Why Bitcoin (BTC) in an IRA?

As Bitcoin's influence in mainstream finance continues to expand, it's evident that it's no longer just a niche investment but a key player in the future of finance. Consequently, more people are seeking opportunities to get involved and purchase Bitcoin (BTC).

However, many don’t realize there are several ways to do so beyond standard crypto exchanges. It's also essential to consider important factors like potential tax implications and the risks associated with using these exchanges before diving in.

So, what is the alternative? The answer is a Crypto IRA!

Let's take a closer look and explore the advantages of Bitcoin (BTC) in an IRA.

Tax Advantages*

The most compelling reason people buy and sell Bitcoin in an IRA is the associated tax benefits.

Typically, when you buy Bitcoin (BTC) outside of an IRA, you're using post-tax dollars. And when the value of Bitcoin increases and you sell, you may owe capital gains tax on your profits.

Here’s an example to clarify:

You buy $10,000 worth of Bitcoin outside an IRA.
Over a few years, the value grows to $60,000.
If you sell your Bitcoin, you'll have capital gains of $50,000 ($60,000 - $10,000).
The tax you owe on that profit will depend on how long you held the Bitcoin and your personal tax situation.

Now, imagine making that same investment within an IRA, specifically a Roth IRA:

Again, you buy $10,000 worth of Bitcoin.
Over a few years, the value grows to $60,000.
If you sell your Bitcoin, the $50,000 gain is not subject to capital gains tax.
As long as you wait until you're 59.5 years old and have held the account for at least five years, you can withdraw tax-free.

This highlights the main advantage of buying and selling within an IRA - the tax benefits!

There are two main types of IRAs: Traditional and Roth. Traditional IRAs let you contribute pre-tax dollars (depending on your income), but distributions in retirement are taxed as regular income. Roth IRAs are funded with post-tax dollars, but both contributions and earnings can be withdrawn tax-free during retirement.

Retirement Savings

IRAs are built for long-term retirement savings, encouraging consistent investments that can grow over time. Considering Bitcoin's journey, from being worth mere pennies to reaching tens of thousands of dollars, and its growing acceptance in traditional finance, the potential for continued growth looks promising. However, it's important to remember that past performance does not guarantee future results.

Assets Securely Stored

With an IRA at iTrustCapital, client assets are held off-balance sheet in a regulated custodial account, providing an added layer of security. This ensures that investor funds are kept separate from the company’s operational capital, reducing the risk of mismanagement.

In contrast, some crypto exchanges hold client assets on their balance sheets, meaning those funds could potentially be used for speculative ventures, which can increase the risk for investors.

The Power of a Crypto IRA with iTrustCapital!

By combining Bitcoin (BTC) with an IRA, you can take advantage of both the tax benefits and enhanced security that these accounts offer. Whether you're a seasoned crypto investor or just getting started, leveraging a tax-advantaged IRA can provide benefits for long-term wealth building.

Ready to explore these advantages? Create an account today to start buying and selling Bitcoin (BTC) through your tax-advantaged IRA with iTrustCapital.

*Some taxes may apply.

DISCLAIMER

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 associated with and has no direct relationship with Bitcoin (BTC). 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.