Frequently Asked Questions – Bitcoin IRAs

Absolutely! Cryptocurrencies have been eligible to place into IRAs since 2014, when the IRS issued Notice 2014-21, which declared virtual currency (such as Bitcoin) as personal property for taxation purposes. Although the tax agency did not explicitly state that Bitcoin could be placed into an IRA – the IRS never makes such official proclamations – this ruling made digital currency eligible for such use under the rules that govern self-directed IRAs.

BitIRA has set up a process to ensure that the purchase of your digital currency strictly adheres to the guidelines of self-directed IRAs. Our IRA Specialists can help you roll over your IRA or 401(k) to your new custodian without incurring any penalties. Once your account is set up, we ensure IRA compliance each step of the way, including to purchase your Bitcoin and then to store it with a digital currency wallet.

Rest assured that your new Digital Currency IRA follows every rule imaginable in order to remain compliant with IRS guidelines and regulations that pertain to the tax benefits that come with IRAs.

If you have an IRA, yes, it will be eligible for a rollover to a Digital Currency IRA. In fact, you can rollover your existing IRA to any other custodian as often as you would like. It’s also important to note that this covers any type of IRA, such as Traditional, Roth, SEP or SIMPLE.

If you have a 401(k) or another employer-sponsored plan (such as a 403b, 457 or TSP), your eligibility to rollover to a Bitcoin IRA is not always possible. For those folks who are eligible, it is usually because their account was set up with an employer that they no longer work for. But even if your account was set up with your current employer, there are certain times when you still may be eligible to move your plan. For more info, please contact us so that we can learn more about your situation and help you inquire about your eligibility.

As long as your current retirement account is eligible to be rolled over to an IRA, there will be no penalties to create a Digital Currency IRA.

See the prior question for rules pertaining to eligibility.

Absolutely! You can create any characterization of IRA that you’d like for your cryptocurrency, just as you could for any other asset class. In addition to moving Bitcoin to a Roth IRA, you can also setup a Traditional IRA, SEP IRA and SIMPLE IRA.

As of right now, we offer the following digital currencies for placement in your IRA:

1. Bitcoin (BTC)
2. Ethereum (ETH)
3. Litecoin (LTC)
4. Solana (SOL)
5. Ripple (XRP)
6. Stellar Lumens (XLM)
7. Bitcoin Cash (BCH)
8. Chainlink (LINK)
9. AAVE (AAVE)
10. Basic Attention Token (BAT)
11. The Graph (GRT)
12. Maker (MKR)
13. Decentraland (MANA)
14. Yearn Finance (YFI)
15. Compound (COMP)
16. Uniswap (UNI)
17. Dai (DAI)
18. Livepeer (LPT)

No fees for setup.  No ongoing fees.  With BitIRA’s custodian partner, Equity Trust Company, you don’t have to worry about fees cutting into your retirement savings.  With other IRA custodians, fees could represent a large, ongoing cost.  So it’s important to ask these questions before committing to a service:

• What are the ongoing flat fees? Do I pay these fees on a monthly or annual basis?
• Are there any variable fees? How does those work?
• If I hold more than one coin in my account, do I pay additional fees for those?

Equity Trust has no ongoing fees.  Instead, Equity Trust includes a nominal fee in its spread, which is reflected in the quoted asset price.  Other than this, the only fees you’ll pay are fees for specialized services from Equity Trust (such as wire transfer fees or return check fees).  Contact us if you want to learn more about these potential fees.

BitIRA, does NOT charge any fees to liquidate the cryptocurrency in your IRA.  Equity Trust includes a nominal fee in its spread, which is reflected in the quoted asset price.

There are a number of factors at play when creating your new account. For example, when rolling over funds, we find that the old custodian can often drag their feet on the transfer to your new custodian. Additionally, once your new account is funded with Equity Trust Company, it’s necessary for them to do their due diligence to securely establish your account.

When it’s all said and done, we find that it can take anywhere from one to three weeks for your new account to be fully funded and ready to purchase digital currency.

When establishing BitIRA and our processes, the security of your retirement funds was one of our most critical considerations. At this early stage for digital currency, some technology has not yet been fully developed, so unfortunately the industry has been marred by some negative publicity. For example, notable hacks have rocked the Mt. Gox exchange and BitGo wallet.

Determined to produce the most secure solution possible, we have partnered with Fireblocks, a leading expert in digital asset storage and security.  We use Multi-Party Computation (MPC) to protect our customer’s assets.  With MPC, no transaction can be approved without your personal authorization and authorization from our trusted security partners.  Because multiple parties are required to approve every attempt to access, there is no single point of compromise which greatly increases the security of digital assets.  Further, we also have end-to-end insurance to protect your digital assets whether they’re in storage or in transit.

To read about the features that make BitIRA “The World’s Most Secure Digital Currency IRA”, click here.

Your currencies are fully covered by end-to-end insurance, from transmission to storage, against hacking, theft, damage and destruction. BitIRA has multiple insurance policies at work to protect your digital assets.  All insurance partners have knowledge and experience of underwriting digital asset insurance products. 

Simply put, there is no more secure option on the market for the storage of cryptocurrencies in your IRA.

As long as you keep your IRA funds within the umbrella of your account, there are no penalties; you can move from any eligible asset to another, and as often as you would like.

So, whether it’s three days or three years after you’ve created a Digital Currency IRA with BitIRA, you can call us up and liquidate your cryptocurrency holdings very quickly. As long as those proceeds remain within the umbrella of your IRA, you can use them to purchase another IRA-eligible asset (for example, equities, precious metals or cash). However, as with any other IRA, if you take any form of distribution before you are eligible to do so, there would be penalties.

In some cases, yes. Upon distribution, if you want to keep your cryptocurrency as opposed to converting it into cash, our partner custodian, Equity Trust Company, may be able to accommodate your wishes.

If you have questions about a specific case, please get in touch and we’ll help you work it out.