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Bitcoin IRA Review: What You Should be Aware of

Making IRA transfers has never been easier with BitcoinIRA. Here is a complete Bitcoin IRA review that assesses the pros and cons of the platform.

  • Dean Fankhauser
    By
  • Posted
  • Read Time6 minutes
  • Our score

Bitcoin IRA review

Our take

3.5

In 2014, the median retirement savings for Americans 55-64 was just over $100,000. That may sound like a lot, but it would translate to just $310 per month after being invested in an inflation-protected annuity.

That’s hardly a sizable bonus, let alone enough to live on.

Fortunately, average retirement savings have significantly increased in recent years, even among millennials. But at some point, many people have the troubling realization that they aren’t adequately prepared for retirement.

If that sounds like you, then this Bitcoin IRA review is for you.

One problem people have with retirement savings is the rate of inflation. They’re worried that their hard-earned savings won’t even be worth that much by the time they retire.

One way shrewd investors respond to this problem is by investing in assets other than fiat currency. Materials like gold will increase in value, even as the value of the dollar goes down.

However, when you invest in physical assets, you can miss out on some of the tax advantages provided by traditional IRAs. But what if you could use an IRA and still avoid relying on fiat currency?

That’s exactly the service Bitcoin IRA provides. Keep reading to learn more.

Bitcoin IRA Review: What is Bitcoin IRA?

Bitcoin IRA is a crypto platform and the first company ever to offer cryptocurrencies in an IRA. Their simple platform allows new investors to get started with cryptocurrency trading in just minutes.

Despite the name, Bitcoin IRA doesn’t just support Bitcoin. They currently support nine different tokens, including Ethereum and Bitcoin Cash.

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IRAs and Crypto

An IRA, or individual retirement account, is essentially a savings account with tax advantages.

When you deposit money into an IRA, you aren’t taxed on that income. When the money in your account earns interest, you aren’t taxed on that, either. You’re only taxed when you begin taking the money out of your IRA, once you reach retirement age.

A Roth IRA works differently, in that you’re taxed on interest and money that goes in, instead of paying taxes as you take money out later.

Normally, IRAs use safe, standard forms of investments to earn interest. However, financial service firms like Bitcoin IRA allow you to invest in cryptocurrency with your IRA account.

With a self-directly crypto IRA, you can still invest and earn interest on the cryptocurrency. But unlike fiat, you can also gain even more as the value of crypto goes up. Perhaps best of all, you get to bypass fiat currency’s inflation problem entirely.

However, as with all types of investments, using Bitcoin IRA comes with its own set of advantages and disadvantages.

A big advantage of using cryptocurrency in your IRA is that it diversifies your portfolio. This not only looks good on financial statements, but it also means your savings are safer than they would be if they were all invested in one area. Cryptocurrencies are also expected to increase in popularity and value, which means they should be a strong long-term investment.

The main disadvantage of investing with crypto is that, although values tend to rise, cryptocurrency is volatile. No one can perfectly predict whether Bitcoin will continue to increase in value or suddenly go out of fashion. You’re also limited in how you can spend and utilize cryptocurrency compared to fiat.

Bitcoin IRA

Crypto IRAs do not work in the same way as traditional IRAs. The Internal Revenue Service doesn’t recognize cryptocurrency as real money, so there’s no IRS account designed for crypto.

The government views cryptocurrency as a form of property. When crypto is in a retirement account, it gets taxed in the same way that stocks and bonds are. So instead of true IRA accounts, Bitcoin IRA uses accounts that simply include digital currencies within their portfolio of holdings.

Bitcoin IRA is not the only financial firm offering IRAs with crypto holdings. BitIRA and Equity Trust are two other notable companies providing a similar service. But Bitcoin IRA was the first to offer IRAs with crypto, and they continue to be the largest.

Unlike Equity Trust, which mainly focuses on real estate, Bitcoin IRA prides itself on dealing primarily with crypto (although they have recently started selling allocated gold). This means they won’t constantly pressure you to diversify your portfolio to include other IRA-eligible assets, like stocks and bonds.

Bitcoin IRA considers crypto the optimal hedge against inflation and dollar-denominated assets like stocks and real estate. Like so many other supporters of digital currencies, they see crypto as a means to gain financial independence from the dollar-dominated economy.

How Bitcoin IRA Works

You can create an account and start investing with Bitcoin IRA in less than three minutes.

After setting up your account, you’ll have access to a customized dashboard with a digital wallet for your savings. At this point, you can fund your account like you would with a traditional self-directed IRA. You can also access live-pricing from your dashboard, and use Bitcoin IRA’s tutorials and knowledge base to get up to speed.

It can take up to five days for your account to be ready to trade. Then you can transfer funds into your account by purchasing crypto with Bitcoin IRA’s cryptocurrency exchange. These funds will then be stored in your digital wallet, where they can increase in value and potentially accrue interest.

Once your account is approved, you can use the crypto in your account for trading within the Bitcoin IRA app. You can buy, sell, and swap crypto at any time, much like trading stocks.

What Cryptocurrencies Does Bitcoin IRA Support?

Currently, Bitcoin IRA provides support for the following coins:

  • Bitcoin (BTC)

  • Ethereum (ETH)

  • Ripple (XRP)

  • Litecoin (LTC)

  • Stellar Lumens (XLM)

  • Zcash (ZEC)

  • Bitcoin Cash (BCH)

  • Ethereum Classic (ETC)

  • Digital Gold (DG)

If you like, you can also use your Bitcoin IRA account to expand your portfolio to include gold. Gold ownership rights are regulated by the New York State Department of Financial Services and fully-backed by allocated gold.

Note that only cash (USD), Bitcoin (BTC), and Ethereum (ETH) can be used to earn interest with Bitcoin IRA.

Is Bitcoin IRA Safe?

Bitcoin IRA’s security is second to none. Digital assets are stored offline with BitGo Trust, provided by BitGo Inc., the largest processor of on-chain Bitcoin transactions in the world. Site security is provided by Cloudflare, further protecting your account against hackers and thieves.

Additionally, Bitcoin IRA only works with custodians and exchanges based in the U.S. These partners all follow stringent U.S. security protocols, which means your investment is as safe as it gets.

Bitcoin IRA Fees

When you make your first investment after setting up your account, there is a one-time service fee that varies based on your investment amount. This fee is supposed to cover Bitcoin IRA’s comprehensive services, including fund rollover support, retirement account set up, and secure storage.

There is also a custodian and security fee. However, Bitcoin IRA doesn’t provide any specifics when it comes to pricing, instead suggesting that you call their representatives.

Is Bitcoin IRA Insured?

Custodial assets stored by Bitcoin IRA are insured for up to $100 million. Insurance coverage is provided by BitGo Trust through their partnership with Lloyd’s of London, one of the best insurance providers in the world. This insurance is free, but you can purchase additional insurance for up to $500 million.

Frequently Asked Questions About Bitcoin IRA

Overall, Bitcoin IRA is a fairly simple and straightforward platform. These are some questions people might have after learning about it.
Can I Buy Crypto Through a Separate Exchange to Invest in an IRA?

Unfortunately, you cannot fund your IRA with crypto you purchase through other custodians or exchanges. Bitcoin IRA provides the sole means of purchasing cryptocurrencies to fund your account with them.

This also means you cannot transfer crypto you already own into a Bitcoin IRA account. This is because the IRS requires that U.S. dollars be used to buy into a crypto-based IRA.

What Cryptocurrencies Does Bitcoin IRA Support?

Currently, Bitcoin IRA provides support for the following coins:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Ripple (XRP)
  • Litecoin (LTC)
  • Stellar Lumens (XLM)
  • Zcash (ZEC)
  • Bitcoin Cash (BCH)
  • Ethereum Classic (ETC)
  • Digital Gold (DG)

If you like, you can also use your Bitcoin IRA account to expand your portfolio to include gold. Gold ownership rights are regulated by the New York State Department of Financial Services and fully-backed by allocated gold.

Note that only cash (USD), Bitcoin (BTC), and Ethereum (ETH) can be used to earn interest with Bitcoin IRA.

Are There Minimums or Investment Caps?
There is a fairly low investment minimum of $3,000 required to open an IRA. There’s no investment cap, however, so you can invest as much money into your IRA as you like.
What Retirement Accounts Can Be Rolled Over to a Bitcoin IRA Account?

You can rollover funds from any of the following investment accounts:

  • IRA
  • Roth IRA
  • SEP IRA
  • SIMPLE IRA
  • 403b
  • 401k

Although you cannot create a crypto IRA using cryptocurrencies you’ve already purchased, rolling over funds from a traditional investment account makes it easy to add Bitcoin IRA to your retirement plan.

Does Bitcoin IRA Provide One-on-One Support?
Bitcoin IRA advertises itself as a full-service company. In addition to a free PDF guide and an extensive knowledge base, crypto specialists will be on hand to help set up your account and get you started with investing. This includes rolling over your funds from any existing retirement account, getting started with self-directed trading, and transferring your crypto to a digital wallet.
When Can I Spend the Digital Currencies From My IRA?

An IRA account is meant to be drawn upon only once you retire. As with any other IRA, spending or withdrawing funds from your account before you reach the retirement age of 59 1/2 will result in tax penalties.

However, you can still sell your funds for trading purposes. But you must either use them to reinvest or keep them in a liquid state in your BitGo wallet.

How Do I Earn Interest on Digital Currencies?

Although cryptocurrencies tend to increase in value over time, to earn interest on your holdings, you’ll need to be a part of Bitcoin IRA’s interest-earning program.

Interest rates vary from time to time, and an additional fee of $100 is required to join the program. You must also invest a minimum of $10,000 per coin to participate, and only Bitcoin and Ethereum are eligible for earning interest.

Pros & Cons of Bitcoin IRA

  • Quick and easy account creation
  • 24/7 self-directed trading platform
  • Low minimum investment requirement of just $3,000
  • Free investor guide and one-on-one support from crypto specialists
  • Nine different coins available for investment currently
  • Used by more than 50,000 account holders
  • Excellent rollover options
  • Cold (offline) digital asset storage for increased security
  • Cannot transfer existing crypto holdings into an IRA due to U.S. law
  • The inherent volatility of cryptocurrencies result in greater investment risk
  • No financial planning or advisory services
  • High setup and maintenance fees compared to other IRAs
  • Administration fees and storage charges are not transparent

Where to Go From Here

After reading our Bitcoin IRA review, you should now know everything you need to take the next step in your retirement planning.

Bitcoin IRA is the first company to provide the value of an IRA with the flexibility of crypto. Whether you’re just starting to take retirement seriously or you have a strategy already, using crypto to invest is a smart move.

Understanding cryptocurrency isn’t always easy, however. That’s where we come in. With the tools from BitCompare.net, you can become a crypto expert in no time. Check out our calculators or coin comparisons and keep learning.

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