Why Should I Start a Cryptocurrency IRA?

What's Your Plan for Retirement sign held by business manMain Reasons to Start a Cryptocurrency IRA

A Cryptocurrency IRA can provide vitally important diversification and tax advantages that could make a big difference in the success of your retirement portfolio and its profitability in the long term.

Tax Advantages

The primary reason investors open a Cryptocurrency IRA are the tax advantages that are inherent with any IRA.   A Traditional Cryptocurrency IRA funded with pre-tax dollars accrues gains tax-free as long as they remain inside the IRA.  Withdrawal of funds from the IRA, called distributions, will result in income tax due on the amount withdrawn.  Post-tax dollars invested in a Roth Cryptocurrency IRA accrue gains tax-free, and no income tax is due on the gains upon distribution, provided the funds remain in the account for the IRS required time period, and you are over 59 ½ at the time of withdrawal (consult your personal tax professional for individual guidance).  Crypto IRAs provide a huge advantage over non-IRA crypto trading accounts that will result in capital gains tax on profits.

Return On Investment

Cryptocurrencies have progressed from a mere curiosity worth pennies per coin to full-fledged investment assets worth hundreds or thousands of dollars each. Investors who choose wisely, take advantage of dollar cost averaging, and “buy the dips” could see an impressive return on their investment. In the first decade of its existence alone, Bitcoin was one of the best performing assets on the market. Other cryptocurrencies, such as Ethereum, have performed equally as well.

Investment Hedge

Cryptocurrencies are often used as a hedge against the weakness of the US dollar and diversification against financial turmoil in other markets.  Bitcoin’s advantage is that its supply is strictly limited, and therefore, as demand from investors and institutions grows and available supply declines, its value has been predicted to increase over time, potentially to six figures. Compare that to the US dollar, which has continued to erode in value year after year due to inflation resulting from excessive and unlimited money printing.  Analysts agree that depending on their utility, some cryptos such as Ethereum, which provides a platform for smart contracts and NFTs, seem poised for a very bright future and can help to balance an investment portfolio heavily invested in the stock market.

Freedom From the Financial System

Cryptocurrency IRAs offer you an incredible opportunity to invest outside of the traditional investments of the US financial system and stock markets, which were once brought to the point of collapse by the complicated investment products of Wall Street investment firms.  Further, with a Cryptocurrency IRA through Coin IRA, there are no account startup fees, maintenance fees, storage fees, or management fees, so your account isn’t constantly being drained by recurring charges month after month.  Best of all, many financial experts who were skeptical at first now believe the decentralized finance model is here to stay, but regardless of what happens to financial markets and to the US dollar, your cryptocurrency assets will remain insured and secure with our custodial partner, Equity Trust Company, in business for 50 years with $39B in assets under custody.

Our IRA Specialists have been providing valuable answers to questions about Cryptocurrency IRAs since 2017.  If you would like to learn more about how a Cryptocurrency IRA can help diversify your investment portfolio, build your retirement assets, and protect your wealth against economic turmoil and financial uncertainty, contact Coin IRA today for our free electronic guide, “How to Add Bitcoin and Other Cryptocurrencies to Your IRA.”

Skip to content