Cryptocurrency in an IRA: Pricing Comparison

By Melissa Finnegan0 Comments

digital currencyWhy Hold Cryptocurrency in a Self-Directed IRA?

Potential Tax Advantages

While investors have a variety of reasons for holding cryptocurrency, such as Bitcoin, in a self-directed IRA, one of the top possible reasons would be the tax advantages. Investments within a self-directed account grow tax-deferred or tax-free, depending on the account type and as long as IRS guidelines are followed.

How Does Cryptocurrency in an IRA Work?

Held by a Custodial Entity

All IRAs must be held by a custodial entity, such as a bank or a trust company, approved by the IRS. Through a predecessor company, Equity Trust has been an IRS approved custodian since 1983.

As a leading provider of self-directed IRAs, Equity Trust has $25 billion in assets under custody and administration.1

Pertaining to cryptocurrency, once a retirement account is open and funded, you can establish a digital currency (cryptocurrency) trading account within our Digital Asset Platform.

As you direct, the funds in your IRA are transferred to the Digital Asset Platform. When cryptocurrency is sold, funds are transferred from the platform back to the IRA.

How Much Does Cryptocurrency in an IRA Cost?

There are a few custodians that allow cryptocurrency in an IRA. Each has a different pricing model and recently completed a comparison of the leading providers and below is the breakdown.

Pricing Comparison Example

How much do you have to pay to invest $50,000 in Bitcoin through your IRA?2
BitIRA Bitcoin IRA Equity Trust
$300 – Annual Storage $395 – Set-up Fee (Custodian) $400 – IRA Account Annual Maintenance Fee
$50 – Account Set-up Fee $4,340 – One-time Set-up Fee (with 30% Discount) $50 – IRA Set-up Account Fee
$100 – Transaction Fee   $500 – Digital Asset Platform
Set-up Fee
$4,949 – BitIRA Fee
$30 – Wire Fees
$44,541 – Left for Trading
$45,265 – Left for Trading $49,050 – Left for Trading

As of 12/31/17

Prior to making any investment decisions, please consult with the appropriate legal, tax, and/or investment professionals for advice.  As a self-directed IRA custodian, Equity Trust Company will not provide investment advice or risk assessment of any investment.  The digital currency market may experience a high degree of volatility and clients should consult with an investment professional before any investment is made.