Bitcoin’s boom in value from a mere $900 to over $20,000 back in 2017 was a strong testament to the crypto’s rapidly growing popularity. Today, bitcoin is no longer a reserve for cryptocurrency enthusiasts but also investors looking for ‘stores of value.’
When investing in any market securities, individual retirement accounts, or IRAs, offer the best deal. That’s because the IRS gives retirement accounts significant tax advantages. As an investor, you probably know that capital gains taxes can add up quickly and affect your investment.
The drawback with a regular IRA is that it can only hold conventional assets such as stocks, bonds, exchange-traded funds (ETFs), mutual funds, unit investment trusts (UITs), and annuities. You can’t hold alternative assets such as precious metals, real estate, and crypto.
This limitation in regular IRAs brought about the invention of self-directed IRAs. A self-directed IRA is similar to a standard IRA but can hold different kinds of alternative investments. A self-directed IRA for cryptocurrency is known as a crypto IRA or a bitcoin IRA. Contact Viva Capital to learn more about crypto IRA.
So, without further ado, let’s get into how to buy bitcoin in IRA:
1. Find an Ideal Bitcoin IRA Provider
A Bitcoin IRA provider, otherwise known as a custodian, is responsible for holding and securing your IRA. Apart from enabling you to hold an IRA account that can hold bitcoin and other cryptocurrencies, a custodian may also offer other features like crypto trading.
Currently, there are numerous bitcoin IRA providers in the market. So, try and compare different offerings to find the right one for you. Make sure you look at fees, key functionalities, account minimums, and any other factors you deem important.
2. Open Your IRA Account and Connect It to Your Bank
To buy bitcoin, you will need to have money in your account. Once you’ve found an ideal custodian, start the process of linking your IRA account to your bank account. Usually, the provider will ask for regular information like your legal name, contact details (email and phone), address, and bank details.
You can connect your newly opened account to your debit or credit card to make buying bitcoin easier and more seamless.
3. Deposit Money and Order Your Bitcoin
The final step is to deposit money corresponding to the number of coins you want. Remember to include any fees that the IRA provider will charge you. Most providers charge a small percentage for transactions and a fixed annual account maintenance fee.
Also, some Bitcoin IRAs specify a minimum opening balance, so make sure you’re clear on that beforehand. With money in your account, you can make your first bitcoin order.
Wondering How to Buy Bitcoin In IRA? It’s as Simple as Three Steps
Diversifying your long-term investment with cryptocurrency is very easy with a Bitcoin IRA. Once you find a good IRA custodian and set up an account, everything else will fall into place. And, the good thing with investing in Bitcoin IRA is that you can trade your coins and store your gains tax-free. Now, the only thing you need is time to realize massive returns.