An IRA will allow an individual to invest their money while receiving tax incentives on their capital. This permits individuals to benefit from compounding on their money as the profits get reinvested with the account, this acts as a powerful force that will help you grow your money exponentially over time.
IRAs make investing in other markets and assets accessible, allowing individuals to allocate capital in a wide variety of investment vehicles like real estate, stocks and even Cryptocurrencies like Bitcoin!
The year 2017 was probably one of the most important for the overall Crypto Market, not only their currencies grow in value like no other asset, but it also lets new players bring their money and their ideas into this new sector. The lucky ones that were able to invest early in the market saw their investment doubling in value almost every other week, something incredible to witness.
What many individuals forgot during the rush in the market was the fact that they would have to pay taxes on their investments, even if they were planning on holding the positions long term. This lead to an open discussion in terms of how to approach bitcoin investing in a cheaper and tax-friendly way. The result of this was the rise of companies offering individuals to manage their Bitcoin Investments as part of an IRA.
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From a tax perspective, it is keen to understand that the IRS considers cryptocurrencies as assets, not currencies and for this reason, they have a completely different tax structure. It is important to understand that there is no such thing as a fully dedicated Bitcoin IRA, instead what is being offered in the market is the option to create a self-directed IRA with a custodian institution.
If you are interested in diversifying a part of your retirement plan and your portfolio into Bitcoin, you may want to use this type of structure as it will make taxes and management easier. It is important to mention that while you can actively trade with a BitcoinIRA, it is key to understand that the volatility of the market makes it incredibly risky and difficult for new investors and traders.
This article will cover how a BitcoinIRA works and also the best providers available in 2020.
What is a Bitcoin IRA?
As mentioned above, many individuals commit the mistake of believing that a Bitcoin IRA is a dedicated type of retirement account. In reality, it is simply the name given to self-directed accounts that are used for Cryptocurrency investment and speculation.
The cryptocurrency market has proven to be a wild animal that does not follow traditional fundamentals and sometimes not even technicals, if you are planning on investing in a Bitcoin IRA (Self Directed Account) you should consider about all the risk associated with your investment. Even though there is a large number of firms and individuals lobbying for the adoption of bitcoin, it is still a very new technology and it still far away from reaching a massed adoption globally. Till this happens, it is very unlikely that we will see the market stabilizing with a true valuation, until then it will remain as the wild west for traders and Investors.
In an IRA you are talking about money that is needed for your retirement, if you do not have the experience, the time, or simply the knowledge to manage a portfolio properly then it would be better to aim for a fully managed account. Keep in mind that there are many other ways to learn about investments that do not incur in exposing your capital to unnecessary risk.
These are some of the most important pros and cons to remember before choosing a Self Directed IRA over another type of retirement account:
- Tax Incentives: The idea behind buying Bitcoin through an IRA is to be able to take advantage of the tax incentives offered by the US government for retirement accounts. This type of IRA will help you save money while letting your funds compound and build up over time. Imaging seeing your bitcoin investments rallying and rising in value, knowing that you would not have to pay a single dime of taxes until you retire.
- Possibility for Higher Returns: Cryptocurrencies are exotic assets, and they allow for the possibility of getting higher returns. But it is incredibly important to understand that just like profits can be higher, the risk will also be increased exponentially. Keep in mind that if you are using your IRA account for a fully speculative approach it is ok to add some extra layer of risk, on the other hand, if this is your retirement fund you should keep yourself out of the danger zone at all times.
- Wider Range of Assets: Even though a 401 allow for a higher level of contributions every year, the number of assets to invest in more narrow. While most individuals will only invest in traditional assets, it is important to understand the ability to invest anywhere else. Probably the two most peculiar asset classes would be Cryptocurrency and also Real State.
- Creditor Protection: One of the big differentiators between an IRA and a 401K is the fact that IRAs are protected against creditors. You can even declare yourself and bankruptcy without having to worry about your IRA savings being taking away from you. This acts as great insurance in case of things going south for business owners and regular individuals.
- Higher Cost than Traditional IRAS: It is not a secret that self-directed IRAs are more expensive than traditional accounts, the reason for this is that financial institutions lose their management fees and they tend to raise the other costs in order to compensate their revenue. This might sound like a shady practice but is really common in the market, and it has become the main script for companies offering Bitcoin IRAs.
- Lots of Fees: With a self-direct IRA you will have to get used to paying for absolutely every service that you receive. This might not be the ideal scenario for someone who is interested in preserving their capital but it is the way most financial institutions operate these accounts.
- Lack of Liquidity: Even though Bitcoin is actually a relatively liquid asset, the problem is that many of the exchanges that are used by these firms are not. You might have to wait even hours to get an order filled to buy and even more if you want to dump a position. This should be taken into consideration before choosing a provider.
Best Bitcoin IRA Providers:
1. BITCOIN IRA | Best for Beginner Bitcoin Investors
Bitcoin IRA is a peculiar firm because even though it offers custody of assets and also brokerage, in reality, the firm is only working as a middle partner between international custodian and exchanges. Keep in mind that this is not your traditional IRA, instead, you will be funding a kingdom trust with your Bitcoin.
This firm shines as a solid company with a great management team and also one of the best customer services available in the market. With BitcoinIRA you can sleep at night knowing that the custody of your coins will be in good hands.
Minimum Deposit: $5,000
One Time Fee: 10% of the account value
Annual Fees: 6% of the account value
- Potential for Large Gains: Not many assets can deliver triple digits results in a month after month when the market is in buying mode, this opens the door for a lot of speculation as everyone wants to be early on their investments. It is important to understand that even though Bitcoin has the potential for large gains, its previous performance is not enough to expect future gains. In reality, no one really knows if we will ever see bitcoin rallying like that never again.
- Tax Incentive: Imagine being able to invest in Bitcoin and see the coins rallying again just like they did in 2017, and to make things even better to know that you won't have to pay taxes on those gains until later in your life. The tax incentive is out there for individuals to take advantage of it, please do your research to understand if a ROTH IRA might be a better option based on your situation.
- Diversification: In times of market distress it is always necessary to aim for asset classes that do not have a correlation with the typical money markets. By doing so you can reduce the level of risk and your exposure in case something really bad happens. Cryptocurrencies fall into a safe haven category because of their zero correlation with the Stock Market, having said so keep in mind that your investment might not be affected by negativity in the financial markets but it can easily be harm by its own associated risk.
- Extreme Volatility: The same reason why everyone wants to be it is also the reason why so many individuals and experts are afraid of bitcoin investment. The entire cryptocurrency market is such a wild and volatile beast that it is uncomprehending how risky it is to invest your retirement money in it. Imaging buying an asset, seeing it rising in value 32%, then seen it decrease by almost 60%, just to finish with a rally of more than 200%. This is how volatile Bitcoin is.
- No Income Generating: Depending on your goals and your desired investment strategy, you can invest in assets that can generate income like stock dividends and bonds coupons. This acts as a great way to make money disregarding how the market is performing, and it can provide an interesting income if you have the right account size. With Bitcoin you will only be able to cash your gains once you sold your positions, it is not something that will continue giving you with getting rid of it.
- Cost: Having to pay close to 10% of management fees is something unseen in the market, it is simply unbelievable and to be honest very difficult to justify as an investor. To put it into perspective traditional IRAs with a fully managed portfolio won't charge you more than 1.5% every year.
2. COIN IRA | Overall Most Convenient
COIN IRA is another facilitator approved by the IRS to offer IRA services in the US. The firm has an agreement with some of the most important exchanges, banks, custodians and even BTC wallets in the world, this has facilitated business and grown a considerable fan base for the firm.
It is important to keep in mind that this firm is more sophisticated in terms of clients than BitcoinIRA, the reason for this is that the company is focused on wealthier individuals who are interested in investing some of their capital in Bitcoin.
This is a great company for anyone interested in starting a Trust IRA figure fully for Bitcoin and other Cryptocurrencies.
Minimum Deposit: $30,000
One Time Fee: 1% of the account value
Annual Fees: 2% of the account value
- Great Relationship with Banks: When it comes to companies offering some sort of cryptocurrency related product most financial institutions or at least the international banks try to stay away from it. Seen high caliber names offering their services as custody banks for CoinIRA proves how much they value this firm and its business model.
- Fees: The firm follows a different approach than BitcoinIRA, instead the company aims for more capital for first deposit but in exchange offers one of the cheapest BitcoinIRA accounts currently available. This company has developed its own economy of scale in terms of lowering their costs based on the managed volume and this has been translated to the final customer.
- Cash Purchases: Coin IRA also allows for individuals to buy cryptocurrency directly through them, this is great considering that on a yearly basis you can also contribute $6,000 to your IRA. If you are an individual who is deeply involved in this market, this provider will offer one of the very best experiences in terms of buying the Coins directly.
- High Minimum Fee: As mentioned before, if you can overcome the fact that you need a minimum investment of $30,000 to start then you should definitely open an account with them.
- Age: All these Crypto companies have also been around for a couple of years at the most, this makes it difficult to fully trust them. Keep in mind that Coin IRA has been rated as BBB by the major rating agencies in the US. This helps to improve the overall trust of the firm but it is still little compared to what traditional IRAs offer. It is your retirement and your future what we are talking about, I personally recommend to double check any provider before making a decision. As we stated before, it is expensive to open an account so you don't want to be rolling over your funds if it is not ultimately needed
3. Regal Wallet
The newly launched Bitcoin IRA service is a product of Regal Assets. Regal wallet allows its investors to rollover accounts such as 401k or IRA into a separate Crypto IRA.
One of the best security aspects is ensuring your key is never shared with anyone through the use of offline cold storage. Regal aspects have a rating of A+ by Better Business Bureau and boasts of over 1000 five-star reviews from a trusted review board Trustlink.
- Security: Enhanced security features using offline cold storage
- Availability: Offers a 24-hours account opening process
- Ratings: Highest attainable ratings from BCA, BBB and Trustpilot
- Educational material : High priority on educational resources
- Minimum investment: Has a minimum investment requirement
- Access to information: Visitors only get to learn administration and storage fees through communication with the company or requesting for a free kit.
A crypto broker with a dedication to Cryptocurrency IRA facilitation via a partnership with IRA custodian New Direction IRA. Blockmint focuses mostly on Bitcoin, Ethereum and Litecoin cryptocurrencies. Blockmint steps in to facilitate the buying and selling of the currencies. After a completion of an order by an investor, Blockmint executes by coordinating the funding of the transaction with New Direction IRA to execute the trade. In essence, Blockmint serves to ease the burden of transaction time, and costs for the investors.
- Simplicity: Simplifies trading of crypto currencies
- Efficiency: Manages transactions and storage between vendors on behalf of the client
- Variety: Offers Ethereum, Litecoin and bitcoin options
- Custody: Locked into IRA custodian and storage options
- Risk: A relatively new high-risk asset class I light of market volatility
High-Risk Assets | Retirement Account
One of the basic principles of investing with retirement money is that even though you want your capital to grow, you should not take a high risk with it. I know it may sound like a contradiction but in reality, it is money that you can’t take the risk of losing. Working your whole life, saving money to get a proper retirement jus to blew your opportunity in a risky trade is simply not the way to go.
It is incredibly important to understand that even though cryptocurrencies are growing in followers and adapters, it is still a very new technology that is far from being fully adopted by the world. Just like investing in internet companies could have been a one in a lifetime deal with names like Amazon, it was also one of the worst possible ideas with hundreds of names disappearing due to bankruptcy.
Not only it is a fairly new technology but the overall market has resulted to be one of the most volatile environments ever seen in the financial markets. Imagine investing in an asset that can lose 82% of its value in a matter of months, just to see that same asset soaring 700% in a similar period of time. It is easy to see why it may sound like an interesting idea to try to catch that falling knife, but the chances of getting it right are nothing compared to the risk of losing your future.
If after all the disclosure you are interested in adding some bitcoin to your portfolio, it is key to understand that sizing will be your best friend. Try to invest the least as possible, enough that you will feel comfortable but at the same time a number that won’t damage your retirement in case it goes south.
Another point I would like to bring to the table is that there is no crystal ball in the market, for this reason, I advise individuals to stay away from trying to predict tops and bottoms in the market. Doing so will only help destroy your portfolio and burn your money faster than you can even imagine. If you believe in Bitcoin and the technology behind it, you may want to consider a buy and hold approach, as mentioned before the market is so volatile that an active trading model can be even more dangerous.
High Management Fees
Many individuals commit the mistake to think that Investing in Bitcoin through an IRA is cheap as trading the cryptocurrency in a traditional exchange. In reality, BitcoinIRA acts as a custodian, and for this reason, the firm is entitled to charge expensive fees for account management and for trading.
Fees and commissions can be as expensive as 10% of the value of the account in order to get everything settled and up to 5% a year just in management fees. If you take into consideration how much money you will be spending every year for simply having this IRA, its beauty and charm start to dissipate pretty fast.
If you have a financial advisor of your trust it is important for you to talk to them in order to clear any question but also to understand if this is a good idea based on your risk profile. As mentioned before, even with a very volatile market that can perform and provide great margins of profits, it can easily tank and wipe half of your money in weeks or even days.
With such a hype in the market surrounding all the cryptocurrencies, it is easy to see why so many individuals are starting to place part of their retirement funds in such a volatile asset. One of the most used strategies currently used is to simply buy and hold bitcoin in an account, for this it is only necessary for you to understand the risk of it and to be willing to accept losing your money. By taking out the factor of suffering the ups and downs you might be able to navigate through the bad times and cash out whenever the price surpasses your entry for a profit.
It definitely sounds easy but is it not a strategy for the weak of heart. Just imagine seeing your investment losing 82% in value, sell your positions and a week later being halfway back to an all-time high. It has happened before, and it is the reason why so many bets on it happening again.
From an investor perspective, the worst flaw of these accounts and providers is the fact that they have a really high minimum to open an account. This basically forces you to invest at least $5,000 into the market, keep in mind that you can always decide to invest less money in a regular Bitcoin Wallet and simply pay for your taxes on it. It might be a good way if you want some exposure without having to risk so much money in this erratic market.
Comments from the industry
During a recent conversation with LearnBonds.com, Chris Kline, the chief operating officer (COO) of Bitcoin IRA, explained that they are very bullish about the future of the cryptocurrency market.
Bitcoin IRA is a revolutionary company that offers cryptocurrency services and Individual Retirement Accounts (IRA) in digital assets.
In this interview, Mr. Kline has also talked about China and how Facebook’s Libra could disrupt global commerce as well.
1. There are just a few Bitcoin / Crypto IRA services in the market, how did you come up with this idea of creating Bitcoin IRA?
We have been in the alternative asset space for nearly 10 years. Previously we helped individuals invest in real estate, businesses, gold and other precious metals for their retirement account. In 2014 we started hearing the early groundswell of chatter around crypto. Bitcoin has similar qualities to gold as a store of value and many believe it can be a hedge against another economic meltdown so it made sense to expand our offerings into crypto. It took about 18 months to build the first turn-key solution that fit the individual retirement account (IRA) world, and we’ve been evolving and growing ever since our 2016 launch.”
2. Do you have any forecasts for how much the Bitcoin IRA industry will grow in the future?
“Market and regulatory conditions in 2018 really thinned out the crypto individual retirement account herd of 2017. It will be interesting to see who grows, who innovates and who carries this niche industry forward. Our goal is to be the continued catalyst of the product we created.”
3. How is Bitcoin IRA dealing with the large volatility inherent to the cryptocurrency market?
“Account holders self-direct their transactions through our technology platform. Battling volatility requires unlimited access for account holders. The launch of our 24/7 Self-Trader and its continued uptime gives our clients real control.
Also, the addition of instant cryptocurrency swaps in August eliminates settlement delays. A client wanting to swap from Bitcoin to Ethereum can now do it instantly 24/7.”
4. You have recently announced a new service that allows customers to lend their retirement assets for interest. What was the main reason that pushed you to launch this service?
“The cryptocurrency market must mature into a comfortable place for everyday folks. Banks pay (albeit very small) interest on deposits. People are used to this. Why not the same for their crypto? By building mainstream applications, our company can help drive further mass adoption.
Since we’re focused on retirement accounts where users typically hold for longer periods of time, earning interest during that period can be a windfall. We’re allowing people to earn on their crypto or cash positions and it’s an exciting new product.”
5. Bitcoin IRA processed over $350m in investments for more than 4,000 clients. Do you think you can reach $1bn and amass 10,000 clients in the near future?
“Most certainly. Our upcoming product rollouts and major crypto events like Bitcoin halving, China’s federal cryptocurrency and Facebook’s Libra on the horizon we see the future as very promising for our company and all crypto investors.”
6. Retirement funds are being affected by low interest rates imposed by Central Banks in different jurisdictions. Do you think a small allocation in Bitcoin could eventually help the pension system?
“I am not a financial advisor, but I am personally a big proponent of the “get off zero” movement that suggests every pension fund, endowment, money manager, private capital firm, individual, etc should at least consider a small position in crypto, especially given the returns we’re seeing. If crypto is a hedge against a market downturn too, then it can be a strong asset for a balanced portfolio strategy with traditional stocks, brokers and other investments.”
7. At the moment, you are offering support for Bitcoin, Ethereum, Ripple’s XRP, Litecoin, Bitcoin Cash and Ethereum Classic. Are you planning to add support to other cryptocurrencies in the future?
“We’re taking the conservative approach with adding new coins to our platform. We don’t want to offer smaller coins that may later be determined to be a scam, lose liquidity or have significant concerns by government regulators in the future. This is a sensitive space and we’re taking the cautious approach.”
8. Which are the main challenges that Bitcoin IRA is facing with regulators?
“The entire industry faced significant challenges from fresh regulation for the last couple years now. And it was important for long-term growth of the space.
We find ourselves in very collaborative relationships with regulatory entities. We’ve always been extremely transparent and available for their questions and requests. Over time, we’ve become a resource for them in this young and growing industry.“
9. You mentioned Facebook’s Libra, what is your opinion on it? Are you open to offer support to it in the future?
“Libra will be a major disruptor to global commerce. While it still needs to be vetted through regulators, expect it to create friction-less cross-border transactions at significantly lower fees for merchants and other participants.
Facebook’s active user base is more than 2 billion, larger than most countries, so it may provide sweeping change to our society. Bitcoin and other cryptos should see more inflows as users become familiar with the crypto ecosystem – bitcoin wallets, keys, bitcoin exchanges, etc. – and learn the benefits of decentralized money.
Will we offer it? Very likely.”
10. Which are Bitcoin IRA plans for the coming two years?
“We’re excited about our launch of interest-earning accounts which are rolling out now to select groups of our customers. This is an industry first for retirement accounts and a major benefit to our clients. Beyond that, we have a long roadmap of projects that focus on our core mission of helping Americans retire early.”
Glossary of Investment Terms
A bond is a loan made to an organization or government with the guarantee that the borrower will pay back the loan plus interest upon the maturity of the loan term. It can be advanced to the national government, corporate institutions, and city administration. It is an investment class with a fixed income and a predetermined loan term.
A mutual fund is a professionally managed investment vehicle that pools together funds from numerous investors and invests it in such securities as stocks, bonds, and other money market instruments. They are headed by portfolio managers who determine where to invest these funds. They are highly regulated and invest in relatively low-risk money markets and in turn post lower rates than other aggressive managed funds.
Peer-to-peer lending (p2p lending) is a form of direct-lending that involves one advancing cash to individuals and institutions online. A P2P lending platform, on the other hand, is an online platform connecting individual lenders to borrowers.
Bitcoin is the legacy cryptocurrency developed on the Bitcoin Blockchain technology. It is a new form of money primarily developed to solve some of the inherent challenges associated with fiat currencies like inflation and over-production. It is virtual (online) cash that you can use to pay for products and services from bitcoin-friendly stores.
An index fund refers to the coming together of individuals to pool in funds that are then invested in the stock and money markets by professional money managers. The only difference between an index fund and a mutual fund is that the index fund follows a specific set of rules that track specific investments and index stocks.
An Exchange-traded fund refers to an investment vehicle that is publicly traded in the stock exchange markets – much like shares and stocks. The fund is expert-managed and its portfolio comprises of such investment products as stocks, bonds, commodities, and more money market instruments like currencies.
Retirement refers to the time you spend away from active employment and can be voluntary or occasioned by old age. In the United States, the retirement age is between 62 and 67 years.
Penny Stocks refer to the common shares of relatively small public companies that sell at considerably low prices. They are also known as nano/micro-cap stocks and primarily include any public traded share valued at below $5.
Real Estate can be said to be the land and buildings on a given property as well as other rights associated with the use of the property like the air rights and underground rights. Real estate can be either commercial if the land, property, and buildings are used for business purposes or residential if they are used to non-business purposes – like building a family home.
REITs are companies that use pooled funds from members to invest in income-generating real estate projects. While a REIT may specialize in one real estate niche, most diversify and invest in as many high-income real estate projects as possible. They are especially interested in commercial real estate projects like warehouses, prime office buildings, residential apartments, hotels, timber yards, and shopping malls.
Asset simply refers to any resource of value or a resource that can be owned and controlled to produce positive value by an individual or business.
A broker is an intermediary to a gainful transaction. It is the individual or business that links sellers and buyers and charges them a fee or earns a commission for the service.
Capital gains refer to the positive change in the price of a capital asset like shares and stock, bonds or a real estate project. It is the difference between the current selling price of the asset and its lower original buying price and it is considered a taxable income.
A hedge fund is an investment vehicle that pools together funds from high net worth individuals and businesses before having professional money managers invest it in highly diversified markets. The difference between mutual and hedge funds is that the later adopts highly complicated portfolios comprised of more high-risk high-return investments both locally and internationally.
An index simply means the measure of change arrived at from monitoring a group of data points. These can be company performance, employment, profitability, or productivity. Observing a stock index, therefore, involves measuring the change in these points of a select group of stocks in a bid to estimate their economic health.
A recession in business refers to business contraction or a sharp decline in economic performance. It is a part of the business cycle and is normally associated with a widespread drop in spending.
Taxable Account refers to any investment account that invests in shares and stocks, bonds and other money market securities. The account is offered by a brokerage company and you are obliged to report and pay taxes on the investment income each year.
A tax-advantaged account refers to savings of investment accounts that enjoy such benefits as a tax exemption or deferred tax payment. Roth IRA and Roth 401K are examples of tax-exempt accounts whose contributions are drawn from after-tax incomes with the yields generated from investing funds therein being tax-exempt. Traditional IRA, 401K plan and college savings, on the other hand, represent tax-deferred accounts. Their contributions are deductible from your current taxable incomes but you get to pay taxes on their accrued incomes.
Yield simply refers to the returns earned on the investment of a particular capital asset. It is the gain an asset owner gets from the utilization of an asset.
A custodial account is any type of account that is held and administered by a responsible person on behalf of another (beneficiary). It may be a bank account, trust fund, brokerage account, savings account held by a parent/guardian/trustee on behalf of a minor with the obligation to pass it to them once they become of age.
An Asset Management Company (AMC) refers to a firm or company that invests and manages funds pooled together by its members. Like mutual or hedge funds, the AMC creates diversified investment portfolios that comprise of shares and stocks, bonds, real estate projects, and other low and high-risk investments.
A registered investment advisor is an investment professional (an individual or firm) that advises high-net-worth (accredited) investors on possible investment opportunities and possibly manages their portfolio.
The fed rate in the United States refers to the interest rate at which banking institutions (commercial banks and credit unions) lend - from their reserve - to other banking institutions. The Federal Reserve Bank sets the rate.
A fixed-income fund refers to any form of investment that earns you fixed returns. Government and corporate bonds are prime examples of fixed income earners.
A fund may refer to the money or assets you have saved in a bank account or invested in a particular project. It may also refer to the collective basket of resources pooled from different clients that are then invested in highly diversified income-generating projects.
Value investing is the art of using fundamental analysis to identify undervalued shares and stocks in the market. It involves buying these shares at the current discounted prices and hoping that a market correction pushes them up to their intrinsic value effectively resulting in massive gains.
Impact investing simply refers to any form of investment made with the aim of realizing financial returns while positively impacting the society, environment or any other aspect of life in the process. Investment in solar projects and green energy, for instance, posts profits and helps conserve the environment.
An investment App is an online-based investment platform accessible through a smartphone application. It lets you save and invest your funds in a preset portfolio that primarily consists of shares and stocks, bonds, ETFs, and currencies based on your risk tolerance.
Real Estate crowdfunding is a platform that mobilizes average investors – mainly through social media and the internet – encourages them to pool funds, and invests them in highly lucrative real estate projects. It can be said to be an online platform that brings together average investors and lets them enjoy real estate projects previously preserved for high net worth and institutional investors.
What types of IRA can be rolled into a Bitcoin IRA ?
Rollover into BitcoinIRA accounts is available for all IRAs, having said so you should take into account that ROTH IRAs will have a different treatment. Don't forget that there is a high cost associated with this rollover, it is important to be sure about the transition before incurring in such an expensive process.
Is there a minimum investment or account size?
Most Bitcoin IRA providers request a minimum capital of $5,000 to open an account. Take into consideration the fact that the maximum contribution to IRAs in one year is $6,000, opening a Bitcoin IRA won't leave much room to invest in other IRAs. Note that any Individual can own as many IRAs as desired, the only restriction would be in the total contribution made as a whole.
Are there other Cryptocurrencies offered for IRAs ?
Note that there are literally hundreds of new cryptocurrencies being created every month, you might not be able to find an ALTCOIN in most IRA providers but you will certainly get access to the top cryptocurrencies in the world. Some of the coins that are available are: Bitcoin Ethereum XRP Litecoin BitcoinCash Most providers are always updating their lists based on the market capitalization and the demand for specific coins.
How long do I have to wait to retrieve my funds?
IRA funds are not available for withdrawal until the age of 59½, after this age you will be able to withdraw as much money as you want without having to worry about paying a 10% penalty over your funds. It is important to mention that if you choose to use a ROTH IRA account, money contributed would be after-tax cash which means that it would be yours to withdraw at any time and at any age, the only restriction would be that you won't be able to cash out your profits until retirement age.
What is a Self Directed IRA?
A Self Directed IRA acts more like a custodian for your assets than a traditional retirement account, the reason for this is that the chosen firm will only provide you with a broker to buy and sell the instruments but it will be self-management. Even though the idea of managing investments and a portfolio by yourself tends to lure individuals into acquiring this types of accounts, it is important to be objective about the knowledge and skills required to survive the financial markets.
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