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How to invest in Ethereum with Bitcoin IRA

Bitcoin IRAs have many advantages, including tax-saving benefits, 24/7 trading, and diversification.

A physical ethereum crypto coin featuring the ethereum logo sits against a blue background

How to Invest in Ethereum with Bitcoin IRA

If you’re saving for retirement, you can invest in Ethereum (ETH) with a Bitcoin IRA account. Ethereum is a popular digital asset that’s long been on the radar of many traders and investors.

What is Ethereum?

Ethereum is the second-largest cryptocurrency. There are several reasons to consider investing in Ethereum. The cryptocurrency’s ideation began in July of 2015 as the brainchild of its co-founders, which includes developer Vitalik Buterin. What makes the digital asset unique compared to many other cryptocurrencies is its use cases. Today, developers are pushing the bounds of its potential.

What is Ethereum (ETH) Used For?

Often described as the first programmable money, Ethereum can run smart contracts, or actions that will execute only after a certain set of conditions have been met. This means that while Ethereum can be used for transactions, it can also expand far beyond payments. It can function as the foundation layer for all kinds of new applications such as decentralized finance, blockchain gaming, and NFTs.

NFTs, or non-fungible tokens, are a unique way to securely identify digital assets. The NFT space along with decentralized finance (or DeFi) products such as insurance, lending, and more offers lots of room for innovation. While firms like J.P. Morgan have compared Bitcoin to digital gold, others, such as The Defiant founder Camila Russo, have described it as having the potential to be the foundation of a new internet. With Ethereum’s potential in mind, how can investors take advantage of the popular digital asset? Investors should learn the basics of Ethereum before investing in it with their IRAs.

The Basics of Bitcoin IRAs with Ethereum Assets

Bitcoin IRAs are retirement accounts that allow users to invest in cryptocurrencies like EthereumBitcoin, and more revolutionary assets. From a customized online dashboard, investors can buy, sell, and swap Ethereum — as well as Litecoin, Bitcoin Cash, Stellar Lumens, Zcash, and even physical gold — 24 hours a day, 7 days a week. Bitcoin IRA also helps simplify taxes when it comes to reporting for your IRA by providing the documents you need for your IRA at tax time.

Setting up an account is easy and takes less than three minutes online. If you already have a retirement account, you can convert it to a Bitcoin IRA through the same simple steps. After setup, simply fund your new account from any existing retirement account, and your new Bitcoin IRA account will be ready to trade in as little as 3 to 5 business days.

Benefits of Crypto IRAs and Crypto Roth IRAs with Ethereum

Retirement accounts are unique in that they offer several tax advantages not available in traditional savings or brokerage accounts. IRAs can shelter investors from capital gains tax, which can be a huge benefit to cryptocurrency investors. Investments made outside of tax-advantaged retirement accounts can be subject to capital gains tax as high as 20% of the returns made on those investments once they’re sold — but investments within an IRA are typically exempt1.

The capital gains tax exemption isn’t the only tax benefit of a Bitcoin IRA. Short-term trades made within an IRA are also tax-exempt. In a regular brokerage account, any trades held less than a year are subject to capital gains tax at the income tax rate, but all trades that occur within a retirement account such as an IRA, Roth IRA, or 401k are not subject to reporting. This not only saves the administrative headache of not having to keep track of cost basis and profit or loss from each trade but also keeps more money in your investment account.

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Why is Ethereum a Popular Investment?

Ethereum is the second-largest cryptocurrency after Bitcoin. Many applications are built on Ethereum’s network. Ethereum is a foundation layer for decentralized finance (or DeFi), which is an alternative to traditional financial services. It runs on the blockchain, is globally accessible, and requires no central party to function. DeFi’s market capitalization is over $90 billion and has been growing for years.

Another strength of Ethereum is that it supports NFTs, which have boomed with popularity. Non-fungible tokens can include almost any asset, from art to items on video games. While DeFi and NFTs are attracting mainstream attention, blockchain company Consensys suggests Ethereum’s blockchain could be used for even more. The more applications Ethereum is involved in, the more the cryptocurrency could gain in investor adoption.

Institutional support for Ethereum increased with the launch of Ethereum futures and rising numbers of Ethereum-focused funds. One of the ways to take advantage of this cryptocurrency is with a traditional or Roth Bitcoin IRA.

Roth IRA vs. Traditional IRA with Ethereum Assets

A gold ethereum crypto coin sits atop capital gains tax forms

Both types of IRAs offer different tax advantages. A traditional crypto IRA offers the advantage of being able to invest tax-free money at the beginning, providing a larger starting amount to grow over time, but requires taxes to be paid upon withdrawal at income tax rates. Whereas a Roth IRA requires initial investments to be made after taxes are paid, which leads to tax-free growth.

Both traditional IRAs and Roth IRAs have an annual contribution limit of $6,000, or $7000 if you’re over the age of 50. Buying Ethereum with either an IRA or Roth IRA will also provide the same tax benefits when it comes to both long-term and short-term capital gains tax.

Why Should I Invest in ETH with Bitcoin IRA?

Bitcoin IRA is the first platform to offer cryptocurrency IRAs and has been helping people invest since 2016. We’re proud to have grown to over 150,000 users, with over 3,500 five-star reviews, and an intuitive platform that offers cryptocurrency trading 24 hours a day, 7 days a week. Users can buy, sell and swap assets at any time from their customized dashboard.

Security 2 is important when it comes to crypto, and that’s why it’s our top priority. Not only does our trading platform use bank-grade SSL encryption, but we have also partnered with leading industry digital wallets that store crypto assets in multi-signature wallets. The wallets are kept offline in cold storage Class III bank vaults.

Can I Rollover My IRA Into a Bitcoin IRA?

It’s easy to convert your current retirement account into a Bitcoin IRA. With just a few simple steps that can be completed in less than three minutes, you can get started with your IRA rollover today. Fill out this short form and we’ll help get your account ready to go in as little as 3 to 5 business days.

How to Buy Ethereum with Your Bitcoin IRA

Whether you want to sign up for a traditional IRA or a Roth IRA, our platform can make the process easy for you. By completing a short online form, you can create an account in less than three minutes. Then you’ll be able to either set up a completely new IRA and transfer funds into the account from your bank, or rollover your existing retirement account into a new IRA. Once your account is set up, you can self-trade Ethereum and other digital assets within your account.

1Some taxes may apply. We recommend you consult your tax, legal, and investment advisor.

2Security and insurance may vary based on asset chosen and custody solution available.

Alternative IRA Services, LLC dba Bitcoin IRA is a platform that connects consumers to qualified custodians, digital wallets and cryptocurrency exchanges. The company is not a custodian, is not a digital wallet and is not an exchange. Self-directed purchases processed through Bitcoin IRA have not been endorsed by the IRS or any government or regulatory agency. Bitcoin IRA is not an adviser. Information contained on this website is for educational purposes only. We encourage you to consult an adviser or professional to determine whether Bitcoin IRA makes sense for you. Cryptocurrencies are very speculative and involve a high degree of risk. By using the website, you understand the information being presented is provided for informational purposes only and agree to comply with our Terms of Use and Privacy Policy.