Is Ethereum IRA Rollover A Good Retirement Investment?
What is an Ethereum IRA?
An Ethereum IRA is a self-directed retirement account allowed to hold Ethereum inside. As an alternative investment, it diversifies retirement portfolios with tax-free gains on profits. Assets purchased are kept in fully insured cold storage with secure vaulting that standards are defined by IRS.
Ethereum offers more flexibility than Bitcoin since it has been adopted by quite many businesses as a means of transactions.
To compare, if Bitcoin is “Gold”, then Ethereum is most definitely “Platinum” since it has both intrinsic and industrial value. Since Ethereum is the base for thousands of other cryptocurrencies, it is more than an asset that is value-driven from its rarity.
Before moving into the details of investing in an Ethereum IRA, a quick introduction of Digital IRAs would be very useful.
Here is how an Ethereum rollover works.
You set up an Ethereum IRA and rollover funds in your eligible 401(k) or IRA to the new account. Afterward, you can place an order to purchase Ethereum cryptocurrency to add to your account. There are many companies that offer Ethereum IRA services, make proper research before investing with any of them.
Why Invest in an Ethereum IRA?
If you’re interested in taking advantage of the long-term value benefits of Ethereum-based cryptocurrencies, a self-directed IRA that allows Ethereum investment is a great idea.
Unlike conventional retirement accounts, Ethereum IRAs allow special asset investments. This can be a perfect way to diversify and take advantage of the futuristic cryptocurrency market while still managing the existing assets in your retirement account.
Here are some interesting benefits you’d enjoy when you switch to a retirement account that allows investment into cryptocurrencies, Ethereum to be precise.
1. Infallible Security
Cryptocurrencies are transacted over P2P protocols via Blockchain. Ethereum runs through an open-source, flexible Blockchain that supports smart-contract functionality. It is entirely safe and secure; your transactions cannot be monitored, tracked, or altered.
2. Tax-deferred Returns
When you make investments in Ethereum IRAs, following the preset regulations, you won’t be taxed. However, the moment you take a distribution from your IRA account, you would be taxed.
Tax-deferred returns on assets’ is one of the compelling benefits of owning an Ethereum-based IRA. More so, Ethereum can be traded as a short-term or long-term investment, depending on how you want to make investments into digital currencies.
3. Maneuver Stock Market Values
Ethereum IRAs diversifies your retirement account assets, and these assets don’t always follow the stock market trends. Ethereum cryptocurrency is basically an all-new asset class that’s promising and proves to provide quite a lot of advantages.
4. Long-term Investment Benefits
Ethereum has been added as a long-term investment under the present-day IRS code. Also, people that have Ethereum IRAs can combine investments with conventional assets and digital assets in their accounts, thanks to the 2014 ruling from the IRS regarding virtual currencies taxation concerns.
5. Combined Investments
It is possible to add alternative assets to your Ethereum IRA. These alternative assets can be precious metals, REITs, or equity in startups. The investment flexibility provided by Digital IRAs is one of the main reasons to consider a switch.
You don't need to own ETH to start an Ethereum IRA. Yet, if you still want to buy ETH outside of your IRA, here are a few secure options you may want to look:
How To Invest In Ethereum IRA?
With much being said about Ethereum, IRAs, and Digital IRAs, you may begin to imagine how to go about Ethereum IRA investments.
1. Create an Ethereum IRA
Firstly, you need to open a retirement account that allows investment in cryptocurrencies, Ethereum precisely. This implies looking out for the best Digital IRA Company with good reputation, excellent reviews from customers on business review platforms, and good pricing.
At the moment, you’d find quite a number of Digital IRA companies, including BitcoinIRA, Regal Assets, iTrust Capital, and a bunch of others.
The setup process and procedure may vary depending on the company you decide to go with. Also, it is advisable to contact the Digital IRA company’s support and ask questions regarding their services.
Once you have settled to create an Ethereum IRA with a particular company, it takes about 2-3 business days for such accounts to be completely set up and verified.
Basically, these are the steps to setting up a Digital “self-directed” IRA.
- Completion of the necessary paperwork
- Rollover of funds from any of your existing retirement accounts
- Setup your digital currencies, in this case, Ethereum
- Final necessary steps to complete the account set up
Note: rolling over your existing funds or assets from an existing IRA into your new Ethereum Individual Retirement Account is dependent on various circumstances and policies. More so, Digital IRAs can be set up as conventional (traditional) IRAs Roth IRA (taxable); thus, it is advisable to consult a tax professional to help you understand the best one to invest into.
2. Make Purchase
Once your Ethereum IRA setup is successful, you can go ahead to place an order to purchase Ethereum cryptocurrency, which is the specified digital currency for your IRA.
The order would be placed by your Ethereum IRA custodian on your behalf. However, the entire purchase procedure should be transparent, so that you’d keep abreast with everything.
You’d be asked to choose between the available storage options to save your digital asset (Ethereum). Whichever storage option you prefer would be used every action on Ethereum IRAs must be directed by the owner.
Ethereum IRA Charges
Apparently, you’d be charged certain fees based on different purposes. The charges differ depending on the Digital IRA company you opened an account with. Basically, you’d have to pay an account maintenance fee billed monthly or annually.
Also, there are custodians that may charge you predefined fees for any transaction carried out with your account.
Bitcoin IRA, a popular Digital IRA company, charges an initial amount, about 10% of the total value of your investment portfolio. You’d also have to pay a maintenance fee of $240 annually and a 1% transaction fee per trade.
Similarly, iTrust Capital, another reliable Digital IRA company, charges a 1% transaction fee per trade and $29.95 per month for account maintenance.
Different companies have different fees structure. It is advisable that you ask and know about the charges/account fees of having an Ethereum IRA with a particular Digital IRA company before going on to create an account and start investing with the company.
What Are The Best Ethereum IRA Companies?
Here’s the review of some reputable Ethereum IRA Companies you can trust to set up your digital IRA investment in Ethereum.
1. Bitcoin Advizers
- Provides free cryptocurrency guide
- Free consultation to clarify your assumptions
- Allows a low minimum investment
Although this is a relatively new Digital IRA company, the workers are highly experienced, and the company makes Ethereum IRA investment seem very easy and stress-free.
Bitcoin Advizers allows you to diversify your portfolio by adding cryptocurrencies such as Bitcoin, Ethereum, and Litecoin.
There are trained professionals that would help you to buy, sell, and manage the cryptocurrencies in your account.
Bitcoin Advizers allows a minimum investment of $20,000 while providing you with free resources to get started with your cryptocurrency IRA. The company also ensures that you get all the support and knowledge needed to effectively operate a cryptocurrency IRA.
2. Bitcoin IRA
- Unmatched customer support
- 100% offline asset storage
- Trade multiple cryptocurrencies
- Supports rollover from existing accounts
- Low fees/charges
Bitcoin IRA is a pioneer digital IRA company that allows users to set up cryptocurrency IRAs and trade digital currencies without stress. It is a well-established digital IRA company with lots of positive reviews on business review platforms.
The company secures your account transactions with Bitgo Trust systems.
With Bitcoin IRA, it is easier to open Ethereum IRA and rollover existing assets from an existing retirement account.
The customer support team at Bitcoin IRA are well-disciplined professionals and they would provide you with all the information you need to get starting with creating/launching your Ethereum IRA.
A minimum investment of $3,000 is required to open a digital IRA with Bitcoin IRA. Regardless of the name, this company offers Ripple IRAs, Bitcoin IRAs, Ethereum IRAs, and even Litecoin IRAs. It is a vast cryptocurrency “self-directed” retirement account service provider with good pricing and verifiable success records.
3. iTrust Capital
- Low fees
- Institutional security and storage with MPC Protocol, SOC 2 Type II, and Curv
- Up to $50m Insurance Policy with Munich Re
- Physical gold availability
Just as Bitcoin IRA, iTrust Capital is a popular crypto IRA company with a verifiable success track record. The company provides you with much flexibility to set up and manage Ethereum IRA.
Interestingly, iTrust Capital provides a secure storage service for a low monthly fee. Cryptocurrencies that can be traded with iTrust Capital digital IRAs include Bitcoin, Ethereum, XRP, Litecoin, and EOS. A monthly maintenance fee of $29.95 applies to any crypto IRA opened with iTrust Capital.
This company has an AAA rating on Business Consumer Alliance, a full 5-star rating on Facebook, and a 4.9-star rating on Google Business. It is reliable, safe, and secure providing much flexibility for Ethereum IRA investments.
To ensure that your cryptocurrencies are stored in a safe place, iTrust Capital works collaboratively with Curv, a well-known cryptocurrency storage solution provider.
4. Regal Assets
- Reliable and reputable IRA broker
- Offshore cold storage
- Insured for theft and natural disaster
- Great customer support service
Regal Assets has been providing retirement account services for several years now, and has gained an unmatched reputation, solid positive reviews & recommendations, and has achieved great feats.
The company launched its crypto IRA platform in 2018 to allow investors to take advantage of digital currencies to diversify their portfolios.
Interestingly, Regal Assets charges zero accounts set up fees; however, you’d have to pay an annual admin fee and storage fee (after the first year). Apparently, you can own both hard assets such as precious metals and digital currency assets such as Ethereum in one crypto IRA provided by Regal Assets.
Regal Assets crypto IRAs are available for clients that want to invest in the following currencies Bitcoin Cash, Bitcoin, Ethereum Classic, Ethereum, Ripple, and Litecoin.
The setup process with Regal Assets doesn’t take long and it follows a stress-free procedure. Storage facilities used by Regal Assets are located across the U.S. and Singapore.
5. Bit IRA
- Verifiable track record success
- Safe and secure to use
- Various cryptocurrencies are supports
- Good pricing
To invest with BitIRA, the minimum investment to make is $20,000. BitIRA was launched in 2017, and so far, the company has earned good reviews and has secured a solid spot on every list that talks about the best Digital IRA companies.
The company professes that it is focused on security, alleging to be the “World’s Most Secure Digital Currency IRA.”
BitIRA seems better than other companies owing to the fact that it offers insurance for theft, mistakes fraud, or hacking, as well as provides a safe offline (CSS compliant) storage platform for saving your digital currency assets.
Furthermore, the company’s professional workers take care of the investment process from start to finish, while keeping you abreast with every bit of information you need to know.
Just as other cryptocurrency IRA companies mentioned prior, BitIRA provides cryptocurrency IRAs for Bitcoin, Ethereum, Ripple, and Litecoin.
Now that you’ve known the top companies that provide Ethereum IRA investments, let’s forge ahead to the type of Ethereum. Actually, there are two types of Ethereum cryptocurrency, and quite a lot of people get confused about this!
How and where are Ethereum Assets are Stored?
When you set up a self-directed retirement account for precious metals investment, the bullion and coins are either shipped to a specified storage facility (decided by you) or shipped to your house for private storage.
But this is not the case with cryptocurrency investment as there are no physical coins to buy and own/store.
Hence, in contrast, cryptocurrencies are stored in “Wallets.” The term “wallet” refers to the platform where cryptocurrencies, or digital currencies/assets, are stored.
These wallets are built with formidable encryption protocols and hi-tech security algorithms to ensure that no 3rd-party gains access to track or monitor your cryptocurrency investments.
There are two types of wallets for saving cryptocurrencies, web-based digital wallets, and hardware-based/offline wallets. As expected, a web-based digital wallet, or hot storage, can be accessed over the internet; this type of wallet is usually recommended when the cryptocurrency owner hopes to run internet-based transactions.
On the other hand, hardware-based digital wallets, or cold storage, are not accessible over the internet. They tend to be more secured; hence, that’s what is used by most Crypto IRA companies to save the digital currency assets in a diversified IRA.
How to Protect an Ethereum IRA?
Different Ethereum IRA platforms offer different security options and features to help you secure your digital assets from fraud and various other mayhem.
That said if you’re very concerned about how the security of your investment into an Ethereum IRA, you need to take that into consideration prior and choose a digital currency IRA company that tends to provide maximal security and investment protection services.
Also, when a digital currency IRA company tells you their storage service provider(s), ensure to make researches to ascertain the authenticity of the storage service provider(s) before moving on to make an investment with the crypto IRA firm.
Another way to ensure that your Ethereum IRA investments are safe is to have the purchased cryptocurrencies saved in a cold (offline) storage instead of online wallets.
Are Cryptocurrencies Considered as Assets for IRAs?
The IRS actually identified cryptocurrencies as properties; hence, digital currencies can be owned as properties and added to an IRA (Individual Retirement Account). To diversify your IRA with investment into digital currencies, you must enlist with a certified custodian.
There are quite many benefits of diving into digital token investments, which mainly includes favorable tax treatment.
Thus, cryptocurrencies are considered as intangible assets, crypto IRAs are legal and validated by the IRS for people who want to diversify.
What’s The Difference Between Bitcoin IRA and Ethereum IRA?
Bitcoin IRAs and Ethereum IRAs are both self-directed retirement accounts that allow you to invest in specific cryptocurrencies, bitcoin or Ethereum, or other digital tokens. They are both types of digital IRA. Most digital currency IRA custodians offer Bitcoin IRAs, Ethereum IRAs, Ripples IRA, Litecoin IRAs, and so on.
The major difference between Bitcoin IRA and Ethereum IRA is that the former is meant to hold bitcoins while the latter is meant to hold Ethereum in a bid to diversify a client’s retirement portfolio.
Summary and Final Thoughts
With the IRS allowing self-directed account owners to invest in cryptocurrencies with their assets, owning an Ethereum IRA is a great idea for individuals that wish to diversify their retirement investments.
However, before diving into this investment, you need to take out some time to research various Ethereum IRA custodian/companies and check out their fees, account setup procedures, storage service providers, and customer support availability.
The few mentioned crypto IRA companies in this article are reliable and they allow diversification into Ethereum cryptocurrency. Rollover services are available for accounts that meet with the regulations and procedures may vary based on your chosen custodian.
Diversify & Grow Your IRA with Metals and Cryptos