Cryptocurrency investment platforms that enable investors to hold digital assets in their IRA have gained significant attention in recent years, offering individuals and institutional investors a new avenue to participate in the potentially lucrative world of cryptocurrencies. These platforms aim to expand the availability of certain cryptocurrencies as alternative investments for retirement investors.
Learn more about the benefits of investing in digital assets with IRAs through reputable crypto IRA platforms and companies, as well as potential pitfalls and how to evaluate the various platform options.
What are crypto IRA investment platforms?
Crypto IRA investment platforms connect investors to what they need to invest in cryptocurrency in their IRA:
- Cryptocurrency investment options through crypto liquidity providers
- Custodial provider for storage and safeguarding of investors’ assets inside their IRA
Similar to traditional U.S. investment markets, crypto platform providers must designate a qualified custodian to be responsible for safeguarding and storing their clients’ digital asset investments.
The cryptocurrency market is a young market that trades globally, 24 hours a day/seven days a week, and its regulatory landscape continues to evolve. Cryptocurrency IRA companies that work with a qualified third-party custodian to hold assets provide investors with peace of mind.
Potential advantages of crypto IRA platforms
Cryptocurrency IRA companies may offer the following features and advantages:
Access to previously unexplored opportunities
Cryptocurrency investment platforms curate a diverse range of investment opportunities from across the globe, allowing investors to expand their alternative asset investment options into previously inaccessible sectors and/or emerging markets.
Diversification
Investors can manage risk by diversifying their retirement portfolios into digital assets through crypto IRA platforms. These platforms may allow you to allocate funds to a variety of digital assets, potentially reducing risk and enhancing growth potential.
Robust investment process
Certain crypto IRA providers have a streamlined and robust investment process with user-friendly interfaces and intuitive trading functionalities. These platforms simplify the buying, selling, and management of digital assets within your self-directed IRA.
Potential for higher returns
Many cryptocurrencies have grown in value in a short period, illustrating this asset class’s potential for significant returns.
Potential pitfalls of cryptocurrency IRA platforms
High fees
Crypto IRA platforms may charge higher fees than other investment accounts you’re familiar with. These fees cover account setup, maintenance, and trading. The fees can eat into your investment returns, so it’s important to compare the fees of different platforms before you choose one.
Volatility
The cryptocurrency market is volatile; prices of cryptocurrencies can fluctuate wildly. This can make it risky to invest in cryptocurrencies, especially if you’re close to retirement.
Security risks
Cryptocurrency is a relatively new asset class, and there are still security risks associated with it.
Lack of liquidity
The cryptocurrency market is not as liquid as traditional markets, meaning that it can be difficult to buy and sell cryptocurrencies quickly. This can make it difficult to sell your investments if you need to access your money in a hurry.
Regulation
The cryptocurrency market is still relatively unregulated, which means that there is no guarantee that your investments will be protected.
Important things to consider when choosing a crypto IRA provider
Given the relative newness and evolving state of the crypto market, it’s essential to perform due diligence when partnering with a cryptocurrency IRA company.
Before getting started, be sure you understand crypto IRA platforms and how they manage crypto investing with retirement accounts. Here are other key factors to consider with crypto IRA companies:
Security
When selecting a crypto IRA company, look for a platforms that prioritizes the protection of your investments, employs advanced security measures, and adheres to regulatory compliance.
Education
Crypto IRA companies and platforms often offer educational resources, customer support, and market insights to help you make informed investment decisions. Leverage their expertise to navigate the crypto landscape effectively and optimize your digital asset investments.
Crypto IRA companies do not provide investment guidance and/or investment advice. You should consult with a licensed and trusted financial advisor before making any investment decisions.
Trustworthy regulatory and industry organizations have materials available to help when evaluating a potential investment or platform. Here are some places to start:
Retirement Industry Trust Association (RITA) – Check Before You Invest checklist helps you become a more informed investor.
Investor.gov – The Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy provides information to help you invest wisely and avoid fraud, providing helpful examples of fraud.
Where to find crypto IRA companies
Looking for crypto IRA investing platforms? The Investment District is an online marketplace that includes listings of cryptocurrency investment providers and makes it easier for investors to find potential opportunities and invest with their Equity Trust account. Click on each listing to be taken directly to the platform, where you can learn more about the asset provider and its offerings.
These platforms, and potentially others, enable you to use a self-directed IRA to invest. Remember that as the self-directed IRA owner, you direct the investments and are responsible for due diligence.
As Equity Trust Company (“Equity Trust”) is a directed custodian, like any investment, it is your responsibility to conduct your own due diligence before investing and before choosing a provider that is right for you. Equity Trust may, from time to time, establish independent contractor relationships with third-party providers, as provided above, whereby you, as the IRA owner, can have access to third-party providers for services that may be beneficial to you. Equity Trust is not an affiliate of any such provider. Equity Trust makes no recommendation or representations as to any provider and service or the needs generally of any IRA owner or any IRA. Any service available from any provider that offers investment education or advice solely reflects the views of such provider and in no way represents any recommendation or advice from Equity Trust. Opinions or ideas expressed by third parties, their affiliates, and employees are not necessarily those of Equity Trust nor do they reflect their views or endorsement. IRA owners are in no way obligated to purchase services and IRA owners are free to choose a provider with services as they deem appropriate. IRA owners should consult with their financial and legal advisors before choosing to work with any provider.
