Cryptocurrency seems to have experienced and new investors alike looking into where and how they want to invest in decentralized digital currencies. Crypto’s evolution is still unfolding as we speak, and the uncertainty is perhaps part of what’s fueling the intrigue.

If you’re interested or already immersed in crypto investing, pairing the high growth potential of cryptocurrency with the tax advantages of an individual retirement account can add another dimension to your investment strategy. A Self-Directed IRA from a reputable custodian like our sister company, Madison Trust, can instantly open the door for you to hold crypto in an IRA with far more investment options. You can then get more advanced with your crypto holding and investing with any of the following:

Cold Wallet Storage

First, let’s talk about how your crypto is stored. If you purchase cryptocurrency from a brokerage or exchange and keep it there in your mobile app, you’re using what’s called a “hot wallet.” A hot wallet relies on the internet and could possibly be compromised by hackers, a system crash, or, as seen with FTX, an all-out banking collapse.

A “cold wallet,” on the other hand, is a piece of hardware that typically looks like a flash drive. With a cold wallet, you have your crypto “keys”— essentially, your password — on a physical device, rather than on the internet. A cold wallet is generally considered the safer option for storing crypto. 

If you’ve ever heard the phrase, “Not your keys, not your crypto,” it’s referring to the drawbacks of keeping crypto in a hot wallet rather than in your own cold wallet. At the end of the day, the choice is yours and you’ll be able to hold crypto in a Self-Directed IRA either way.

IRA LLC

In a classic Self-Directed IRA, your everyday transactions go through the custodian. For example, if you wanted to purchase cryptocurrency, you would fill out a form instructing your custodian to place the investment with your IRA funds. But cryptocurrency moves at warp speed, leading many investors to upgrade their Self-Directed IRA to one that gives them checkbook control. 

With checkbook control, you can write checks and send wires from a separate checking account tied to an established entity for your IRA. One option for your IRA’s entity is an IRA LLC. An LLC provides liability protection that can enable peace of mind when investing. Learn more about using a Self-Directed IRA to buy crypto through an IRA LLC.

IRA Trust

The other option for establishing an IRA entity and gaining checkbook control is a trust. This is the faster and more cost-effective route compared to establishing an LLC. At Broad Financial, we can form an IRA Trust in as little as one week!

Aside from fast setup, a trust involves less reporting and offers more privacy than an LLC. However, both options have certain use cases. Learn more about setting up an IRA Trust for tax-advantaged crypto investing.

Crypto IRA

New-age currencies call for new-age retirement accounts designed with the changing times in mind. At Broad Financial, we’re on the cutting edge of where cryptocurrency and retirement investing converge. Our unique Self-Directed Crypto IRA lets you invest in all the well-known cryptocurrencies, with checkbook control, no transaction fees, and the option to hold your own private crypto keys. Learn more about opening a Crypto IRA and schedule a free discovery call today!