Investing for Retirement with Bitcoin

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Wondering whether you should invest in Bitcoin for retirement? If yes, here’s what you should know about investing for retirement with Bitcoin.

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Some people learned about Bitcoin during its launch in 2008. However, many digital currency offerings have made headlines since this time. Today, Bitcoin’s value continues to increase. Some people have even incorporated this digital asset in their retirement investments. But, how do you invest in Bitcoin for retirement?

Investing in Bitcoin as part of your retirement can have substantially higher returns. It also adds diversity to your overall portfolio. However, retirees should learn about this cryptocurrency before investing in it. That’s because Bitcoin can be risky and highly volatile, like other virtual currencies. Here are things to know when investing in Bitcoin for retirement.

Understanding Bitcoin IRA

Bitcoin IRA refers to self-directed IRA. A self-directed IRA enables a person to invest funds in an alternative asset class. Such an asset class can be a precious metal, real estate, Bitcoin, or other cryptocurrencies. Conventional IRAs do not include alternative asset classes.

Self-directed individual retirement accounts provide the option to buy different alternative assets. Investing in Bitcoin as an option can enhance the investment returns for a retiree. It can also improve broader diversification, although it can introduce some risks into the retirement portfolio.

Conventional financial institutions don’t allow IRAs to invest in IRS-approved alternative asset classes. That’s because they focus on earning fees via traditional investments. And this explains the emergency of the self-directed IRA sector. The Retirement Industry Trust Association currently approximates that people have invested between 2 to 5% of IRAs in alternative assets.

How Bitcoin IRA Works

Bitcoin functions almost the same as a regular IRA. The only difference is that a person invests money in a cryptocurrency rather than a mutual fund shares. A person can select between traditional and self-directed IRAs, thereby benefit from their tax advantages. What’s more, the investor faces similar limits for annual contribution if they are aged 50 years and above.

Simple and SEP IRAs are the best alternatives for self-employed persons and small business owners. They can also go for solo 401(k)s with substantially higher limits for an annual contribution. What’s more, investors can roll over their funds from the standard IRA to a self-directed IRA.

Self-directed IRAs may be similar to typical IRAs. However, they differ in some ways. For instance, most brokerages provide a one-stop shopping experience, where investors set up IRAs and then purchase and sell securities in a single place. On the other hand, Bitcoin IRA is more of a DIY thing.

Here’s what you should have in mind when dealing with Bitcoin IRA:

  • Bitcoin trades: With Bitcoin IRA, a crypto exchange like Bitcoin Era manages your trading activity. Also called a digital currency exchange, a crypto exchange is like a stock market. Ideally, a crypto exchange is a place where people trade digital currencies. What’s more, people purchase digital currencies on this platform using fiat money.
  • Custodian: A custodian will hold your IRA. They will also safe-keep your IRA and ensure that your account follows the government and IRS regulations. Financial institutions like banks play this role with the regular IRAs.
  • Secure storage: A secure storage protects your Bitcoin with this IRA. And this includes proprietary storage for keeping your virtual coins safe from theft after purchasing them.


Companies that provide self-directed IRAs can offer these and other variations. For instance, a Bitcoin IRA firm can partner with a crypto exchange or allow customers to use a third-party platform to trade Bitcoin.

Final Thoughts

Bitcoin IRA could be a good option for an investor that’s almost retiring. However, every investor should understand how this virtual currency works to invest in it safely and prudently. That way, they can enhance their chances of reaping maximum returns from their investment.


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