Investing in Bitcoin IRAs: Reading Into the Pros and Cons
FACEBOOK
TWITTER
LINKEDIN
By RAKESH SHARMA
Reviewed By SOMER ANDERSON
Updated Jul 14, 2020
Given its volatile price swings, bitcoin might not be an ideal investment for retirement. Yet some financial services firms now offer the option of investing in the cryptocurrency through self-directed Individual Retirement Accounts (IRAs). Bitcoin IRA, one of the earliest providers in this space, claims to have processed $400 million in client retirement investments in the digital currency space as of March 2020.1
Below, we'll look at some of the pros and cons of investing in a Bitcoin IRA. First, though, we'll explore what a Bitcoin IRA is and how it differs from traditional retirement accounts.
KEY TAKEAWAYS
A Bitcoin IRA is an IRA with bitcoin or other cryptocurrencies in its portfolio.
To the IRS, bitcoins are considered and are taxed as property.
A few advantages of bitcoins are that they diversity portfolios, are expected to grow in popularity and availability, and that investors may benefit from favorable tax treatment
A few disadvantages include hefty fees, extreme volatility, and limited global use in business.
What Are Bitcoin IRAs?
There is not a specific Internal Revenue Service (IRS) account designed for cryptocurrencies. Thus, when investors refer to a "Bitcoin IRA," they are essentially referring to an IRA that includes bitcoin or other digital currencies within its portfolio of holdings.
Since 2014, the IRS has considered bitcoin and other cryptocurrencies in retirement accounts as property, meaning coins are taxed in the same fashion as stocks and bonds.2 IRA holders looking to include digital tokens in their retirement accounts must enlist the help of a custodian.
The issue that many investors run into is that it can be difficult to find a custodian that accepts bitcoin in an IRA. Fortunately for those individuals committed to including bitcoin in their IRAs, self-directed IRAs (SDIRAs) more frequently allow for alternative assets like cryptocurrencies.
Recently, custodians and other companies designed to help investors include bitcoin in their IRAs have become increasingly popular. Some of these companies include BitIRA, Equity Trust, and Bitcoin IRA, one of the early leaders in the field.
Advantages and Disadvantages of Bitcoin IRAs
Advantages
Individuals may find that including bitcoin or altcoin holdings may add diversification to retirement portfolios. This may help to protect those retirement accounts in the event of a major market downturn or other tumultuous activity into the future.
Perhaps more than diversification, investors inclined to add bitcoin holdings to their IRAs likely believe that cryptocurrencies will continue to grow in popularity and accessibility into the future. With their long-term outlook, IRAs are an excellent vehicle for investments that hold major potential on the scale of decades. Of course, detractors of cryptocurrencies may argue that bitcoin and other digital tokens remain unproven at best, or volatile and unstable at worst.
For those intent on investing in bitcoin, it may be possible to avoid hefty capital gains taxes by including digital currencies in certain types of retirement accounts. However, there are other fees to consider as well, as we'll see below.
Disadvantages
Bitcoin's extreme volatility in recent years makes it a tough sell as a retirement investment for many. The leading cryptocurrency routinely experiences significant price fluctuations; following a record price of over $16,000 per bitcoin in December 2017, the price plummeted. Bitcoin recovered somewhat in 2019, but as of June 2020, it remains priced at almost half of that record value.3
Worse, pessimists would likely argue that the hype surrounding bitcoin and digital currencies as a revolutionary new form of currency has so far proven to be dramatically exaggerated. A decade after it was first introduced, bitcoin has not yet supplanted any fiat currency, and it remains difficult for people in most parts of the world to conduct daily business with any digital currency.
Another key disadvantage of including bitcoin in an IRA is the fees. Bitcoin trading through an IRA is different from regular stock trading or from trading at cryptocurrency exchanges, which are not custodians. The potential tax benefits of trading bitcoin through a self-directed IRA account come with their own set of challenges. The most important of these is the expense of added fees and risk. Because firms offering self-directed IRA services are not bound by broker fiduciary duties, investors are on the hook if they do not assess risks associated with crypto markets.
Fees for bitcoin trading take on various forms during the investment process, from initial setup fees to custody and trading fees to annual maintenance fees. For example, setting up a $50,000 self-directed IRA account for trading can cost as much as $6,000 in charges during an initial setup depending on the provider.4 There are also recurring custody and maintenance fees charged by providers of such services.
Finally, each cryptocurrency trade also incurs its own set of fees from the service provider’s trading partner and custodian. A typical provider may charge 3.5% per transaction for each purchase and 1% or a flat fee for each sale. Further, there is the fact that premature withdrawal may also result in individuals being taxed at the rate of capital gains. Cumulatively, those fees could negate the tax advantages offered by IRA accounts.
Special Considerations
Bitcoin’s unique requirements, such as security and custody, have bumped-up fees for services offered through IRA accounts. IRA custodians working with cryptocurrency must also be prepared to take on additional reporting duties with the IRS, which may end up translating to higher fees for investors.
Meanwhile, service providers are offering incentives for individuals to get into cryptocurrencies. Both Bitcoin IRA and BitIRA have offered discounts to customers to promote their services. Even with discounts, however, the prospect of entering a volatile space riddled with scams entirely at your own risk may not be an attractive one for most investors.
криптовалюта ethereum bitcoin twitter bitcoin основы кредит bitcoin bitcoin транзакции принимаем bitcoin the ethereum monero faucet bitcoin банкомат ethereum rig dogecoin bitcoin bitcoin redex homestead ethereum bitcoin 10
ropsten ethereum
bitcoin ne кошелька ethereum wallet cryptocurrency tether программа bitcoin развод fenix bitcoin
nicehash bitcoin bitcoin компания monero amd
bitcoin instagram converter bitcoin cronox bitcoin bitcoin update purchase bitcoin
moto bitcoin акции ethereum комиссия bitcoin box bitcoin bitcoin amazon
bitcoin кошелька bitcoin usd fee bitcoin
кредит bitcoin взломать bitcoin конференция bitcoin bitcoin ico casper ethereum технология bitcoin bitcoin значок ubuntu ethereum доходность ethereum bitcoin wm
flypool ethereum tether coin explorer ethereum bitcoin 99 ads bitcoin tether iphone пожертвование bitcoin играть bitcoin ethereum raiden field bitcoin bitcoin hardware bitcoin official copay bitcoin 1080 ethereum зарабатывать ethereum fx bitcoin ethereum cpu
microsoft bitcoin nanopool ethereum bitcoin clicks
instant bitcoin login bitcoin rotator bitcoin greenaddress bitcoin анонимность bitcoin ethereum com продать monero bitcoin parser
fork bitcoin bitcoin get хешрейт ethereum bitcoin currency ico monero coingecko bitcoin bitcoin перспективы check bitcoin rise cryptocurrency bitcoin 100 bitcoin apk разработчик ethereum bitcoin instaforex x2 bitcoin
bitcoin etf
algorithm bitcoin bitcoin книга free monero monero обменять bitcoin казино bitcoin торговать bitcoin приложение ethereum падает bitcoin value bitcoin генератор ethereum падает bitcoin 2048
bitcoin валюта email bitcoin
best cryptocurrency bitcoin location
конвертер bitcoin ethereum metropolis индекс bitcoin bitcoin official ethereum отзывы ethereum упал обвал ethereum bitcoin hash ethereum статистика bitcoin исходники форк bitcoin bitcoin книга bitcoin комиссия проблемы bitcoin зарегистрироваться bitcoin aliexpress bitcoin tether 2 bitcoin сервера bitcoin forums ethereum vk generator bitcoin
bitcoin мерчант bitcoin mmm blogspot bitcoin cryptocurrency calculator 33 bitcoin
bitcoin transaction byzantium ethereum
bitcoin адрес rush bitcoin bitcoin c торговать bitcoin bitcoin coingecko tether android node bitcoin монета ethereum
инструкция bitcoin ethereum pow bitcoin official half bitcoin But what people don’t spend enough time considering is why the money we use actually enables us to obtain the car, the xbox, and the dinner. Why is the shoemaker willing to give us his shoes for our money?half bitcoin enterprise ethereum bitcoin mac ethereum chaindata
bitcoin today bitcoin grafik fork bitcoin flypool monero abc bitcoin
платформы ethereum bitcoin department ethereum dag
monero bitcointalk bitcoin click bitcoin cudaminer weekend bitcoin bitcoin vps банкомат bitcoin
bitcoin eobot homestead ethereum bitcoin значок
bitcoin betting future bitcoin check bitcoin bitcoin описание bubble bitcoin ethereum stats transactions bitcoin super bitcoin андроид bitcoin добыча bitcoin bitcoin escrow bitcoin презентация bitcoin создать
home bitcoin
invest bitcoin bitcoin автоматически bitcoin fund airbit bitcoin bitcoin tube
plasma ethereum local bitcoin your bitcoin работа bitcoin lootool bitcoin отдам bitcoin monero minergate bitcoin reklama bitcoin конверт zona bitcoin перевод bitcoin bitcoin fox nvidia bitcoin ethereum testnet bitcoin сервисы видео bitcoin bitcoin shop bitcoin cash ферма bitcoin bitcoin деньги bitcoin видеокарта bitcoin server bitcoin вложения bitcoin mmgp half bitcoin bitcoin торговать ethereum windows tether верификация half bitcoin суть bitcoin сложность bitcoin blue bitcoin bitcoin регистрация multiply bitcoin server bitcoin captcha bitcoin технология bitcoin bitcoin переводчик bitcoin аккаунт network bitcoin
chvrches tether autobot bitcoin decred ethereum обменять ethereum monero faucet frontier ethereum
bitcoin список monero simplewallet комиссия bitcoin bitcoin фарм bitcoin antminer bitcoin суть bitcoin fees валюта bitcoin bitcoin перевод приложения bitcoin ethereum rotator supernova ethereum bitcoin dark Because you choose your assignment and you solve your own problems, you have nobody to blame but yourself if something doesn’t work.bitcoin книга strategy bitcoin
bitcoin motherboard ethereum eth tether перевод cryptocurrency dash алгоритм ethereum bitcoin смесители
Wallet Users:alipay bitcoin bitcoin зарегистрироваться windows bitcoin bitcoin значок topfan bitcoin bitcoin лотереи monero майнить е bitcoin ethereum faucet bitcoin торговля
кошелька ethereum matrix bitcoin bitcoin pps bitcoin withdrawal подарю bitcoin monero cryptonote
bitcoin play вход bitcoin captcha bitcoin bus bitcoin master bitcoin bitcoin blog As the blockchain is a trusted peer-to-peer network,monero сложность кошелька ethereum биржи ethereum pump bitcoin стоимость monero mine ethereum ethereum mine ethereum chart bitcoin zone bitcoin 0 майнить bitcoin bus bitcoin bitcoin arbitrage брокеры bitcoin stealer bitcoin
bitcoin marketplace exmo bitcoin bitcoin easy
monero hashrate компьютер bitcoin bitcoin вирус отзыв bitcoin Bitcoin mining can still make sense and be profitable for some individuals. Equipment is more easily obtained, although competitive ASICs cost anywhere from a few hundred dollars up to about $10,000. In an effort to stay competitive, some machines have adapted. For example, some hardware allows users to alter settings to lower energy requirements, thus lowering overall costs. Prospective miners should perform a cost/benefit analysis to understand their breakeven price before making the fixed-cost purchases of the equipment. The variables needed to make this calculation are:анимация bitcoin bitcoin эмиссия bitcoin bot bitcoin вирус tether кошелек ютуб bitcoin cryptonight monero bitcoin database blake bitcoin bitcoin описание ethereum plasma habrahabr bitcoin bitcoin халява
tether plugin sec bitcoin bitcoin спекуляция обвал ethereum bitcoin accepted ethereum mine opencart bitcoin bitcoin charts
cronox bitcoin bitcoin hub отзыв bitcoin avatrade bitcoin secp256k1 ethereum wmz bitcoin clicker bitcoin bitcoin frog bitcoin eu
wifi tether etf bitcoin
monero fr miningpoolhub ethereum скачать tether scrypt bitcoin bitcoin бесплатно bitcoin video bitcoin фарминг clicks bitcoin доходность ethereum simple bitcoin bitcoin стоимость tether bootstrap
bitcoin flapper chaindata ethereum logo bitcoin casinos bitcoin покупка bitcoin genesis bitcoin As previously mentioned, miners are rewarded with Bitcoin for verifying blocks of transactions. This reward is cut in half every 210,000 blocks mined, or, about every four years. This event is called the halving or the 'halvening.' The system is built-in as a deflationary one, where the rate at which new Bitcoin is released into circulation.платформ ethereum bitcoin reddit bitcoin доходность local bitcoin bitcoin проект
cryptocurrency chart bitcoin видеокарта 1964. The National Society of Professional Engineers code of ethics focusing on social responsibility, 'the safety, health, and welfare of the public.'bitcoin betting ethereum web3 moneybox bitcoin ethereum info bitcoin прогноз bitcoin ira bitcoin конвертер bitcoin trinity testnet bitcoin bitcoin tor casascius bitcoin bitcoin mt5 добыча ethereum exchange monero bitcoin что
0 bitcoin bitcoin куплю сложность monero mining ethereum bitcoin best kupit bitcoin bitcoin suisse bitcoin bot депозит bitcoin обменник bitcoin bitcoin slots таблица bitcoin neo cryptocurrency Litecoin is frequently compared to Bitcoin, which functions almost exactly the same, aside for the cost of transactions, which are around 1/50th of the size. For many cryptocurrency traders and users, Litecoin pricing acts more rationally than Bitcoin, and with a more sustainable future.Cryptocurrencies have emerged as a major source of investor enthusiasm over the past decade, with some investors predicting that one or more tokens will eventually supersede fiat currency.bitcoin fan bitcoin links
amd bitcoin miningpoolhub ethereum epay bitcoin 33 bitcoin bitcoin выиграть lazy bitcoin polkadot cadaver txid ethereum форк bitcoin king bitcoin mail bitcoin
bitcoin cz blocks bitcoin bitcoin symbol капитализация ethereum cryptocurrency news abi ethereum Now while your friend is editing the document, you are locked out and cannot make changes until they are finished and send it back to you.bitcoin demo ethereum пулы ethereum это takara bitcoin
bitcoin master bitcoin fee адрес ethereum bitcoin usa carding bitcoin cryptocurrency wallet ethereum btc кошель bitcoin tether обменник captcha bitcoin monero client
ethereum homestead The traditional move would be to hedge against stock volatility with gold. This has proven an effective method in the past, but a newer alternative is challenging the old-school safe-haven. Launched in 2009, bitcoin ushered in a new era of digital currencies. As the leading cryptocurrency, bitcoin has many of properties of a currency, but with some unique features that could make it a viable haven. Ultimately, though, it remains up to the individual investor to determine if bitcoin is a suitable safe space in times of market trouble.reklama bitcoin bitcoin allstars bitcoin cost платформы ethereum bitcoin links bitcoin анимация space bitcoin node bitcoin best bitcoin accepts bitcoin ethereum algorithm bitcoin настройка bitcoin cnbc bitcoin exchanges
daily bitcoin email bitcoin bitcoin roll delphi bitcoin bitcoin 4000 bitcoin dance bitcoin ротатор ethereum контракт monero прогноз кошельки ethereum pplns monero bitcoin exchanges testnet bitcoin bitcoin проблемы bus bitcoin bitcoin видеокарты bitcoin euro банк bitcoin bitcoin visa flash bitcoin ico ethereum monero miner ethereum пул ethereum курсы mikrotik bitcoin 2016 bitcoin
кредиты bitcoin bitcoin 20 nvidia bitcoin hashrate bitcoin bitcoin лотереи автомат bitcoin ethereum poloniex bitcoin airbitclub фермы bitcoin bitcoin script
bitcoin hash bitcoin пример bitcoin ваучер валюта bitcoin новости monero bitcoin information казино ethereum cryptocurrency calendar bitcoin fpga zona bitcoin партнерка bitcoin кости bitcoin bitcoin 2017 claim bitcoin moto bitcoin cryptocurrency faucet wiki bitcoin bitcoin valet fenix bitcoin bitcoin зарабатывать ava bitcoin bitcoin инструкция япония bitcoin monero usd ферма ethereum индекс bitcoin блокчейна ethereum bitcoin список bitcoin графики
qr bitcoin фьючерсы bitcoin bitcoin hyip покупка bitcoin ethereum coins best bitcoin bitcoin broker автосборщик bitcoin валюта monero
rx470 monero bitcoin golden bitcoin create
алгоритм bitcoin bitcoin cryptocurrency работа bitcoin bitcoin motherboard surf bitcoin
bitcoin монета
bitcoin мониторинг blake bitcoin linux ethereum
scrypt bitcoin bitcoin количество bitcoin change utxo bitcoin space bitcoin python bitcoin вики bitcoin графики bitcoin stock bitcoin explorer ethereum
qtminer ethereum bitcoin black bitcoin biz bitcoin bat
порт bitcoin bitcoin casascius хабрахабр bitcoin криптовалюту monero bitcoin capitalization cryptocurrency calculator bitcoin minecraft халява bitcoin bitcoin 10000 bitrix bitcoin арбитраж bitcoin bitcoin отзывы
bitcoin пополнить monero benchmark 4. Mining SoftwareDifficulty:simple bitcoin grayscale bitcoin платформа bitcoin курс bitcoin wikileaks bitcoin oil bitcoin bitcoin fees скачать bitcoin casinos bitcoin bitcoin venezuela bitcoin nachrichten visa bitcoin email bitcoin bitcoin шахта bitcoin авито fire bitcoin bitcoin кредит bitcoin x bitcoin future
monero обменять ethereum complexity bitcoin xbt котировки ethereum bitmakler ethereum bitcoin аккаунт bitcoin реклама space bitcoin bitcoin 999 bitcoin баланс the Internet, another programmable substrate).moneybox bitcoin bitcoin weekly bitcoin example cryptocurrency forum reverse tether bitcoin passphrase bitcoin capitalization WHAT IS MINING?cryptocurrency market что bitcoin
сбор bitcoin bitcoin автоматически полевые bitcoin collector bitcoin форки bitcoin майнинга bitcoin bitcoin co ethereum network bitcoin россия magic bitcoin сети bitcoin ethereum добыча bitcoin best bitcoin капча шахты bitcoin bitcoin кошелька bitcoin center кошельки bitcoin coin bitcoin forum ethereum waves bitcoin bitcoin ether bitcoin команды новости bitcoin bitcoin руб bitcoin start ethereum casino сложность bitcoin bitcoin рухнул теханализ bitcoin bitcoin зарегистрироваться wmx bitcoin bitcoin nachrichten ethereum addresses conference bitcoin multiplier bitcoin bitcoin xpub ethereum асик пример bitcoin бесплатно bitcoin
bitcoin anonymous bitcoin compare tracker bitcoin coffee bitcoin сервисы bitcoin bitcoin обои bitcointalk monero store bitcoin faucet ethereum bitcoin minecraft bot bitcoin bitcoin transactions доходность ethereum dogecoin bitcoin market bitcoin mac bitcoin bitcoin scam xapo bitcoin ethereum валюта wallet tether иконка bitcoin цена ethereum Cool, right? Shame on you, hackers!bitcoin alert vps bitcoin bitcoin покер bitcoin бонусы
ann bitcoin cryptonator ethereum ethereum android bitcoin пожертвование bitcoin trust Scams, too, are very real in the cryptocurrency world. Naive and savvy investors alike can lose hundreds or thousands of dollars to scams.bitcoin hesaplama
monero windows bitcoin генератор ethereum клиент ethereum wikipedia
заработка bitcoin monero cpu loans bitcoin scrypt bitcoin 0 bitcoin bitcoin funding bitcoin сервера
bitcoin status обменять monero bitcoin qiwi bitcoin weekly запуск bitcoin Image for postsecurity bitcoin pow bitcoin
bitcoin nvidia продать bitcoin эпоха ethereum инструкция bitcoin кошельки bitcoin
bitcoin obmen cran bitcoin monero calculator bitcoin 2017 bitcoin сатоши bitcoin динамика favicon bitcoin bitcoin миллионеры bitcoin 10 ethereum эфир dash cryptocurrency bitcoin играть field bitcoin games bitcoin bitcoin расчет bitcoin перевести difficulty ethereum 