• Crypto Lists
  • Bitcoin
  • Blockchain
  • Cryptocurrency
  • Altcoin
  • Advertise With Us
  • Join our Telegram Community
Newsletter
ItsBlockchain
  • Bitcoin
    Is the Russia-Ukraine War the Biggest Test for Bitcoin? Market Update

    Is the Russia-Ukraine War the Biggest Test for Bitcoin? Market Update

    Bitcoin ETFs could have the same result as CME group futures launch in 2017

    Bitcoin ETFs could have the same result as CME group futures launch in 2017

    featured image

    How Bitcoin can be hacked?

    keep bitcoin safe

    Keep Your Bitcoins Safe: All You Need to Know About Crypto-Cyberthreats

    featured image

    Bitcoin IRA – Everything You Need to Know

    A trillion dollar tsunami is about to hit Bitcoin

    A trillion dollar tsunami is about to hit Bitcoin

    featured image

    Why Bitcoin will always be the number one cryptocurrency? Explained

    Crypto markets mirror Wall Street’s fall- Loses 100 billion in 24 hours and Delta Plus Variant creates extreme fear

    Crypto markets mirror Wall Street’s fall- Loses 100 billion in 24 hours and Delta Plus Variant creates extreme fear

    On-chain shows Divergence against Bearish Price-Action, But Bitcoin continues to stay in the Re-Accumulation Phase

    On-chain shows Divergence against Bearish Price-Action, But Bitcoin continues to stay in the Re-Accumulation Phase

    Trending Tags

    • Crypto Gems
    • NFT
    • DEFI
    • Crypto Lists
    • Altcoin
    • Crypto Market
    • Guide
    • IBC Capital
    No Result
    View All Result
    • Bitcoin
      Is the Russia-Ukraine War the Biggest Test for Bitcoin? Market Update

      Is the Russia-Ukraine War the Biggest Test for Bitcoin? Market Update

      Bitcoin ETFs could have the same result as CME group futures launch in 2017

      Bitcoin ETFs could have the same result as CME group futures launch in 2017

      featured image

      How Bitcoin can be hacked?

      keep bitcoin safe

      Keep Your Bitcoins Safe: All You Need to Know About Crypto-Cyberthreats

      featured image

      Bitcoin IRA – Everything You Need to Know

      A trillion dollar tsunami is about to hit Bitcoin

      A trillion dollar tsunami is about to hit Bitcoin

      featured image

      Why Bitcoin will always be the number one cryptocurrency? Explained

      Crypto markets mirror Wall Street’s fall- Loses 100 billion in 24 hours and Delta Plus Variant creates extreme fear

      Crypto markets mirror Wall Street’s fall- Loses 100 billion in 24 hours and Delta Plus Variant creates extreme fear

      On-chain shows Divergence against Bearish Price-Action, But Bitcoin continues to stay in the Re-Accumulation Phase

      On-chain shows Divergence against Bearish Price-Action, But Bitcoin continues to stay in the Re-Accumulation Phase

      Trending Tags

      • Crypto Gems
      • NFT
      • DEFI
      • Crypto Lists
      • Altcoin
      • Crypto Market
      • Guide
      • IBC Capital
      No Result
      View All Result
      ItsBlockchain
      No Result
      View All Result
      Home bitcoin

      Bitcoin IRA – Everything You Need to Know

      Nivesh Rustgi by Nivesh Rustgi
      August 2, 2021
      in bitcoin, Guide
      0 0
      0
      featured image
      164
      SHARES
      1.9k
      VIEWS
      Share on FacebookShare on Twitter

      In this article, We will discuss Bitcoin IRAs, How Bitcoin IRA works, Laws and regulations, Service providers and future of Bitcoin IRAs.

      The tax laws in US provide for a certain advantage for working individuals to save for retirement. IRAs (Individual Retirement Accounts) and 401(k)s are finance accounts that are exempt from taxes until the individuals’ retirement.

      IRA (or Individual Retirement Account) is a financial fund which enables an individual to contribute pre-tax income towards his retirement via accounts offered by Financial Service firms. The amount of tax-deductibles depends on the taxpayer’s income, tax-filing status, and other factors.

      A 401k is similar to an IRA, however, it is one that is offered by the employer which lets employees contribute part of their earnings from the company towards their retirement.

      In the 1980s, 401(k)s were introduced as a supplement to pension plans offered by companies. Eventually, the cost of pensions grew past most company’s sustainable levels. Hence, they have replaced them with 401(k)s and other retirement benefits.

      In most cases the companies providing a 401(k) match the contributions of the salaried individuals to a certain amount. That is, for e.g. upto 3% on one’s salary (lets say $1500), the company adds in an equal amount (making it to $3000) to the contribution made by the individual. Essentially, it is free money saved up for the long-term.

      Trends with 401(k) and IRA

      Nevertheless, a notable trend in the United States has been deflection of individuals and firms from their 401(k)s and investment in IRA accounts. In the 1970s, more than 60% of the individuals in the US had some sort of defined pension benefits that they received from their companies.

      Currently, a report suggests that only 14% companies in the US had 401(k) plans for individuals and only about 4% working individuals of them had enabled it in 2012. According to ICI, in 2016, about 55 million American workers were active 401(k) participants (about 16%). According to another report from them, about 36% of US households have IRA accounts.

      The total assets at the end of June 2019 in IRA accounts was $9.8 trillion. IRA assets represent nearly one-third of the $30.1 trillion US retirement fund. In contrast, 401(k) assets were $3.1 trillion and represent 17 percent of the US retirement market in 2010. Other assets that are managed under retirement schemes include employer-sponsored retirement plans and defined contribution (DC) along with stock options and annuities.

      Mutual funds form a large part of the investments in retirement accounts. Other investments are placed in brokerage accounts or managed by banks or insurance companies.

      Why Should All Individuals have Retirement Accounts

      The money in the 401(k)s or IRA account can only be tapped on retirement. A penalty or tax is charged in case an individual decides to reap early benefits from these investment plans. The money invested in retirement accounts can be put before taxes and the accounts itself are exempted from taxes.

      Furthermore, the 401(k) also comes with ‘matching’ from the companies which is essentially ‘free money’ for the future.

      Veteran trader and financial expert, Tyler Jenks, who died last year in 2019 strongly advises individuals to max. out on the designated contributions to one’s IRA account. In 2019, the IRA account limit was increased to $6000 (under 50 years of age) and $7000 (if you’re over 50).

      The basic sections of the IRS that include these investment plans are: 401(k), 403(b) and 457. If you leave a company that offered 401(k), one can roll into a rollover IRA or can be transferred to the existing company.

      Nevertheless, there are restrictions imposed on when and how an employee can into the ‘extra’ funds added by the employer. Although, he is always liable to his contributions.

      Bitcoin and Crypto IRAs

      A Bitcoin IRA or a crypto IRA is an investment account that includes Bitcoin and other cryptocurrencies (most popularly XRP, Ethereum [ETH], Litecoin and Bitcoin Cash [BCH]). An IRA account requires a mandatory report to the IRS (Internal Revenue System) and are usually managed by investment management firms. 

      A few advantages of Bitcoin IRA include diversification of portfolios. Nevertheless, Bitcoin IRAs currently are usually expensive. In other words, Bitcoin IRA fees are typically fairly high, primarily due to CPAs and FS (Financial Services) firms, and their volatility adds risk to the portfolios. 

      Furthermore, cryptocurrency investments have become fairly attractive among millennials in the past few years. Adding Bitcoin and cryptocurrenices to retirement accounts can help in evading taxes, and the long-term realization of profits can effectively eliminate greed and fear in investors. 

      Laws and Regulations

      Currently, the IRS treats cryptocurrency, such as Bitcoin, as capital assets. Hence, it can form a part of investments in retirement accounts subject to restrictions under 4975(c) of the IRS.However, there is a provision of ‘disqualified individuals’ and risk asset clause with restricts the addition of Bitcoin and other cryptocurrencies to retirement accounts.

      Nevertheless, certain Financial Services firms have established ways to include crypto investments in their plans. For eg, GBTC – Graysacle Investment LLC offers Bitcoin Trust Fund index despite being a weak ETF alternative that can be included in IRAs.

      The pending approval on ETF (Exchange Traded Fund) by SEC would necessarily give the go ahead to add Bitcoin across a wider range of retirement accounts, even mutual funds. 

      Jenks advises that about 15% can be used to put these values in Bitcoin via GBTC and learn how to manage the investment.

      … knowing how to tackle the premium and add onto his profit in the retirement account without having to pay the majority of the taxes.

      He adds that the funds must be added when the premium is less than 10% and sold above 40%, by a thorough repeat and rise process an individual can greatly benefit even for the risk asset.

      Moreover, an investment to a retirement account can be made only via ‘earned income.’ This excludes certain forms of income like pensions, dividends, interests, and so on. Nevertheless, individual business owners, traders and farmers alike can set up an IRA account.

      Service Providers to Buy Bitcoin IRA and Crypto IRA

      Fidelity Investments are the largest 401(k) providers that partner with companies and offer these benefits to the employees. While Fidelity has begun providing crypto custody services to institutional clients, it does not provide Bitcoin or crypto IRAs.

      The firm, Bitcoin IRA, is currently the largest long term investment fund offering cryptocurrenices. According to its most recent report,

      “Since 2016, Bitcoin IRA has processed over $400 million in cryptocurrency transactions, opened more than 50,000 consumer accounts and performed thousands of individual trades for its clients.”

      Apart from GBTC and BitcoinIRA (BBB rating of A+), other players in the market include

      • IRA Bitcoin – which has a BBB (Better Business Bureau) rating of A.
      • Coin IRA LLC, in California (BBB Rating: A)
      • Noble Bitcoin in California (BBB Rating: A-)
      • BitTrust IRA and BitIRA in California as well with an A rating from BBB

      These firms have come into existence since 2016 and have received business accreditation as well. One other firm, known as Regal Assets also offer Bitcoin IRA accounts. However, according to an update from BBB, this business lacks accreditation and has posted false updates.

      Hence, due diligence must be taken while choosing these investments in general as well.

      Future of Bitcoin IRA

      Bitcoin is readily being adopted as the gold standard in the scheme of things. Moreover, many leading financial figures have emphasized the importance of holding about 1-5% of Bitcoin in their investment portfolios. 

      Moreover, the last ten year return in Bitcoin along with the adoption curve of Bitcoin has been on an impressive rise. Allocating a small percentage of investment in Bitcoin could lead to lucrative gains with little risk. 

      Moreover, when the capital gains are hefty, so by implementing Bitcoin IRA, or simply buying a Bitcoin IRA, one can make tax free investments in cryptocurrencies as well. 

      IBC-Transparent-Logo-(1)

      Subscribe To Our Newsletter

      Join our mailing list to receive Cryptocurrency investing and trading recommendations to your mailbox.

      You have Successfully Subscribed!

      Tags: bitcoin irafeatured
      Share73Tweet38Share15

      Subscribe to get notified on latest posts.

      Unsubscribe

      Related Posts

      Is the Russia-Ukraine War the Biggest Test for Bitcoin? Market Update

      Is the Russia-Ukraine War the Biggest Test for Bitcoin? Market Update

      by Karthik Guttha
      February 27, 2022
      0

      It has been one hell of a week. The global affairs surrounding Russia and Ukraine have escalated to unexpected levels,...

      A Complete Beginners Guide to Decentraland

      A Complete Beginners Guide to Decentraland

      by Hitesh Malviya
      January 29, 2022
      0

      Decentraland is a decentralized virtual world where you can buy, sell, and build digital real estate, artwork, and non-fungible tokens...

      How to Play Axie Infinity: Ultimate Beginner’s Guide

      How to Play Axie Infinity: Ultimate Beginner’s Guide

      by Hitesh Malviya
      December 7, 2021
      0

      Axie Infinity, a play-to-earn game inspired by the popular video game franchise Pokemon, was released in 2018 by Vietnamese developer...

      Everything You Need to Know about NFTs, and Metaverse: A Complete Guide

      Everything You Need to Know about NFTs, and Metaverse: A Complete Guide

      by Karthik Guttha
      December 6, 2021
      0

      Everything You Need to Know about NFTs, and Metaverse: A Complete Guide One science fiction-inspired idea that could become a...

      Bitcoin ETFs could have the same result as CME group futures launch in 2017

      Bitcoin ETFs could have the same result as CME group futures launch in 2017

      by Karthik Guttha
      October 13, 2021
      0

      The SEC is set to approve five futures exchange-traded funds by the end of October. While the entire market expects...

      Load More

      About Us

      We curate the best cryptocurrency projects with the intention of adding value for investors through the process of selecting, organizing, and looking after different projects available in the cryptocurrency market.

      • Trending
      • Comments
      • Latest
      Top 5 upcoming Token Airdrops (Step-by-Step Guides)

      Top 5 upcoming Token Airdrops (Step-by-Step Guides)

      November 22, 2022
      featured image

      List of leading partners of Ripple, and How they use XRP?

      February 2, 2021
      Top crypto coins for 2018

      Top 25 crypto coins to Buy in 2018 [UPDATED]

      October 4, 2018
      Top 5 DeFi Projects on Tezos

      Top 5 DeFi Projects on Tezos

      December 26, 2022
      crypto traders 2021

      Top 5 Crypto traders to follow on Twitter in 2021

      May 29, 2021
      crypto intrest

      How to Earn an Interest in Cryptocurrency: A Beginner’s Guide

      July 27, 2021
      Top 10 Ways to Make Money in Crypto

      Top 10 Ways to Make Money in Crypto

      October 19, 2022
      EIP-4844 Explained | The Biggest Ethereum Upgrade

      EIP-4844 Explained | The Biggest Ethereum Upgrade

      February 7, 2023
      What Blockchain Can Learn From Barnes & Noble and the Jacksonville Jaguars

      What Blockchain Can Learn From Barnes & Noble and the Jacksonville Jaguars

      January 17, 2023
      RINO Enterprise Wallet launches free Community Edition

      RINO Enterprise Wallet launches free Community Edition

      January 14, 2023
      Top 5 DeFi Projects on Tezos

      Top 5 DeFi Projects on Tezos

      December 26, 2022
      Modular Blockchains: The Next Big Thing in Web3

      Modular Blockchains: The Next Big Thing in Web3

      December 12, 2022
      A Dummy’s Guide to Ethereum Rollups

      A Dummy’s Guide to Ethereum Rollups

      November 30, 2022
      Tezos Blockchain is Always Under the Radar but Continues to Excel

      Tezos Blockchain is Always Under the Radar but Continues to Excel

      November 22, 2022
      • Top 10 Cheap Cryptocurrencies with Huge Potential in 2021 | Best Penny Crypto Coins

        Top 10 Cheap Cryptocurrencies with Huge Potential in 2021 | Best Penny Crypto Coins

        29620 shares
        Share 11837 Tweet 7398
      • A Mysterious Bitcoin Whale who sold 3000 Bitcoins at 58K$, Bought back 3521 Bitcoins in the last three days

        9925 shares
        Share 3969 Tweet 2481
      • Top 10 Low market cap altcoins to invest in 2021

        7260 shares
        Share 2902 Tweet 1814
      • Top 10 NFT Crypto Projects You Should Know

        7258 shares
        Share 2620 Tweet 1638
      • List of leading partners of Ripple, and How they use XRP?

        6051 shares
        Share 2420 Tweet 1513
      ItsBlockchain

      We are India’s first and oldest Blockchain & Cryptocurrency publication platform started in 2016. We are a one-stop destination for technical analysis, cryptocurrency recommendations, and Blockchain technology resources.

      Buying Guides

      • Buy Bitcoins in India
      • Buy Bitcoins in China
      • Buy bitcoins in Russia
      • Buy Bitcoins in Japan
      • Buy Bitcoins in Turkey

      Important Links

      • Home
      • About US
      • Privacy Policy
      • Promote Your ICO
      • Submit post

      Follow Us

      Contact us

      support@itsblockchain.com

      © 2020 itsblockchain.com - Designed and maintained by Fanatic Coders

      No Result
      View All Result
      • Bitcoin
      • Crypto Gems
      • NFT
      • DEFI
      • Crypto Lists
      • Altcoin
      • Crypto Market
      • Guide
      • IBC Capital

      © 2020 itsblockchain.com - Designed and maintained by Fanatic Coders

      Login to your account below

      Forgotten Password?

      Fill the forms bellow to register

      All fields are required. Log In

      Retrieve your password

      Please enter your username or email address to reset your password.

      Log In
      This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.