Crypto IRAs Take Center Stage as Investors Seek Retirement Wealth in the Bull Run

In Q1 2024, the SEC in its landmark judgment approved the listing and trading of a number of spot bitcoin ETFs – including those by BlackRock, Vanguard and Franklin Templeton. This was most certainly seen as a stepping-stone in bringing the crypto and traditional financial markets together – offering a regulated pathway for investment in digital assets.

But still not many investors from both Web3 and traditional investment backgrounds seem to fully understand the key differences between investing in bitcoin versus investing in bitcoin ETFs.

When you purchase bitcoin you gain full ownership and control over your assets (lest we forget with unlimited trading hours and potentially lower fees). But there are some downsides to be aware of. First, you need technical blockchain wallet know-how and an understanding of cryptoeconomics. Secondly, and more importantly, you can’t include your bitcoin investment in traditional retirement plans like 401(k)s.

Investing in bitcoin ETFs can also be advantageous for a few reasons: Ease of access, simplified investment, regulatory and security benefits, market integration, liquidity, diversification and potential tax benefits. The main downside is that you don’t really personally possess actual bitcoin. Add to this high management fees, operational costs, market hours limitation and potential tracking errors.

But what if there was a third option? One that combines the positives of both – direct bitcoin ownership and bitcoin ETFs – while also addressing their respective negatives? If you live in the United States, chances are that you have already heard of an IRA (short for “Individual Retirement Account”), a long-term, tax-advantaged savings account designed for individuals with earned income to save for retirement.

Rise of crypto IRAs

In recent years, IRAs have gone on to cover a broad spectrum – including cryptocurrencies, known as Crypto IRAs – a self-directed Individual Retirement Account (SDIRA) which allows investors to include digital currencies like bitcoin, ethereum and others in their retirement portfolios. And as more investors are flocking to Crypto IRAs in the middle of this ongoing bull run, it's quite evident that the future of retirement planning is becoming increasingly intertwined with the world of digital assets.

Investing in a Crypto IRA can offer several benefits and advantages: Tax-advantaged growth (either tax-deferred or tax-free), digital asset security and diversification. By incorporating cryptocurrencies into retirement savings, investors are bullish on adding this decentralized asset class to their portfolios – potentially maximizing the compounding effect of investments while minimizing immediate tax liabilities.

Let's consider a simple example to illustrate the tax benefits. Say you buy $25,000 worth of bitcoin and it increases to $65,000. That's a $40,000 gain. While this sounds great, the issue is that these profits are now subject to capital gains tax. In comparison, if you buy $25,000 worth of bitcoin in a Roth IRA (with tax-free growth and tax-free withdrawals in retirement) and its value increases to $65,000 you've still made a $40,000 gain.

And the best part is that when you sell in the future, you're not subject to capital gains tax and you can keep all of your profits.

But for crypto IRAs to pave the way for the future of retirement investing, we need a trustworthy, reliable and user-friendly approach. We need a solution that not only simplifies the process of buying and selling crypto through tax-advantaged retirement accounts, but also keeps costs low, stays transparent and makes investing in crypto assets with IRAs a walk in the park.

Vanguard of innovation

One such platform is iTrustCapital, led by CEO Kevin Maloney, a former compliance officer at the $2.5 trillion asset management firm PIMCO, and best known for working closely with regulatory agencies like the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).

The platform has seen a surge in activity recently, with both an influx of new accounts being funded and a large number of holding accounts coming back to life, no doubt after reigniting their interest in the crypto space. Clients who were inactive during the bear market are now returning in droves – not just to check their accounts but to start transacting again.

Clients enjoy the flexibility of being able to buy and sell digital assets 24/7 – unlike ETFs which are only available for trading during market hours. This round-the-clock access allows investors to make decisions based on real-time market movements and their own investment strategies.

iTrustCapital offers a wide range of digital assets for investors to choose from – including popular cryptocurrencies like bitcoin, ethereum and a variety of altcoins. Such an approach allows investors to diversify their portfolios within the crypto space – potentially mitigating risk and capitalizing on emerging opportunities.

Another significant advantage is the ability to buy and sell within the account without creating a taxable event. Clients can buy and sell different digital assets and only incur a small fee, similar to other exchanges. This feature is particularly valuable for investors looking to rebalance their portfolios or take advantage of market fluctuations without worrying about immediate tax implications.

iTrustCapital also offers the option to move assets from other crypto IRAs into its platform. This flexibility allows investors who may be dissatisfied with the limited offerings or high fees from their current provider, to consolidate their crypto holdings under one roof. Thus, investors can enjoy an extensive range of digital assets and a competitive fee structure with iTrustCapital.

Bedrock of compliance

iTrustCapital has leveraged the regulated infrastructure of experienced third party compliance and custodial services in Web3. The company has done so by evaluating potential partners based on its deep domain knowledge, clean charters, excellent technology platforms and outstanding experience teams committed to doing the right thing. Ultimately, the company uses a regulated, state-chartered trust company to hold the self-directed IRAs and custody client assets.

The goal is to prioritize customer trust and safety around the purchase and safeguarding of their digital assets. In order to ensure reliability and peace of mind, iTrustCapital never takes custody of its clients' assets, nor does it leverage those assets for profit.

Moreover, iTrustCapital holds clients' assets "off-balance sheet," meaning that client assets are never actually recorded on the company's financial statements. By not including those assets, the company's business activities, its financial ratios and its overall leverage strategy remain unaffected by the amount of assets held for their clients. This approach demonstrates iTrustCapital's commitment to being fully transparent with its customer base and to continuously follow ethical practices.

Including iTrustCapital in your IRA strategy means knowing that your assets are safe and secure with a company that puts the highest value on customer trust.

The future of retirement investing

Looking ahead, it's plausible that Crypto IRAs will become an increasingly common component of retirement portfolios. More investors are recognizing the potential benefits of including digital assets in their retirement portfolios – whether for diversification, long-term growth or as a hedge against traditional market volatility.

As younger generations who are more comfortable with digital assets begin to plan for their financial futures, platforms like iTrustCapital, through its wide range of digital assets and the security of a regulated custodian, will be well-positioned to capitalize on this growing demand for Crypto IRAs.

If you are looking for more information on how to start your crypto IRA with iTrustCapital, visit the website: https://www.itrustcapital.com/. iTrustCapital does not provide legal, investment or tax advice. Consult a qualified legal, investment or tax professional.