Contents
Best Bitcoin IRA Companies
While Bitcoin is very volatile, it has become a popular way to diversify outside of the stock market. However, if you have bought and sold Bitcoin or other cryptocurrencies, you may already be aware that it can come with a hefty tax bill at the end of the year.
One way you can protect yourself from those taxes and invest for the long term is by using a Bitcoin individual retirement account (IRA). Our buyers guide to the best Bitcoin IRA companies covers the details of how they work, how to find a reputable company, the pros and cons and how to open an account.
Bitcoin and other cryptocurrencies are an investment and carry risk. Consumers should be alert to claims that customers can make a lot of money in these or any investment with little risk. As with any investment, you can lose money and past performance is not a guarantee of future performance results. Consumers should also obtain a clear understanding of the fees associated with any investment before agreeing to invest.
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Compare Top Bitcoin IRA Reviews | ||||||
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Read 19 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. |  | Chat with a ConsumerAffairs decision guide | |||
Read Reviews
| Specializes in cryptocurrency investment products, including retirement accounts. IRA assets insured and kept in cold storage with military-grade encryption. |  | Chat with a ConsumerAffairs decision guide | |||
| Read 19 Reviews | Digital asset self-directed IRA provider. Offers 17 different cryptocurrencies. Can open a traditional, SEP, SIMPLE or Roth IRA account. Secure storage of assets in cold storage facility. Fees not disclosed. |  | ||||
Cryptocurrency IRA investment company. Requires a minimum investment of $10,000. $500 enrollment fee. $195 annual storage fee. Cryptocurrency branch of Lear Capital. |  | Chat with a ConsumerAffairs decision guide | ||||
| 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. |  | Chat with a ConsumerAffairs decision guide | |||
| 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. |  | Chat with a ConsumerAffairs decision guide | |||
| 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. |  | Chat with a ConsumerAffairs decision guide | |||
| 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. |  | Chat with a ConsumerAffairs decision guide | |||
What is a Bitcoin IRA?
Bitcoin is the original cryptocurrency. Founded in 2009, it has risen in value from a few cents per bitcoin to over $40,000 per bitcoin as of publishing. You can purchase Bitcoin through online exchanges or mine it using a large amount of computer processing power. And now you can also invest in Bitcoin and other cryptocurrencies within a retirement account.
Bitcoin IRAs are self-directed individual retirement accounts that allow you to purchase Bitcoin and other cryptocurrencies within a tax-advantaged account. This requires working with a company that can facilitate the setup process, handling compliance and other legal requirements for purchasing Bitcoin within an IRA.
Bitcoin IRA companies provide a platform and dashboard to purchase Bitcoin and other cryptocurrencies, making it easy to invest in alternative assets for retirement.
» MORE: How much do I need to retire?
How does a Bitcoin IRA work?
Bitcoin is considered property, so it requires a custodian to hold it within an IRA account. Bitcoin IRA companies help you navigate the process of opening a self-directed IRA and connect to online cryptocurrency exchanges so you can buy, sell and trade Bitcoin and other cryptocurrencies within your account.
Many Bitcoin IRA companies partner with crypto exchanges (such as Coinbase), giving you a much nicer interface to work with when investing in Bitcoin and other crypto. Since these are self-directed IRA accounts, you can also own other assets, and some Bitcoin IRA platforms offer gold, silver and other precious metals you can invest in.
You can typically choose between a traditional IRA and Roth IRA account, allowing you to save on taxes now or in retirement.
» MORE: Traditional IRA vs. Roth IRA
Pros and cons of Bitcoin IRAs
Bitcoin IRAs give you a legal way to invest in crypto within your retirement account. This allows you to purchase Bitcoin and other cryptocurrencies (and even trade them) within a tax-advantaged account.
"For the most part, the risks of investing in Bitcoin are similar to any other asset, namely the risk of losing capital," said Mike Soroudi, vice president at Digital Asset Investment Management. "Bitcoin is more volatile than traditional assets so depending on your time horizon it could be down a lot more on a relative basis. However, the volatility has shown to be positive over long periods."
Pros
- Can potentially deliver much higher returns than traditional assets like stocks and bonds.
- Don’t pay taxes on trading within your account.
- Can offer diversification for a broader retirement investing strategy.
Cons
- Bitcoin and crypto are very volatile investments.
- You can’t take full custody of your bitcoin until retirement age.
- There is a risk that the custodian managing your account may go out of business and you lose access to your cryptocurrency.
How to choose a Bitcoin IRA company
When choosing a Bitcoin IRA company, here are a few factors to consider:
- Setup costs: Some Bitcoin IRA companies charge a hefty setup fee. It’s important to understand what is included with the fee to evaluate if it’s worth it.
- Trading fees: If you plan on placing a lot of trades within your Bitcoin IRA account, you’ll want to know what the trading fees are to make sure you don’t end up paying too much.
- Crypto selection: If you want to invest in more than just Bitcoin, be sure to review the company’s crypto asset list to make sure it offers what you’re looking for.
- Security measures: When it comes to Bitcoin and crypto investing, security is paramount. Check the company’s security measures around your personal information, as well as how your crypto is protected and insured.
- Custodian reliability: Does the company partner with a reputable crypto custodian? Are your funds insured in case something happens? It’s important to not only research the Bitcoin IRA company, but the custodian it uses as well.
- Company reputation: Does the company have a good reputation? Do a lot of people use it?
» MORE: What is a good investment?
How to open a Bitcoin IRA
Here’s how to open a Bitcoin IRA and start investing:
Step 1: Choose a Bitcoin IRA account
Once you choose a Bitcoin IRA account, you’ll sign up just like any other investment account. You’ll need to provide your personal information, including name, address, email and Social Security number. (Even though Bitcoin is known for its anonymity, your Bitcoin IRA application will need to include some identifying information.)
Some companies allow you to opt for managed service, in which a live agent walks you through the application process.
Step 2: Fund your Bitcoin IRA
Because Bitcoin IRAs are self-directed, you’ll need to work through a custodian to fund your account. Once your account has been set up, your Bitcoin IRA company will submit a request to transfer funds from your bank account or from your existing retirement account to the new Bitcoin IRA.
Note that if transferring funds from another IRA account, you will need to sell your investments and only transfer cash over.
Step 3: Buy Bitcoin (and other crypto)
Once your account is funded, you can start investing in Bitcoin and other cryptocurrencies. While some platforms connect you with a partner exchange and allow you to place trades, others require that you submit a request through its custodian to buy or sell cryptocurrencies.
Remember, you can only invest up to the annual limit in your IRA account, which is currently $6,500 for the year 2023, and $7,000 for the year 2024.
Step 4: Choose where to store your Bitcoin
Bitcoin IRA companies typically store your cryptocurrency with the third-party custodian that handles your investment transactions. This may include setting up a Bitcoin wallet in which to store your crypto.
Many Bitcoin IRA companies also use cold storage, which means your bitcoin is stored in an offline wallet that cannot be accessed through the internet. Other companies partner with companies like BitGo that manage secure wallets.
FAQ
Are Bitcoin IRA companies safe?
“Bitcoin IRAs are safe and getting safer as the space grows,” said Soroudi. “We recommend using a licensed advisor to get started in this space as it can be difficult to set things up initially. Make sure your advisor is a licensed financial advisor and fiduciary as well. Traditional securities laws offer a lot of consumer protection and if you use the advice of someone who operates within the bounds of these traditional rules and regulations you’ll have an added layer of protection.”
How are Bitcoin IRAs taxed?
Bitcoin IRAs are taxed in the same way that regular IRAs are taxed. Deposits into a Bitcoin IRA account are tax-deductible if you choose a traditional IRA, or can be withdrawn tax-free in retirement if you choose a Roth IRA. And buying and selling crypto within your Bitcoin IRA account does not incur any taxes.
Is there a Bitcoin 401(k)?
While there are no self-directed 401(k) options for investing in Bitcoin and other cryptocurrencies, Fidelity now allows investors to invest in Bitcoin within existing 401(k) accounts managed by Fidelity. The Fidelity Digital Assets Account (DAA) is available through Fidelity workplace accounts, giving employees the opportunity to invest in Bitcoin directly.
What other assets can you put in an IRA?
While regular IRA accounts allow you to only invest in securities (such as stocks and bonds), self-directed IRA accounts allow you to invest in alternative assets. This includes real estate, precious metals, private investments, foreign currency, artwork and more.
Guide sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- CoinDesk, “Bitcoin.” Accessed Dec. 14, 2023.
- IRS, "IRA FAQs." Accessed Nov. 30, 2023.
- Securities and Exchange Commission, "Investor Alert: Self-Directed IRAs and the Risk of Fraud." Accessed Nov. 30, 2023.
- Fidelity, "Ways into crypto." Accessed Nov. 30, 2023.
- Fidelity, "Digital Assets Account." Accessed Nov. 30, 2023.
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Author reviews about Bitcoin IRA companies
BitcoinIRA is a full-service IRA company that can provide rollover, traditional or Roth IRAs. With BitcoinIRA, you can invest in Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash and Ethereum Classic.
- Full-service investor: BitcoinIRA provides several different services, including expert consultation, rollover service, traditional IRA and Roth IRA accounts. BitcoinIRA also offers more cryptocurrency investment options than most competitors.
- Price charts: BitcoinIRA posts updated price charts for both Bitcoin and Ethereum. You can access these charts for free at any time to better plan your investments. You can see the history of Bitcoin growth and daily updates to Bitcoin prices.
- Simple online transfer: Setting up an IRA rollover is simple with BitcoinIRA. You can set up a rollover online in as little as 5 minutes.
- Downloadable e-book: BitcoinIRA gives you a free downloadable e-book: The Ultimate Guide to Bitcoin IRA Investing. It provides a detailed guide and advice for investing. To access it, you just need to give BitcoinIRA your email address.
- Bitgo wallet: BitcoinIRA keeps your Bitcoins safe in a Bitgo IRA wallet. The Bitgo wallet is a three-layered security system that requires multiple signatures to keep your money safe.
Broad Financial is a private estate firm that offers self-directed IRAs and solo 401ks. With a new focus on Bitcoin investment, Broad Financial gives you total control over your cryptocurrency IRA.
- Flexible investments: Broad Financial’s self-directed IRAs provide flexibility with your Bitcoin investments. You can choose the specifics of your investments and how you want to grow your IRA.
- Flat-fee investment: To invest with Broad Financial, you pay a flat fee instead of an asset-based fee. Whereas many companies will charge you a fee of up to 15 percent of your portfolio to invest, Broad Financial charges a one-time flat fee of about $1,395 (depending on your state) to start investing.
- Professional advice: When you start your self-directed IRA, you will speak with a specialist who gives you honest assessments of your current finances. They offer advice for your portfolio, whether you are a new or veteran investor.
- Helpful Bitcoin information: Broad Financial hosts different Bitcoin resources, such as infographics and advice columns. All of this information is available for free.
- Easy startup: Investing with Broad Financial starts with a phone call or an online form. Response time is quick, and you’ll be on your way to investing in no time.
Offering the world’s first Alternative Assets IRAs for Bitcoin, the company was also the first to receive a crypto-commodity trading license and to offer IRA options for Bitcoin and all other major cryptocurrencies.
- Free rollover kit: Request a free kit to find out more about how to rollover your cryptocurrency IRA.
- Diverse cryptocurrency options: With Regal Assets, you can invest in more than just Bitcoin. Litecoin, Monero, Ripple and Ethereum are also available for investment.
- Security investment options: If you want to invest your money for security, you have two package options. The Merchant Package requires a nominal $5,000 reserve, and you can liquidate your assets if you need quick access to money. The Knighthood Package requires a $10,000 investment, and it is mostly for family investments.
- Portfolio packages: You can choose from four different portfolio packages. The Legacy Portfolio requires a $25,000 investment. The Kingship Portfolio requires a $50,000 investment. The Dynasty Portfolio requires $100,000. The Coronation Portfolio requires $250,000.
- Online expert chat: If you have any questions about your investment options, you can chat online with an expert 24/7.
First Digital IRA can help you invest in Bitcoin, Ethereum and Ripple IRAs. In addition to these cryptocurrencies, your digital IRA can also include other investments, such as stocks, bonds, mutual funds, raw land, real estate and precious metals. They will work with you to rollover your existing IRA to a digital IRA, and you can choose to structure it as either a traditional IRA or a Roth IRA.
- Works with several types of currency: First Digital IRA doesn’t only work with Bitcoin. You can also invest in Ethereum or Ripple, and you can include other assets in your digital IRA.
- Digital currency specialists: You’ll work with a digital currency specialist who will get you set up with your digital IRA. Your currency specialist will prepare and submit paperwork, work with your current custodian to ensure a smooth rollover to your new IRA, ensure secure storage of your new digital currencies and make sure you have all the information you need before you decide which cryptocurrencies to invest in.
- Free guide: To find out more about investing in a digital IRA, sign up for a free guide from First Digital IRA. The guide will give you more insight into how a digital IRA works so you can decide if it’s right for you.
- Full service: First Digital IRA will handle the entire process of investing in your new digital IRA.
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.
