What is Bitcoin IRA?
Although retirement is years away for millenials, it is sensible to think about it and stay prepared for the day when you actually choose to retire. Even federal governments incentivize investing in retirement funds by offering offer tax-advantages. According to Investopedia, IRA (Individual Retirement Accounts) contributions are tax-deductible, and also offer tax-deferred advantages along with non-refundable tax credits for eligible taxpayers.
From mutual funds to stock market investments, retirement fund contributions have evolved through various asset classes over time. But now, the emerging trend is investments in cryptocurrencies like Bitcoin, Ethereum and others.
Bitcoin IRA Review
In November 2020, California based Bitcoin IRA claimed that during the year, its platform witnessed transactions above USD 60 million. From 2016 till November 2020, the total transaction value was estimated at around USD 500 million. These statistics were published in an article when BTC was trading at USD 18,000.
On 19 March 2021, the company disclosed in a press release that its new interest-earning program – IRA Earn, attracted over USD 100 million in investments within a short span of 30 days. This news followed a couple of days after the interview of Chris Kline, COO and Co-Founder of Bitcoin IRA with CoinDesk TV.
During the CoinDesk interview on 17 March 2021, Kline clarified that the Bitcoin IRA and the traditional IRA is built on a conceptually similar infrastructure. According to Kline, both these IRA’s park the investments in a tax-sheltered vehicle that offer tax-free or tax-deferred growth. However, the key difference is that Bitcoin IRA’s technology platform extends its support to digital assets.
Bitcoin IRA is registered with the FinCEN. The company has also forged alliances with other prominent players in the digital assets’ domain. Bitcoin IRA has partnered with the US-regulated and qualified digital asset custodian, BitGo. All digital assets held in custody are insured by a $100 million coverage from BitGo, as per a press release on December 2020.
With over 100,000 users onboard Bitcoin IRA is reporting a systematic growth, says Kline during the interview. He also added that the company has recorded a 1000% year-over-year growth in transactional volumes in the first quarter of 2021 and estimates the total transactional volumes of $1.5 billion in four years.
Bitcoin IRA: Product Review
In the first week of February 2021, the company announced in a press release, the launch of its IRA Earn program. The IRA Earn program was offered through the digital asset lending company — Genesis. It allows investors to earn an interest of up to 6% annually from their investments.
It functions like a traditional bank account where a client can open an account and deposit funds to enrol in the interest-earning program. The report also claimed that investors can earn higher interest rates than traditional bank accounts, by up to 100x times. The company attributes these claims to the higher efficiency and elimination of middlemen in its blockchain network.
The release also quoted Kline saying that “This exclusive program enables our clients to maximize the growth of their retirement accounts, and may serve to offset platform trading fees and/or custodial holding fees, making the Bitcoin IRA opportunity effectively FREE of charge.”
The minimum deposit threshold to enrol in the IRA Earn program is USD 10,000. Additionally, there is no lockup period for these deposits. While the company offers competitive interest rates on BTC and ETH, it also offers an annual percentage yield (APY) of up to 6% on cash. The interest accrues on a daily basis with a payout frequency of once a month.
Bitcoin 401k
The Bitcoin 401k account relies on certain declarations outlined in the IRS Virtual Currency Guidance: Notice 2014-21. To activate a Bitcoin 401k, one has to convert their traditional IRA account into a self-directed IRA account. The same process is applicable for 401k and Roth IRA’s.
Bitcoin IRA supports the entire process — from converting the account, setting up the portfolio and offering offline cold storage BitGo wallet services.
Saver IRA
Saver IRA allows a crypto enthusiast to start investing in cryptocurrency IRAs with a minimum of USD 100 per month. These monthly recurring contributions can be made through a checkings account or a savings account. All these contributions will be invested automatically in a portfolio of the client’s preferred cryptocurrencies.
Bitcoin IRA's Affiliate Program
The Affiliate Program is another alternative to earn with Bitcoin IRA. On successfully promoting the company’s products to new clients, affiliates are eligible to receive up to USD 75 per client in commission income. During the 30-day referral period, affiliates can also reach out to the Bitcoin IRA Account management team for support.
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