From its early days as an uncertain experiment, the digital currency bitcoin (BTC) has become a financial asset that millions are considering as the currency for the digital age. As we enter an era where digital assets are reaching mainstream adoption, you may find yourself asking, “Where can I buy bitcoin”?
Whether you’re dipping your toes in the crypto industry for the first time and seeking interest in bitcoin or you’re an experienced investor, it’s important to know the different avenues for acquiring this cryptocurrency.
IRA vs. Exchange
Two primary methods of acquiring bitcoin are buying through an Individual Retirement Account (IRA) or an exchange. We’ll go over the differences and similarities with each method.
- IRA: With an IRA, you can access bitcoin 24/7, and these types of accounts are designed to be tax-sheltered. The earnings within IRAs are not immediately taxable, making it an appealing choice for those interested in long-term investment strategies. This setup can enable assets to appreciate without incurring annual capital gains tax. Furthermore, assets are managed Off-Balance Sheet through a certified chartered trust and are never commingled. As for security measures, withdrawing funds from an IRA involves a specialized authentication procedure to ensure the safe release of your assets.
- Exchange: Obtaining bitcoin via an exchange parallels the experience of trading stocks on conventional stock markets. Like with stocks, profits earned from selling bitcoin this way could come with tax consequences. In contrast to an IRA, the majority of exchanges like FTX run On-Balance Sheet operations, mixing client assets with their own financials. In addition, exchanges are frequently targeted by hackers, leaving accounts more vulnerable to unauthorized access and potential asset depletion. Not to mention, most exchanges do not have live customer service representatives. Therefore, if an issue occurs, one may be frustrated with no help.
Now that you know the differences on how to buy bitcoin in an IRA versus an exchange, you can decide what option is right for you. With an exchange, it may be intimidating for certain individuals because of security risks, lack of customer support, and increased risk of commingling client assets.
With an IRA at iTrustCapital, you can access bitcoin 24/7 on our platform. IRAs are designed to be tax-sheltered and assets in these accounts can appreciate without incurring annual capital gains tax. Assets at iTrustCapital are managed Off-Balance Sheet through a certified chartered trust, which means client assets are client assets. Not to mention, iTrustCapital provides a customer support team dedicated to helping clients along the way.
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This article is for information purposes only. It does not constitute investment advice in any way. It does not constitute an offer to sell or a solicitation of an offer to buy or sell any cryptocurrency or security or to participate in any investment strategy.
iTrustCapital is a cryptocurrency IRA software platform. It 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 cryptocurrency, precious metal, or investment strategy.
Cryptocurrencies are a speculative investment with risk of loss. Precious metals are a speculative investment with risk of loss. Cryptocurrency is 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. The self-directed purchase and sale of cryptocurrency through a cryptocurrency IRA have not been endorsed by the IRS or any regulatory agency. Historical performance is no guarantee of future results.
Some taxes and conditions may apply depending on the type of IRA account. 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. Consult a qualified legal, investment, or tax professional.
iTrustCapital makes no representation or warranty as to the accuracy or completeness of this information and shall 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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