When you invest in traditional assets like stocks or bonds, there’s often a chance to earn passive returns, whether it’s dividends from company shares or interest from fixed-income securities.
But what about in crypto?
There’s a feature that allows some crypto holders to earn passive rewards, similar to dividends or interest. It’s called staking*.
Staking is already popular on crypto exchanges and through personal wallets. But with the growing adoption of crypto IRAs and their potential tax advantages, more investors are beginning to ask:
Can you stake crypto in an IRA and earn rewards in a tax-advantaged way?
What Is Staking?
Staking is a way to earn rewards on crypto you already own, kind of like earning interest in a savings account or dividends from a stock.
But instead of a bank or company paying you, the blockchain network itself is providing the reward.
Certain cryptocurrencies, like Ethereum (ETH), Solana (SOL), and Cardano (ADA), operate on a system called Proof of Stake (PoS). These networks rely on holders to “stake” their crypto assets to help validate transactions, maintain the network, and keep it secure.
In return, stakers earn additional crypto, typically the same asset they’ve staked, as a reward for their contribution.
Here’s an analogy: Think of staking like helping maintain a community garden. You contribute resources (your crypto), and in return, you get a share of the harvest (staking rewards), even if you’re not the one doing all the planting.
You don’t need to be a technical expert to participate. Many platforms handle the process for you, making staking more accessible for everyday crypto holders.
Can You Stake Crypto in an IRA?
Yes, you can now stake certain cryptocurrencies inside a self-directed IRA.
Platforms like iTrustCapital are among the few offering this feature today.
That means you can earn staking rewards on assets like Solana (SOL) and Ethereum (ETH), while still taking advantage of the tax benefits of an IRA, whether it’s tax-deferred growth in a Traditional IRA or tax-free growth in a Roth IRA.
It’s a new way to put your crypto to work and grow your position over time, all within a retirement account.
Why Stake in an IRA?
Staking and IRAs are both built around the idea of holding assets, and when combined, they offer a new way to engage with crypto over the long term.
Here’s why some investors are exploring staking inside an IRA:
Tax-Advantaged Earnings: When you stake crypto outside of an IRA, rewards are generally treated as taxable income. But inside an IRA, the tax treatment is different. Those rewards could grow in a tax-deferred or tax-free environment, depending on your account type.
Rewards on Crypto You Already Hold: Staking allows you to earn rewards on eligible assets you’re already holding in your IRA, without selling or trading.
Long-Term Alignment: IRAs are designed for long-term investing. Staking fits naturally with that mindset, especially for those planning to hold crypto for years.
Simplicity: With platforms like iTrustCapital, staking can be done within the IRA itself.
Ready to Explore Staking?
Crypto in retirement accounts is becoming more mainstream, and staking is one more way to get more out of your long-term savings strategy.
At iTrustCapital, we’re one of the few platforms offering the ability to stake crypto directly within a self-directed IRA. It’s simple, secure, and built for long-term holders looking to engage with their crypto in new ways.
Click here to learn more about staking.
*Staking involves considerable risk. See staking risks for more information.
Disclaimer
This article is for informational purposes only and is not intended to constitute investment advice in any way or constitute an offer to buy or sell any digital asset, cryptocurrency, or security or to participate in any investment strategy.
iTrustCapital is a fintech software platform for alternative assets. TrustCapital is not an exchange, funding portal, custodian, trust company, licensed broker, dealer, broker-dealer, investment advisor, investment manager, or adviser in the United States or elsewhere. iTrustCapital is not affiliated with and does not endorse any particular digital asset, precious metal or investment strategy.
Investing in any digital asset or cryptocurrency (including meme coins) carries significant risks due to their speculative and highly volatile nature. Past performance is not an indication of future results. No investment is completely risk-free, and every investment carries the potential for losing some or all of the principal amount invested. Digital assets and cryptocurrencies are not legal tender backed by the United States government, nor is it subject to Federal Deposit Insurance Corporation (“FDIC”) insurance or protections. Clients do not receive a choice of custody partner.
Investors assume the risk of all purchase and sale decisions. iTrustCapital makes no guarantee or representation regarding investors’ ability to profit from any transaction or the tax implications of any transaction. iTrustCapital does not provide legal, investment or tax advice. Conduct your own research and consult with a qualified legal, investment, or tax professional to assess your own risk tolerance prior to investing.
iTrustCapital makes no representation or warranty as to the accuracy or completeness of this information and does not have any liability for any representations (expressed or implied) or omissions from the information contained herein. iTrustCapital disclaims any and all liability to any party for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising directly or indirectly from any use of this information, which is provided as is, without warranties.
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