In the United States, the Bitcoin IRA (Individual Retirement Account) is just one possible option people have for investing for retirement. This form of IRA was first approved by the IRS (Internal Revenue Service) in 2016, and it is classified as a self-directed IRA. This means the individual owning the IRA must manage the investment as the asset, the Bitcoin, is not eligible for use in a traditional form of IRA.
The Basics
According to many articles on Bitcoin cryptocurrency news, this ability to buy into Bitcoin and defer taxes through the setup of the IRA or a SEP or solo 401(k) for a small business owner or entrepreneur has generated more interest in the cryptocurrency for the average investor.
As reported in USA Bitcoin cryptocurrency news, there are some specifications around the Bitcoin IRA that make it unique. The individual cannot hold both the Bitcoin and the IRA, which means a qualified custodian must hold the IRA, filling the role of a bank with a traditional IRA.
The individual uses a cryptocurrency exchange or digital currency exchange (DCE) to manage all trades. As this is self-directed, staying current with Bitcoin cryptocurrency news is essential for the individual to direct purchases that maximize the value of the cryptocurrency in the IRA.
Bottom Line
While Bitcoin IRAs are still relatively new in the USA, they are growing in popularity. Active investors clearly see cryptocurrency as a viable way to save for retirement as part of a diversified portfolio.
