Crypto IRAs let you invest in crypto with your retirement savings and gain tax advantages. Investors can accumulate crypto positions without worrying about capital gains taxes. Given Bitcoin’s 10-year price performance, more people are flocking over to digital assets. Many like the idea of avoiding capital gains on these assets by putting them into a retirement account. However, you can choose from several Bitcoin IRA accounts. iTrustCapital and Coinbase IRA let their clients put cryptocurrencies into their retirement accounts. We’ll compare the two and share when it’s best to use each one.
Invest In Crypto for Retirement
iTrustCapital gained its fame from self-directed crypto IRA, but the company offers additional retirement plans. You can choose from their offers of a traditional IRA, Roth IRA, or SEP IRA. You can also transfer an existing retirement account to iTrustCapital so you can start buying crypto. iTrustCapital lets you select from over 25 cryptos for your investments. iTrustCapital only charges a 1% transaction fee, and the company does not charge monthly fees to its clients. iTrustCapital has insurance policies from Coinbase Custody and Fireblocks that protect up to $366 million in assets.
Coinbase IRA Overview
Coinbase partners with Alto CryptoIRA to provide its users with IRA accounts. You can select from over 150 cryptocurrencies for your retirement portfolio. Coinbase offers traditional, Roth, and SEP IRAs. Coinbase has a manageable $10 minimum per transaction, and they charge a 1% transaction fee on every trade. You won’t have to pay any ongoing maintenance fees or an initial setup fee. Though, you will have to pay $50 to close your account and a $25 fee for an outbound wire transfer.
If you want to invest in real estate, companies, and other alternative assets, you’ll have to pay a small administrative fee. Investors pay $10 or $25 per month depending on whether they selected a Starter or Pro account. This administrative fee won’t come into play if you only want to trade crypto. However, you’ll have to pay extra to invest in other alternative assets.
iTrustCapital vs. Coinbase IRA: Key Differences
iTrustCapital and Coinbase IRA have different options and flexibility. You can only trade a little over 25 virtual currencies with an iTrustCapital crypto IRA. However, a Coinbase IRA lets you invest in over 150 cryptocurrencies. Although Coinbase IRA provides more crypto options, iTrustCapital has no fees beyond their 1% transaction fee. You’ll have to pay an administrative fee for a Coinbase IRA if you want to buy other alternative asset classes. iTrustCapital also makes it easy to invest in precious metals and avoid the substantial risk of only investing in crypto. Virtual currencies have a place in any investment strategy, but getting too aggressive can be risky. You should talk with an investment advisor before crafting a strategy for your IRA.
Your options as a crypto holder also vary for both retirement accounts. Coinbase IRA lets you store your own crypto offline, while iTrustCapital partners with other companies to store crypto for you. iTrustCapital’s cold storage solution is more straightforward since someone else manages the crypto. You won’t have to worry about losing your private key and losing access to your retirement fortunes. However, if you want to store crypto with a private key, a Coinbase IRA may make more sense.
Invest In Crypto for Retirement
iTrustCapital vs. Coinbase IRA: Key Similarities
iTrustCapital and Coinbase, both let you invest crypto into your retirement account. While Coinbase offers more choices, both retirement account providers let you invest in established cryptos like Bitcoin, Ethereum, and Bitcoin Cash. iTrustCapital and Coinbase each charge a 1% transaction fee without any other fees. Coinbase only charges additional fees if you want to trade other alternative assets such as real estate and companies. Both companies have safeguards to protect your crypto.
iTrustCapital and Coinbase enable investors to accumulate crypto without worrying about taxes. You will have to pay taxes on money going into an IRA, but you won’t pay any taxes when you take funds out of the account. If your crypto assets gain 1,000% in your retirement account, the IRS will tax you on any of those capital gains. Investors can start taking out when they turn 59 and a half years old. Qualifying withdrawals come without any penalties, even if you are under the age threshold.
When It May Be Best to Use an iTrustCapital IRA
iTrustCapital comes with a more attractive fee structure for alternative assets. An iTrustCapital individual retirement account leaves you better prepared for these assets. iTrustCapital also lets you buy gold and silver, two precious metals that perform well during inflation. Civilizations have used gold and silver for several millennia. The limited supply and functionality of precious metals always give them intrinsic value.
iTrustCapital is a great crypto IRA for investors who don’t want to store their crypto. You won’t have to worry about forgetting your private key or losing your hard drive. Professionals will keep your crypto offline and safe from hackers. You can also access your funds and crypto at any time without worrying about managing crypto storage.
When It May Be Best to Use a Coinbase IRA
Crypto investors seeking more diversification should consider a Coinbase IRA. iTrustCapital lets investors pick from over 25 cryptocurrencies, but a Coinbase IRA provides you with over 150 choices. This wider pool helps Coinbase add more cryptocurrencies to the IRA and gives you exposure to several altcoins.
Some crypto enthusiasts prefer to own their crypto and store it themselves. You can store crypto on a hard drive and invest it in the IRA. Owning crypto comes with additional hassles, but you will have crypto even if Coinbase goes bankrupt. Coinbase recently warned that bankruptcy could wipe out user funds. This scenario only plays out if you buy through the exchange instead of owning crypto in a hard drive. The risk varies for each company. Financially robust companies won’t run the risk of bankruptcy for their user bases.
How To Open a Crypto IRA with iTrustCapital
You can visit iTrustCapital’s website and click “Open Account” to get started with your cryptocurrency IRA. iTrustCapital will ask you to provide a username, email, phone number, and password. The company will send you a confirmation email after you create an account. You can then access your account and start an application for an IRA. iTrustCapital will ask about your funding source and beneficiaries during the application process. After getting approved, you can start contributing to your IRA.
How To Get Started with a Coinbase IRA
Coinbase partners with Alto IRA to provide investors with individual retirement accounts. You can visit the Alto IRA website and click “Sign Up” to create your account. Alto IRA only asks for an email address and password for creating an account. You will receive a confirmation email and details about accessing your account. Once in the Alto IRA portal, you can browse through their products section and click “Crypto IRA.” After applying and getting approved, you will have the ability to add crypto to your retirement account.