Self-Traded vs. Automated Crypto IRA: What’s the Difference?

Investing in cryptocurrency through an IRA can provide access to digital assets while maintaining the tax advantages associated with an eligible retirement account. But not every Crypto IRA works the same way.

One of the biggest differences is how investment decisions are made. With a self-traded Equity Crypto IRA, you choose eligible cryptocurrencies and decide when to buy, sell, or hold. With an Automated Crypto IRA, technology and predefined rules can evaluate market conditions and provide trading instructions.

Understanding those differences can help you compare the two approaches based on your investment objectives, experience, risk tolerance, and desired level of involvement.

What is a Crypto IRA and how does it work?

A Crypto IRA is an individual retirement account that provides access to eligible cryptocurrencies in addition to, or instead of, traditional investments.

At Equity Trust, investors can take different approaches to cryptocurrency investing.

Hands-on investors can make their own investment decisions through an Equity Crypto IRA, while those looking for a technology-driven approach can enroll in the Automated Crypto IRA powered by Animus Technologies.

The key difference comes down to who, or what, is making the investment decisions.

How Self-Traded and Automated Crypto IRAs Compare?

While both approaches provide a way to invest in cryptocurrency through an IRA, the investor experience is quite different:

What is a self-traded Crypto IRA?

A self-traded approach may appeal to investors who actively follow cryptocurrency markets and want to determine what belongs in their portfolio.

With the Equity Crypto IRA, investors can choose from a broad selection of eligible digital assets across multiple market segments and use Equity Trust’s Digital Trading Platform to buy, sell, and hold cryptocurrency.

This approach puts investment selection and trading decisions in the investor’s hands. You determine which eligible cryptocurrencies to own and when you want to buy, sell, or hold them based on your own research and investment objectives.

A self-traded approach may be worth considering if you:

• Prefer to research and select your own digital assets
• Want access to a broader selection of eligible cryptocurrencies
• Want to determine when to buy, sell, or hold
• Prefer a hands-on approach to managing your crypto portfolio

What is an Automated Crypto IRA?

Not every cryptocurrency investor wants to constantly research and assess the market or determine when to make a trade.

The Automated Crypto IRA powered by Animus Technologies takes a different approach. Animus continuously evaluates cryptocurrency markets using predefined, rules-based trading models and provides instructions on when to buy or sell based on its methodology.

Rather than attempting to trade hundreds of cryptocurrencies, the automated strategy intentionally focuses on Bitcoin and Ethereum, with the ability to move between Bitcoin, Ethereum, and cash based on changing market conditions and its assessment of risk.

According to Animus Technologies white paper, its technology analyzes market information to make consistent, data-driven decisions without allowing investor emotion to influence individual trades.

An automated approach may be worth considering if you:

• Prefer a rules-based investment methodology
• Don’t want to make individual buy and sell decisions
• Want technology to continuously evaluate changing market conditions
• Prefer a strategy focused on Bitcoin and Ethereum
• Are comfortable allowing a predefined methodology to drive trading instructions

How Is Cryptocurrency Stored in an IRA?

Crypto IRA investors don’t personally hold the private keys to digital assets owned by their retirement account. The assets must remain within the IRA’s custodial structure.

For Equity Trust’s cryptocurrency offerings, eligible digital assets are held through High Ridge Trust, a Nevada-chartered trust company and institutional digital asset custodian.

Cold storage is designed to keep the private keys used to access cryptocurrency away from internet-connected environments, which provides an additional layer of protection against certain online threats. This custody structure also means that while the IRA directly owns the eligible cryptocurrency, the investor does not personally take possession of the private keys.

Which Crypto Investing Approach Fits You?

The choice doesn’t have to come down to whether self-traded or automated cryptocurrency investing is inherently better. Instead, consider how you want to invest.

If you enjoy researching cryptocurrency, following markets, selecting individual digital assets, and deciding when to trade, a self-traded Equity Crypto IRA may provide the flexibility you’re looking for.

If you’d rather use a predefined, algorithmic, data-driven methodology that evaluates market conditions and provides trading instructions without requiring you to make each individual trading decision, an Automated Crypto IRA may be a better fit for your investing style.

Either way, cryptocurrency remains a volatile asset class and involves the risk of loss. The approach you choose should reflect your investment objectives, risk tolerance, and desired level of involvement.

Explore Your Crypto IRA Options

Equity Trust provides multiple ways to include cryptocurrency as part of your retirement strategy.

Explore the Equity Crypto IRA for hands-on investing or learn about the Automated Crypto IRA powered by Animus Technologies to determine which approach aligns with your investment objectives.

Equity Trust Company is a directed custodian and does not provide tax, legal, or investment advice. Any information communicated by Equity Trust Company is for educational purposes only, and should not be construed as tax, legal or investment advice. Whenever making an investment decision, please consult with your tax attorney or financial professional.