If you’re thinking about adding crypto assets to your retirement investment funds, read more about how iTrustCapital vs. Grayscale crypto retirement investment platforms compare.
In this guide, we explain what each platform does, how they work, the differences and similarities between the two, how to get started with each one and give you some advice about which platform is best for you depending on your specific circumstances.
Invest In Crypto for Retirement
What Is iTrustCapital?
iTrustCapital is a cryptocurrency individual retirement account (Crypto IRA) platform that allows investors to easily create and contribute to a crypto-specific IRA to invest in digital assets as part of the retirement plan. The company is well regarded in the industry and is known for having low fees and excellent customer service.
How Does iTrustCapital Work?
Through the iTrustCapital platform, you apply for and set up what is known as a self-directed IRA (SIDRA). Once your IRA is set up, you can begin to buy cryptocurrencies, gold and silver to add to your account. You also have the option of investing in a traditional or Roth IRA. The difference between the two is how tax is managed.
With a Roth IRA, you pay into it with post-tax dollars, so when you make withdrawals in the future, you don’t have to pay any tax. With a Traditional IRA, you pay into it with pre-tax dollars and do have to pay tax when you make withdrawals in the future. They also offer SEP IRAs if you are interested in this.
Having an iTrustCapital Crypto IRA means you can invest in cryptocurrencies for the long term and defer many of your tax obligations that come from the capital gains taxes that they incur until a later date.
What Is the Grayscale Crypto Fund?
An alternative to setting up and managing your own Crypto IRA is to invest in a crypto fund like those offered by Grayscale. Grayscale is one of the best-known crypto investors and crypto asset management companies in the world.
If you want to invest a portion of your retirement savings into crypto, you can buy shares in one of their crypto trusts, like the Grayscale Bitcoin Trust, without the need to purchase cryptocurrencies directly. When correctly set up, you’ll find many tax advantages to investing in cryptocurrencies this way.
How Does the Grayscale Crypto Fund Work?
Grayscale allows you to buy shares into a trust that holds specific cryptocurrencies like Bitcoin and Ethereum or shares in a trust that owns a diversified group of different cryptocurrencies. Essentially, you buy and sell shares into a Grayscale trust, and each share represents percentage ownership of a crypto asset.
Buying Grayscale trust shares can be done through your usual brokerage account or your self-managed IRA account. It offers investors the ability to invest in the crypto space without the need to buy the crypto assets directly and hold onto them through a personal crypto wallet.
Invest In Crypto for Retirement
iTrustCapital vs. Grayscale
iTrustCapital and Grayscale have some key differences and similarities that are important to consider when deciding which platform is right for you.
iTrustCapital vs. Grayscale: Key Differences
Let’s review some differences between iTrusCapital and Grayscale:
- Ownership: When you purchase Bitcoin through iTrustCapital, you own the Bitcoin that you buy. When you buy Bitcoin through Grayscale, you don’t directly own it. Instead, you own a share in a trust that holds the Bitcoin for you. Owning Bitcoin directly can be much more profitable as you don’t have to pay management fees.
- Fees: iTrustCapital charges a 1% transaction fee, whereas Grayscale charges a management fee. You also have to pay brokerage fees when purchasing Grayscale crypto trust shares.
- Account Type: Grayscale allows you to purchase crypto assets through your standard brokerage account. With iTrustCapital, you need to set up and manage a separate crypto IRA.
- Crypto Price: When purchasing shares in Grayscale funds, the share price doesn’t directly match the cryptocurrency price in the fund. This means that you could end up owning less cryptocurrency than what the shares are worth. With iTrustCapital, you own the exact amount of cryptocurrency that you buy through your IRA account.
iTrustCapital vs. Grayscale: Key Similarities
And let’s see how both platforms can offer you the same features:
- Accessibility: Both iTrustCapital and Grayscale give you access to the crypto markets in a less complicated way than buying crypto assets directly. They also allow you to invest retirement savings into crypto in a tax-friendly manner.
- Costs: Both platforms charge a fee to manage your crypto assets. When you buy cryptocurrencies directly, you don’t have to pay any fees.
- Retirement Accounts: Both platforms allow you to purchase cryptocurrencies through an IRA account to take advantage of the tax benefits associated with IRAs.
- Protection: Grayscale shares are sold through Over-the-Counter (OTC) Markets. This gives you some extra protection as they are subject to SEC rules and regulations. iTrusCapital is also SEC-regulated.
When Should You Use iTrustCapital?
iTrustCapital is a much better option if you want to buy and own cryptocurrencies directly. You can quickly sign up and apply for a self-directed IRA account, and once it’s been approved, you can start purchasing cryptocurrencies yourself. You can choose between traditional SEP or Roth IRAs.
iTrustCapital also helps you adhere to all your tax reporting obligations, and they have an excellent customer service team who can help you with any problems.
When Should You Use Grayscale Crypto Fund?
If you want the convenience of investing in cryptocurrencies through your brokerage account, Grayscale is an excellent option for you. In addition, you’ll be buying regulated securities covered by SEC rules and regulations.
Grayscale is also a great option if you want to buy shares in a diversified crypto fund and invest in a broader range of crypto assets without managing it yourself. If, however, you only want to own one particular cryptocurrency, like Bitcoin, you can do that too. Finally, if you’re new to crypto or don’t know how to invest, Grayscale is probably a better option than iTrustCapital.
How to Open an Account with iTrustCapital
Setting up an iTrustCapital crypto IRA account is super simple. All you need to do is visit their website and apply for a new IRA account. Once your account has been approved, you can transfer funds from any existing IRAs and 401(k) plans or add new funds to invest. This whole process can be completed in a matter of days. (It’s much quicker when you contribute new funds.)
You can also transfer cryptocurrencies that you already own into your new IRA account. Then, after the funds have been transferred into your account, you can start to purchase cryptocurrencies.
How to Get Started with Grayscale Crypto Fund
Getting started with the Grayscale crypto funds is as simple as opening your brokerage account, finding the trust you want to buy shares in and then making a purchase. They also offer private placements to accredited investors.
Once you’ve purchased Grayscale crypto fund shares, you’ll be able to manage them inside your brokerage account directly. If you’re new to the world of cryptocurrencies, Grayscale is a great way to start exposing some of your retirement funds to the fast-growing crypto space.