. Other companies partner with companies like BitGo who manage secure wallets.
Types of cryptocurrency to invest in
Bitcoin is the first and most famous cryptocurrency. It was invented in 2009 as a peer-to-peer electronic cash system and is capped at 21 million coins. If you’re rolling your cryptocurrency into an IRA, you’ll likely be investing in Bitcoin. However, some IRA companies can help you find other options. Bitcoin’s platform allows for up to seven transactions per second.
Litecoin is another cryptocurrency that functions quite similarly to Bitcoin. Litecoin launched in 2011, and it generally has a faster transaction than Bitcoin at 56 transactions per second. A Litecoin IRA is cheaper than Bitcoin, minimizing both your risk and your potential reward. Litecoin is capped at 84 million coins, which is significantly more than Bitcoin’s cap of 21 million. It also has a smaller price per unit. You can invest in Litecoin with companies like Noble Bitcoin and Bitcoin IRA.
Ethereum is a software platform that enables contracts to work without any downtime. It produces a token called “ether,” which is used as a sort of currency on its platform. Ethereum’s technology is specifically aimed at smart contracts, which are written in code into a blockchain. Ethereum has a maximum processing time of 20 transactions per second. You can invest in the Ethereum platform with your IRA if you choose a company like Bitcoin IRA or Noble Bitcoin.
Ripple is a global settlement network that was built for enterprises. It is primarily used by banks and payment providers. Ripple offers low-risk intercontinental payments at low costs with full transparency. Unlike Bitcoin, Ripple currency does not have to be mined, and since it is not as widely-known as Bitcoin, it’s often a cheaper investment for an IRA. It has a significantly faster transaction processing time than other cryptocurrencies at 1,500 transactions per second and an average transaction time of four seconds. Noble Bitcoin and Bitcoin IRA are great options if you’re looking to invest in Ripple.
Bitcoin IRA FAQ
- Can I buy Bitcoin in my Roth IRA?
- Yes, buying Bitcoins with a Roth IRA is the same as buying with a traditional IRA. Both types of accounts handle assets differently, but there is no distinction between the two with respect to Bitcoin.
- Can you put Bitcoin in an IRA?
- It depends:
- Many people buy Bitcoins with their IRAs as a way to diversify their investments and potentially increase their returns.
- You cannot, however, roll over or sell Bitcoins you currently own to your IRA. If you have Bitcoins that you want to transfer to your IRA, you must sell it, then put the proceeds in the account.
- Can you invest your 401(k) in Bitcoin?
- There’s no existing mechanism to link your 401(k) to Bitcoins directly. However, you can invest the funds from your 401(k) in Bitcoins by converting it to a self-directed IRA and using that account to purchase Bitcoins.
- Is Bitcoin safe to invest?
- Bitcoin is a high-risk investment, but its volatility is what attracts many investors. Most experts recommend investing only part of your savings in Bitcoins as a way to diversify your portfolio and insulate yourself from market trends and potential economic crises. No investment is 100% safe, so assess your risk tolerance and financial situation before you choose to invest in Bitcoins.
- What is cryptocurrency used for?
- People use cryptocurrencies, like Bitcoin, in all the ways they use traditional currencies, including:
Because most forms of cryptocurrency are private, secure and hard to trace, many people use them for online purchases.
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Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.
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