Gold Retired

  • Buying Guide
  • Learn
    • 401k to Gold IRA Rollover Guide
    • #1 Recommended Gold & Silver IRA Solution!
    • Avoid Gold IRA Scams! | (Learn how)
    • Investing in Gold for Beginners | Basics & Tips
    • Top-5 List of Gold Investment Companies | U.S. 2023
    • What is a Gold IRA?
    • What is a 401k to Gold IRA rollover?
    • What is Numismatic Gold Coins? | BEWARE!
    • Gold IRA Pros and Cons
    • Gold IRA Rules and Regulations | 2022
    • Top-5 Gold & Silver IRA Companies | 2022
    • Top 5 Best Gold Coins – Investors Favorite Picks
  • Reviews
    • Augusta Precious Metals
    • Goldco Precious Metals
    • American Hartford Gold
    • Birch Gold Group
    • Advantage Gold
    • Noble Gold
    • Oxford Gold Group
  • Blog
    • Central Bank Digital Currency in USA – Is it being introduced?
    • Why Gold Hedge Against Inflation | one-eyed man in the kingdom of the blind
    • Where do wealthy people invest their money?
    • Gold in War | Why is it a good idea?
    • What Does the Bible Say About Retirement? | Gold & Silver?
    • How to Invest in Gold? | Different Ways You Can Do It
    • Gold Vs. Silver Investment | What makes most sense to you?
    • How to Protect Your 401k From a Market Crash | 6 Best Tips!
    • Gold IRA Scams! | Learn How to Avoid Them!
    • Roth IRA versus Traditional IRA | What Are The Differences?
    • Is it Worth Investing in Gold? Your Freedom is Under Attack!
    • What is IRA Basis? | Simple Explanation
    • 16 coins to have in a Cryptocurrency IRA | New 21/22 List!
    • What is The 702(j) Retirement Plan? | Not a Smart Idea?
  • Our #1 Recommendation

How to Invest in a Bitcoin IRA | A Quick Guide For Beginners

July 4, 2022 by Eric Leave a Comment

how to invest in a Bitcoin IRA

In today’s post, we shall look at how to invest in a Bitcoin IRA. Whereas many people are aware of the fact that they can make an income investing in cryptocurrencies, not many know about how they can utilize an IRA structure to invest for their retirement years. Herein, we’ll discuss all you need to know about Bitcoin IRA investing, to help you decide whether this is a path worth taking. Read on to find out more.


IntroductionGold Retired

The last decade has been quite dramatic in the world of finance. Investors have found themselves having to revisit their investment strategies, and rebalancing their portfolios, with the hope of surviving some tough times that have troubled most people in all corners of the world.

Even in the very severe financial storms, however, some investors have still managed to put up a good fight, and have managed to still grow their wealth. 

Cryptocurrency investors have been in the limelight from time to time, receiving admiration and contempt in almost equal measures. As the crypto industry still takes shape and carves unique niches for itself in the present-day financial world, there are some investors who have seen it fit to establish ways to enable the general population to invest in cryptocurrencies as part of their retirement investment strategy.

These investors have worked for hand in hand with the relevant institutions to establish unique retirement investment accounts that can be used to hold cryptocurrencies, known as Bitcoin IRAs. 

***What Are The Differences Between Gold and Bitcoin? Facts!


How does a Bitcoin IRA work?Gold Retired

A Bitcoin IRA is a self-directed individual retirement account that can be used to hold cryptocurrencies. It differs from a traditional IRA, where investors are limited to investments such as stocks, bonds, and ETFs.

Since the IRS Notice 2014-21, cryptocurrencies held for retirement investment in retirement accounts are treated as property, which means that they are taxed in the same manner as other assets. Due to this, any investor who wants to include cryptos in their IRA must enlist a custodian to help them comply with the set regulations. 

The difference between using a traditional IRA and a Bitcoin IRA for retirement investment is that with a Bitcoin IRA, you will most likely be interacting with the following entities:

The Bitcoin IRA service providers 

These are companies that you will turn to when adding cryptocurrencies such as Bitcoin to your IRA. You can view them as the bridge that will help you cross over to your dream to own cryptocurrencies as part of your retirement investment strategy. 

Self-directed IRA custodians 

Custodians are financial institutions that have been cleared by the IRS to hold assets in individual retirement accounts. Traditional IRA custodians oversee the investment of assets such as mutual funds and stocks, while self-directed IRA custodians oversee the investment of alternative assets such as cryptocurrencies, precious metals, etc. 

****How Can I Buy Bitcoin With an IRA? Safe & Legit Approaches?

The wallet service providers

Bitcoin IRA service providers usually partner with trusted wallet solutions that are entrusted with holding on to the keys to Bitcoin investors’ holdings. 

Previously, it was almost impossible to come across a custodian that lets you hold Bitcoin in an IRA, but this has since changed with the inception of reputable Bitcoin IRA custodians. Note that the custodian does not have any fiduciary responsibility to you, hence choosing the right Bitcoin IRA service provider is the most important aspect of bitcoin IRA investing. 

Generally, Bitcoin IRAs have:

  • Minimum monthly account administration fees
  • Holding fees
  • Transaction fees for the transfer of funds and the buying of assets.
  • Establishment fees 

These are the types of fees that you are highly unlikely to encounter as a Traditional IRA owner. 


Why do investors hold cryptocurrencies through Bitcoin IRAs?Gold Retired

Some of the reasons that seasoned investors cite for opening Bitcoin IRAs today include:

1. The diversification of their portfolios

You may have already heard the saying “ Do not put all your eggs in one basket”. Investors have found that including the right combination of cryptocurrencies in their retirement investment portfolios may help them diversify their portfolios. 

Specific asset classes may exhibit different behavior from time to time, but cryptocurrencies generally move independently from the global economy, and this may be the protective element you need in the event that an economic downturn occurs. 

2. Protection from inflation 

Cryptocurrencies are harder to obtain as their supply increases, a phenomenon known as adaptive scaling. With most cryptocurrencies, there is a limited number of tokens that are in supply, which is unlike what we have with paper money which can be printed on demand. Investors take advantage of this property to hedge their retirement savings from inflation. 

3. Protection from the influence of central bank policies 

Cryptocurrencies are decentralized, in that they do not rely or thrive on the premise of the performance or control of central authorities or institutions. Cryptos do not have a single entity that the tokens have to flow through, which implies in part that your retirement funds will not be subjected to any manipulation by the government or central banks. 

4. Tremendous growth 

Cryptocurrencies have offered unparalleled growth to investors who have managed to make timely entries and exits into the market. If anything, you may know a thing or two about the massive returns that early Bitcoin adopters amassed. The fact that mainstream financial institutions such as PayPal have recently begun supporting cryptocurrencies goes a long way to validate their value in the present-day world. This value could culminate in massive growth in the future. 

5. Tax savings 

The IRS Notice 2014-21 made it possible for Bitcoin to be treated as property. This means that all gains that an investor accrues can be retained in their IRA tax-free until it is time for them to start taking retirement distributions. 

****Can I Convert my 401k Savings to Bitcoin? | Is It Possible?


Frequently Asked Questions on “ How to Invest in a Bitcoin IRA” faq

1. Is a Bitcoin IRA a risky investment?

Cryptocurrencies have been seen to be quite volatile at times, and this has led to many people perceiving them as risky. If you have a low tolerance to risk, then volatility can be such a major downside. Witnessing your retirement funds fall by over 10% in a single day can be too much to stomach. Risk lovers, on the other end, understand that volatility could also work in their favor, and cause the value of their portfolios to rise by several percentage points in a matter of hours. 

2. Will the cryptocurrencies invested through a Bitcoin IRA be safe?

There are no guarantees that your cryptos will be safe, but you can maximize the chances of your holdings being safe by:

  • Using a wallet service provider that offers cold storage
  • Utilizing the services of a company that has high customer satisfaction ratings and reviews
  • Keep your wallet keys private. 

3. Is Bitcoin IRA investing expensive?

A common drawback to investing using Bitcoin IRAs is the fact that investors have to pay higher fees than regular IRA holders. The account set-up fees vary from one IRA service provider to the next one, but they may always end up being higher than those charged by traditional IRAs.

Investors who open Bitcoin IRAs know, however, that there are tax advantages to be gained by using such a retirement structure. They also understand that it is necessary to keep all fees and charges as low as possible, to ensure that the tax advantages are not eaten into. This is something that you ought to also have in mind as you are deciding which Bitcoin IRA service provider you will turn to. 

4. Can I withdraw the cryptocurrencies held through my Bitcoin IRA?

You are allowed to withdraw the cryptocurrencies held in your Bitcoin IRA after hitting 59 ½ years, which is the legal retirement age. Investors who attempt to withdraw their tokens before they are penalized for taking an early withdrawal. You ought to, as such, plan accordingly on the amount of money you will allocate to cryptocurrency investments. 


Or you may also be interested in this other asset: 


That will be all for today’s post on how to invest in a Bitcoin IRA. I hope you enjoyed reading it and that you gained information that will help you make better investment decisions. Let me know what your thoughts are about Bitcoin IRA investing, by dropping a comment in the section below.

I wish you well, 

Eric, Investor and Team Member at Gold Retired!

Filed Under: Crypto, Informational

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Trending from blog

  • Central Bank Digital Currency in USA – Is it being introduced?
  • How to Protect Your 401k From a Market Crash | Some Tips!
  • What the Bible Say About Retirement? | Gold & Silver IRAs?
  • Where do wealthy people invest their money?
  • How To Write a Retirement Speech | 6 Tips To Get You Started

Important pages

  • 401k to Gold IRA Rollover Guide | 5-Steps
  • Our #1 Recommended Gold & Silver IRA Solution
  • Avoid Gold Scams! | (7-Minute Read)
  • Top-5 Gold IRA Companies 2023
  • 2023 Buying Guide (gold & silver for any budget)
  • How To Invest In Bitcoin – From Your Retirement Account
  • How to avoid Bitcoin Scams
  • 401k to Gold IRA Rollover Guide | 5-Steps
  • Our #1 Recommended Gold & Silver IRA Solution
  • Avoid Gold Scams! | (7-Minute Read)
  • Top-5 Gold IRA Companies 2023
  • 2023 Buying Guide (gold & silver for any budget)
  • How To Invest In Bitcoin – From Your Retirement Account
  • How to avoid Bitcoin Scams

Useful Links

  • About Us
  • Contact Us
  • Affiliate Disclaimer
  • Privacy Policy

Gold Retired © 2023 | All Rights Are Reserved

  • See #1 Recommended Gold & Silver Firm