Bitcoin in Your IRA
Let’s say you are intrigued by Bitcoin and you know the rule of the game is to buy and hold. Most people don’t have ice in their veins like Tom Brady in the 4th quarter of a Super Bowl while investing, so one way to lock yourself into a more calm, long term approach to this asset is to simply put it into your Retirement account. IRA’s by nature are meant for later, a practice in delayed gratification in a world of instant gratifications, so they bestow and enforce the mindset of long term holding. Furthermore, if you really believe this new form of money will gain global acceptance and adoption, continuing its decade-long snowball effect of absorbing approximately $80+ million per day into its network since inception, there are interesting tax advantages you may want to consider with a Roth IRA in which you invest your already-taxed dollars today and receive no tax penalties upon proper withdrawal later. If then, your IRA account appreciates greatly or goes to the moon as they say, then you would be walking away with tax-free gains on Bitcoin later in life.
Let’s explore the current options to achieve exposure to Bitcoin in your IRA today:
GBTC
GBTC is an investment trust you can buy like a stock in your portfolio if you already have an existing retirement account. It tracks the price of Bitcoin so if BTC goes up so does GBTC. The only kicker is there's a hefty premium fee on this product so you are going to pay a higher price of entry than you could simply buy bitcoin for on Cash App or Coinbase, for example. You can also invest in Ethereum at a premium with ETHE and Litecoin with LTCN all by the same investment trust company, Grayscale.
Bitcoin IRA and Choice
A newer option coming to market is holding Bitcoin directly in your IRA. bitcoinIRA.com is one option that allows this and I am currently in the process of starting my account at retirewithchoice.com, which enables savvy Bitcoiners like myself to hold my own bitcoin in my personal wallet, abiding well with the ethos that you should always prefer to hold your own money rather than let anyone else have access to it. Choice IRA also allows high-security custodial services through Fidelity for only a 1% fee and they offer less secure, but free services as well. So far, Choice is my preferred choice on the market for now.
BITW
BITW is an index fund for the top 10 cryptocurrencies, weighted heavily in favor of Bitcoin and Ethereum currently. Indexes are great to get exposure to the entire rising tide of the market, especially if you are not sure about the details of each coin and just want general exposure, this is a great option.
MSTR
An interesting individual company seems to be making itself a massive bitcoin bet. Microstrategy is a premier software company that has recently purchased approximately a half-billion dollars worth of bitcoin. At the end of the day, Bitcoin is software and this company understands software. They are a cash producing company, raising another $650 million in low-interest corporate bonds to purchase more than a billion dollars worth of BTC. Essentially, they hold their entire treasury in BTC and convert all future excess cash into BTC. If you don’t like the idea of bitcoin, but like the idea of income-producing assets with the potential for massive gains that Bitcoin seems to offer, this one company may be a good balance.
Rocket Dollar
This is a company for $25 a month allows you to self manage your IRA and allocate bitcoin into your retirement holdings.
ETF
It’s only a matter of time before some company is granted the green light to create a 1:1 ETF ratio to enable all regular retail investment brokerages to give their clients exposure to buy bitcoin
