Top 5 Bitcoin IRA companies: 5 things to know before investing
#1 My Digital Money:
Full-Service IRA: Yes
Fees: 1.9% per transaction
Offers Other Alternative Assets: No
Storage: Cold storage
Headquarters: Pasadena, CA
#2 Bitcoin IRA:
Full-Service IRA: Yes
Fees: $240 annually + 10-15% on initial investment + 1% per trade
Offers Other Alternative Assets: No
Storage: Cold storage
Headquarters: Sherman Oaks, CA
#3 BitIRA:
Full-Service IRA: Yes
Fees: $195 annually + 0.05% monthly storage fee
Offers Other Alternative Assets: No
Storage: Cold storage
Headquarters: Burbank, CA
#4 Broad Financial:
Full-Service IRA: Yes
Fees: $300 annually
Offers Other Alternative Assets: Yes
Storage: Cold storage
Headquarters: Montvale, NJ
#5 Coin IRA:
Full-Service IRA: No
Fees: 1% per sell, 1.25% per buy
Offers Other Alternative Assets: No
Storage: Cold storage
Headquarters: Woodland Hills, CA
There are plenty of reasons why you might be more than a little concerned about your retirement savings these days. The U.S. bond yield curve is inverted—an economic event that has preceded every recession in U.S. history—and the New York Times says that it’s about to get even worse. Interest rates are currently at generational highs, creating devastating credit conditions for many American families. According to JPMorgan analysts, we are likely headed for a recession by the end of 2023 or early 2024.
While inflation has finally started to cool down, there’s no denying that Americans are finding life more and more unaffordable. It’s no wonder why more American families than ever are reporting that their salaries aren’t keeping pace with the cost of living—inflation, unlimited government spending, and economic mismanagement are all to blame.
(IronMonk Solutions via AmericanCompass, sponsored) Major Costs for a Middle-Class Family of Four vs. Median Male Income.
Energy and commodity prices have soared to record highs within the last year, and it costs more to heat and power one’s home today than it has in decades. Simply put, many of us can’t afford to make ends meet, and no amount of governmental intervention appears to be working.
If a recession were to hit, who knows what kind of price we would have to pay?
The economic indicators of a recession are looming, and they aren’t getting any better. Gasoline prices are about 61.5% higher than they were only a few years ago. In July, the national average price at the pump surged by over 4 cents in a single day—a rare economic event that usually suggests that something has gone wrong in the international supply chain.
When fuel prices rise, the rest of the economy feels the effects. That’s because transporting goods to market requires fuel for vehicles. Every recession might not be led by a sharp rise in fuel prices, but a rise in oil prices of 50% or more has nearly always been followed by a recession.
(IronMonk Solutions via Bianco Research Twitter, sponsored) Surge in Energy Prices Suggest High Probability of Recession.
Given the multitude of negative economic signs in the economy, it’s a small wonder why the Bankrate Economic Indicator survey puts the odds of a recession by July 2024 at 59 percent.
If you’re nervous about your IRA and wondering how you can protect your life’s savings, you’re not alone. The good news is that many investors choose to protect against economic risks by diversifying their portfolios with recession-resistant investment assets. Namely, physical assets like gold and silver have a long history of outperforming stocks, bonds, and other conventional assets during most recessions and market downturns.
To manage risk, retirement investors often choose to add precious metals such as gold to their IRAs by working with IRS-approved custodians, brokers, and storage experts.
But are you aware that you can now do this with Bitcoin too?
What is a Bitcoin IRA?
Gold IRAs and Silver IRAs are retirement accounts that hold some of their value in precious metals. Bitcoin IRAs work the same way, by holding Bitcoin or other cryptocurrencies as an investment asset.
Although Bitcoin IRAs have only recently become an option for investors, more and more people are electing to create one in order to diversify their portfolios and limit their exposure to systemic market risks. They also can provide impressive upside potential for those looking to make a handsome profit—for instance, Bitcoin appreciated an incredible 103.95% between July 16, 2021, and November 12 of the same year.
(IronMonk Solutions via Statista, sponsored) The price of Bitcoin in USD from 2013-2023
Throughout its history, Bitcoin prices have volleyed up and down. The Bitcoin market has enjoyed large bull runs where many investors cashed out with new fortunes, and downturns where investors were stuck waiting for the next bull run.
The key is that Bitcoin prices generally do not reflect stock market prices or have any strong relationship to economic indicators. In a way, Bitcoin operates in a world of its own. For that reason, it is often sought after as a way to spread risk around within a diversified portfolio.
According to market research, the cryptocurrency market is growing at a rapid pace. From 2023 until 2030, the market is expected to grow at an annualized rate of about 12%. As the general appetite for Bitcoin has risen, interest in Bitcoin IRAs has grown too. Americans have flocked to these accounts as a way to chase Bitcoin’s gains over the long term and to, hopefully, more rapidly grow a retirement nest egg while reducing their tax burden.
But not so fast! Before you get started with a Bitcoin IRA, there are a few things that you should know first.
1. Make Sure to Use the Right Kind of IRA
Remember: Bitcoin IRAs are still in their infancy, unlike Gold IRAs. Assets like gold and silver have stored value for thousands of years and could be added to IRA accounts for 25 years now, ever since the adoption of the 1997 Taxpayer Relief Act. So, of course, getting your IRA ducks in a row is the first step.
Traditional brokerage accounts typically do not support crypto investing. If they do, naturally, the opportunities for live trading are nil. Consider using a trusted Bitcoin IRA administrator, such as My Digital Money, to open up a Bitcoin IRA. My Digital Money was one of the first companies in the IRA market to receive a crypto trading license and one of the first to offer all major crypto assets as part of a retirement account.
An all-in-one provider such as My Digital Money can facilitate the process of creating and managing a Bitcoin IRA from start to finish. My Digital Money is also fully transparent about its fee structure, has industry-leading user privacy policies, and uses military-grade security protocols to protect its customers’ assets.
You have a choice of two types of self-directed retirement accounts you can use when establishing a Bitcoin IRA:
Roth Bitcoin IRA
After-tax retirement savings account that works just like any other Roth IRA
No upfront tax deduction with contributions
Zero requirements to pay taxes on gains later on when you retire and begin to take distributions
Traditional Bitcoin IRA
Tax-deferred retirement savings account
Contributions reduce tax liability for the year they are made (In most cases, contributions are tax-deductible)
For 2023, annual contribution limits are $6,500 if under age 50 and $7,500 if age 50 or above (add an additional $500 to each for 2024)
Must pay taxes on gains when you take distributions during retirement
Both types of IRA accounts offer tax benefits. Financial advisors sometimes note that if you expect to be in a higher tax bracket at retirement than you are now, a Roth IRA may work well, since you will pay a lower marginal tax rate on your contributions today. Conversely, individuals who expect to have a lower tax liability during retirement may opt for a traditional Bitcoin IRA instead.
If you have a Bitcoin wallet for your IRA, though, you can only fund it with your IRA. It is not legal to commingle your Bitcoin wallet with other IRA funds. If you try to skirt around this, you could wind up in some serious trouble with the IRS.
2. Diversification
Cryptocurrency is, more than anything, a diversification tool. Unlike other diversifiers, such as precious metals, Bitcoin is a highly asymmetrical investment. In other words, the upside potential (i.e., price ceiling) is much higher than the downside risk (price floor).
Bitcoin appears to be mimicking precious metals as a safe haven asset amid all of the geopolitical chaos in Europe. For example, during the first week of Russia’s invasion of Ukraine (Feb. 24-Mar. 1, 2022), the price of Bitcoin skyrocketed by roughly 33%.
(IronMonk Solutions via Stockcharts, sponsored) Price of Bitcoin.
For better or worse, as Russia becomes more isolated economically, the ruble declines, and the rest of the world feels spillover effects from rising oil prices and inflation, crypto has a growing role in the investment market. Its decentralized qualities and seamless and borderless P2P payments have never been more crucial than now.
Bitcoin represents a sea change in financial systems. The existing, traditional financial infrastructure is composed of financial services firms that are tightly regulated by governments. The new financial infrastructure being created with cryptocurrencies is being built upon open-source, decentralized software that is not controlled by any organization.
Digital currencies represent a $2 trillion+ market value, currently have over 200 million users, and offer a new global financial system with improved transaction efficiency. Adding exposure to this type of asset in a retirement account could be an outstanding long-term play. Perhaps that’s why over 80% of central banks worldwide are exploring Central Bank Digital Currencies and why the U.S. Federal Reserve is investigating a fully digital U.S. Dollar.
In 2023 so far, Bitcoin has outperformed both gold and the stock market. This is something that it has accomplished in both 2020 and 2021 as well.
3. Limited Supply = Inflation Hedge
For years, according to Reuters, gold has protected investors from excessive inflation and currency debasement.
As inflation surges, the value of the dollars you earn today may not retain its purchasing power tomorrow. Throughout history, gold has consistently managed to keep up with inflation, mainly due to its status as a limited and rare resource. During periods of political or economic uncertainty, the demand for gold tends to soar as investors seek a safe haven.
Presently, we find ourselves facing a dual challenge with inflation reaching a 40-year peak and witnessing the most significant invasion of a European sovereign nation since World War II. Interestingly, Bitcoin might be even more suitable for this specific context than gold ever was. Just like gold, Bitcoin is a finite resource—its blockchain protocol is designed to cap the total number of coins at 21 million. This immutable supply cannot be manipulated, and unlike fiat currencies, Bitcoins cannot be arbitrarily generated by governments or central banks.
Numerous respected analysts speculate that Bitcoin could potentially supplant gold’s role as a reliable store of value and a long-term hedge against inflation. Ponder this: Bitcoin currently commands around 20% of the “store-of-value” market. If its market share were to expand to 50% within the coming years, even without an overall increase in demand for stores of value, its price could effortlessly ascend beyond $100,000. As a result, institutional investors are increasingly turning towards Bitcoin as a safeguard against inflation.
4. Resistance to Confiscation
Love it or hate it, Bitcoin is decentralized and, at present, largely secure from government intervention. It is anonymous, cryptographically protected, and resistant to confiscation, theft, and seizure. Its decentralized nature provides both security from theft or fraud, as well as financial privacy.
Those are some of the reasons crypto demand has skyrocketed during the Russia-Ukraine crisis.
Russian President Vladimir Putin and other Russian officials are now frozen out of the traditional global financial system. Assets being seized, such as offshore bank accounts, have turned the Russian economy upside down. Ordinary Russians feel the pain, too, with the ruble worth less than half a dollar and the Russian central bank setting its overnight interest rate to a sky-high 8.5%.
From the Ukrainian side, crypto has also served a vital need. People worldwide are donating crypto to Ukraine as a form of remittance. The anonymity of crypto donations reduces the risk of Russia seizing donations.
5. Know the Risks
The undeniable long-term potential of Bitcoin and cryptocurrency stands out. However, before delving into establishing an IRA, it’s crucial to consider several risks.
Similar to any investment asset, Bitcoin carries its own set of risks. Its relative novelty and susceptibility to significant price swings make it vulnerable. These risks can also be magnified due to the asset’s emerging nature. Being a relatively immature asset, Bitcoin is prone to volatility, erratic price movements, cyber theft, fraudulent exchanges, and an uncertain regulatory landscape.
The concept of opportunity cost applies to Bitcoin as well, much like any other potential investment. Opportunity cost means that when you allocate funds to an IRA, you forego the chance to use that limited contribution space (typically $6,000 to $7,000 annually) for other assets. Additionally, recurring custody and maintenance fees, as well as potential costs associated with crypto trades, should be considered.
The risk of “forking” pertains to occasions when the Bitcoin blockchain undergoes periodic modifications and updates based on a consensus among its network users. Forking events can lead to price fluctuations that may erode investor confidence.
You can take steps to mitigate investment risks. It’s essential never to invest more than you can afford to lose, and it’s prudent to establish a Bitcoin IRA through a reputable provider. This ensures a more secure investment journey.
Top 5 Companies for Adding Crypto to Your IRA
Amid the global surge of cryptocurrency, experienced investors are increasingly considering the long-term prospects of their crypto portfolios. Surprisingly, even newer investors are gravitating towards extended timeframes, regardless of their level of experience.
While the regulatory landscape for cryptocurrency taxation remains complex and subject to change, there’s a fundamental aspect that remains constant. IRA accounts offer an excellent avenue for saving towards retirement or stashing funds for the long haul, coupled with the advantage of tax deductions.
Just as you would with a traditional IRA through a conventional brokerage platform, there are now companies facilitating cryptocurrency investment within an IRA structure. In this article, we will explore some of the most promising options available to crypto enthusiasts who seek a tax-efficient means of long-term investment.
#1 – My Digital Money
Phone: 833-636-2008
Years in Business: 2
Bitcoin IRA Annual Fees: None
Full-Service Bitcoin IRA: Yes
Insured Bitcoin IRA? Yes
(MyDigitalMoney | IronMonk Solutions, sponsored) MyDigitalMoney Logo.
Established by industry expert Collin Plume, My Digital Money originated from the ground up. Collin’s deep understanding of the IRA sector, garnered from his primary venture Noble Gold, served as the foundation for this enterprise. Remarkably, within a span of 2 years, My Digital Money has risen to the rank of the highest-rated Bitcoin IRA firm nationwide, lauded for progressively reducing its fees. The firm’s primary objective revolves around aiding individual investors in diversifying their portfolios and retirement funds by incorporating both precious metals and cryptocurrencies.
At the heart of their operations lies their flagship trading platform, which offers a seamless and cost-effective means not only to invest but also to trade Bitcoin and various other cryptocurrencies within an IRA. All of this is achievable with a simple click, facilitated by the user-friendly online dashboard provided by the company. Notably, My Digital Money stands out as one of the rare companies imposing minimal transaction fees (1.9%) for all asset purchases or sales conducted within their accounts.
Pros:
Excellent military-grade security protocols for all Bitcoin wallets
Partnership with Equity Trust Company for custodian services
Provides affordable access to all major cryptocurrencies
Cons:
#2 – Bitcoin IRA
URL: bitcoinira.com
Phone: 877-936-7175
Years in Business: 5
Bitcoin IRA Annual Fees: $240
Full-Service Bitcoin IRA: Yes
Insured Bitcoin IRA? Yes
(Bitcoin IRA | IronMonk Solutions, sponsored) Bitcoin IRA Logo.
Bitcoin IRA presents a comprehensive solution for integrating cryptocurrency into your IRA, and it was established by a trio of accomplished founders: Camila Concha, Chris Kline, and Johannes Haze. Each founder boasts an impressive track record, with prior successful ventures under their belts. The platform operates as a fully self-trading system, placing the onus of all investment decisions squarely on the user.
To enhance user experience, they provide a user-friendly app available on both Android and iOS platforms. This app proves to be invaluable and convenient for managing any trading account, offering a convenient means to monitor the growth of invested funds. Bitcoin IRA offers two distinct account options: an IRA account and an interest-bearing crypto account. Both choices hold considerable appeal for individuals with long-term visions for their cryptocurrency portfolios.
Pros:
Apps available for all operating systems
Allow you to borrow against crypto
Very user-friendly site and app
Cons:
Not very clear what exactly you can and cannot invest in
Offers 6% monthly payouts on IRA accounts, which brings up some tax concerns regarding withdrawing from an IRA and isn’t explained well on the site
#3 – BitIRA
URL: www.bitira.com
Phone: 800-299-1567
Years in Business: 6
Bitcoin IRA Annual Fees: $400
Full-Service Bitcoin IRA: Yes
Insured Bitcoin IRA? Yes
(BitIRA | IronMonk Solutions, sponsored) BitIRA Logo.
BitIRA presents a unified solution, condensing all your alternative investments into a single account. Through partnerships with Genesis, they streamline the process of trading cryptocurrencies and other alternative asset classes. Additionally, the platform extends its services to accommodate professional advisors, enabling them to proficiently manage client accounts. In the professional realm, options of this nature are limited, making BitIRA a standout choice.
Pros:
Cons:
Lack of transparency regarding all costs implied in transactions
Higher than average minimum deposit ($5,000)
#4 – Broad Financial
Phone: 800-395-5200
Years in Business: 19
Bitcoin IRA Annual Fees: $300
Full-Service Bitcoin IRA: Yes
Insured Bitcoin IRA? Yes
(Broad Financial | IronMonk Solutions, sponsored) Broad Financial Logo.
Broad Financial provides a comprehensive array of self-directed accounts tailored to both professional and non-professional investors. Their offering encompasses traditional investments and a diverse range of alternatives, all consolidated within a single account. Their extensive repertoire includes assets such as mortgage notes, peer-to-peer lending, private equity, and, as previously discussed, cryptocurrencies and precious metals.
In essence, Broad Financial serves as an exceptional one-stop destination, accommodating a myriad of account types that exceed our available description space. This diversity speaks volumes about their expertise spanning various domains. Additionally, they extend personalized consultation services, catering to novice investors seeking to initiate their investment journey on a solid footing.
Pros:
A wide variety of assets classes is offered
Offer products and accounts for individuals, businesses, and professional investment managers
Cons:
#5 – Coin IRA
URL: coinira.com
Phone: 888-988-COIN
Years in Business: 6
Bitcoin IRA Annual Fees: No Fees
Full-Service Bitcoin IRA: Yes
Insured Bitcoin IRA?: Yes
(Coin IRA | IronMonk Solutions, sponsored) Coin IRA Logo.
Coin IRA stands as a comprehensive platform, providing clients with an integrated environment for self-trading across cryptocurrencies, physical gold, and physical silver within their self-directed IRA accounts. Distinguished by their nominal transaction fees, they offer the unique advantage of enabling users to conduct buy and sell transactions 24 hours a day—an edge that sets them apart from certain similar platforms.
Elevating the security quotient, client assets find haven within institutional-grade storage solutions, characterized by top-tier security measures. The platform mirrors the user-friendly interface of Coinbase, facilitating seamless investment in both cryptocurrencies and precious metals online. Notably, the surge of interest in cryptocurrencies and the associated security concerns remain a substantial point of focus. Coin IRA adeptly addresses this concern, positioning themselves as a reliable solution in this evolving landscape.
Pros:
Institutional-grade storage, with best-in-class security
Very upfront about their fees
Great reviews listed on their site which we verified
Heavily focused on tax benefits, so for investors looking long term this should be a contender
Cons:
Summary Table UPDATED
#1 My Digital Money:
Full-Service IRA: Yes
Fees: 1.9% per transaction
Offers Other Alternative Assets: No
Storage: Cold storage
Headquarters: Pasadena, CA
#2 Bitcoin IRA:
Full-Service IRA: Yes
Fees: $240 annually + 10-15% on initial investment + 1% per trade
Offers Other Alternative Assets: No
Storage: Cold storage
Headquarters: Sherman Oaks, CA
#3 BitIRA:
Full-Service IRA: Yes
Fees: $195 annually + 0.05% monthly storage fee
Offers Other Alternative Assets: No
Storage: Cold storage
Headquarters: Burbank, CA
#4 Broad Financial:
Full-Service IRA: Yes
Fees: $300 annually
Offers Other Alternative Assets: Yes
Storage: Cold storage
Headquarters: Montvale, NJ
#5 Coin IRA:
Full-Service IRA: No
Fees: 1% per sell, 1.25% per buy
Offers Other Alternative Assets: No
Storage: Cold storage
Headquarters: Woodland Hills, CA
Conclusion: Wrapping Up
Never has there been a more opportune time to create a Bitcoin IRA. Many saw Bitcoin and other cryptocurrencies as a fad and little more than a gimmicky slot machine. But, now, with inflation and geopolitical tensions, we are seeing the purpose it serves in real time. It is probably no coincidence that Colorado became the first U.S. state to accept crypto for tax payments during the second week of the Russia-Ukraine war.
We are still in the infancy of a new asset class that could completely transform finance. The key is to look at the long-term potential and make sure that you do your due diligence. If you are a believer, there is no reason not to take the plunge and start a Bitcoin IRA.
Just do your research to find a knowledgeable, reputable Bitcoin IRA provider. One decision you will have to make is whether to go with an all-in-one firm, such as My Digital Money, that handles purchasing crypto, Bitcoin IRA management, and storage, all in-house, or with a provider that merely connects you with appropriate third parties to handle custodial management and IRS-approved storage.
To find out more about how a Bitcoin IRA can work for you, consider requesting a FREE info kit from My Digital Money or give them a call at 1-833-636-2008 for more information.
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