How To Buy Bitcoin In Your Roth IRA? Why I Recommend the Grayscale Bitcoin Trust For Doing This
If you’re looking for a way to invest in Bitcoin through your Roth IRA, you may want to consider the Grayscale Bitcoin Trust. While there are a few different options available, this is by far the easiest and most straightforward way to go about it. In this blog post, I will try and give you a 30,000 foot view for how to buy Bitcoin in your Roth IRA, and why this is better done with a self directed IRA in a normal brokerage account, through the use of an Exchange Traded Fund, in comparison to using the Crypto Exchanges to setup an IRA and do it yourself. Be sure to read on and subscribe for additional details and information!
What is the Grayscale Bitcoin Trust?
The Grayscale Bitcoin trust is the first of its kind. An ETF that tracks Bitcoin and all its fluctuations, almost to a tee. So, when you invest in this trust, you’re buying Bitcoin without having to go through all the hassle of setting up a Bitcoin wallet and dealing with the exchanges.
Why I recommend Using The Grayscale Bitcoin Trust Over Investing In Bitcoin Directly, A Safer Bet And Much Less Audit Risk On Your Tax Returns
I firmly recommend, and invest this way myself, that one use a Bitcoin or an Ethereum ETF, over using the exchanges. A few quick reasons for doing this, are the facts that you will pay less in fees, that you do not need to report that you transacted in Bitcoin and be on the IRS Dirty Dozen list by disclosing it on your form 1040, and much more.
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My Journey With Crypto Currency, How To Buy Bitcoin In Your Roth IRA the Smart Way
I have been following Bitcoin and Ethereum since early 2017. I remember when Bitcoin was $900 and everyone thought it was going to the moon. It then proceeded to drop to around $200 and people were convinced it was dead and gone. Of course, we all know what happened next. It went on one of the most incredible runs in existence, topping out at nearly $70,000 per coin!
But How Can You Purchase Crypto In Your IRA?
The process is actually quite simple. You set up a self-directed IRA with a provider like BitIRA, and then you direct the custodian to purchase crypto on your behalf. That’s it! Of course, there are a few more steps involved in setting up the account and making sure everything is done correctly, but that is not the only way to do it! You can use Fidelity, TD Ameritrade, or even just a simple Robinhood account in order to do this using GBTC, the Grayscale Bitcoin Trust.
Simply open up a Roth IRA as you normally would, and purchase only ETFs, the above option is only for those that would like to purchase naked crypto currency via actual coins in their Self Directed and Non Qualified Retirement Account.
Can You Invest Bitcoin Into a Traditional IRA?
The simple answer is no, you cannot. At least not directly. You would have to go through a cryptocurrency exchange like Coinbase or Gemini in order to buy BTC with cash, and then deposit that into your account.
What About Using a Self-Directed IRA?
This goes back to the first question – can you use an ETF to put funds into a Traditional IRA? The answer to this would again be a resounding, yes. Though I would again recommend using a normal exchange, rather than using a Crypto Currency one, it is way less risky and is actually insured better. What is your opinion on purchasing Crypto Currency in a Self directed IRA plan? Leave a comment down below and let us know how you think.
Cheers!
*Inflation Hedging.com
Sources:
https://www.bankrate.com/banking/cds/cd-rates/
https://money.cnn.com/data/markets/
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