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How to invest in Pax Gold with a Crypto IRA

Investing in Pax Gold with BitcoinIRA has many advantages, including tax-saving benefits, 24/7 trading, and diversification.
Pax Gold

What is Pax Gold?

Pax Gold (PAXG) is an ERC-20 token created by Paxos that gives ownership rights to physical gold from producers on the London Bullion Market Association (LBMA) accredited London Good Delivery list. The company retains relationships with Brink’s bullion vaults in London for storage and StoneX for trading physical gold.

Pax Gold prices follow that of spot gold because every PAXG token equals one troy ounce of gold. Pax Gold is 100% collateralized by physical gold, and tokens are redeemable for physical gold. This means that when you buy Pax Gold tokens, you receive rights to gold allocated and stored in your name and not an IOU for fiat or gold like many other gold investment vehicles, including ETFs, CFDs, and other digital gold.

Key Benefits of PAX Gold

Unlike traditional gold investments, PAX Gold operates on the Ethereum blockchain, making it easier and faster to trade. Investors in PAXG benefit from the convenience of digital gold ownership while still having the security and value of physical gold:

1. Allocation to Professional Vaults: When purchasing PAX Gold, investors acquire rights to gold stored in high-security vaults reserved for institutional investors. This allocation model offers significant advantages over holding physical gold at home:

  • No storage fees: Unlike physical gold, where investors must pay for storage or insurance, PAX Gold takes care of storage fees. This makes it a more cost-effective option for long-term investors. 
  • Peace of mind: Knowing that the gold is held in a secure environment, investors can feel confident in the safety of their assets.

2. Easy Trading on the Blockchain: One of the standout features of PAX Gold is its liquidity and ease of trading:

  • Fast transactions: PAX Gold can be traded instantly on blockchain platforms, allowing investors to quickly buy or sell their holdings without the time-consuming process of physically transferring gold. 
  • Fractional ownership: Investors can purchase smaller amounts of gold through fractional token ownership, making gold more accessible to those who don’t have large sums to invest. 
  • Global access: PAXG tokens can be traded globally, giving investors access to international markets and increasing the liquidity of their gold holdings.

3. Redemption for Physical Gold: PAX Gold offers flexibility for investors who may want to convert their tokens into physical gold:

  • Redeemable for LBMA accredited gold: Investors can exchange their PAXG tokens for London Good Delivery gold, which guarantees the highest purity and quality standards (99.5% minimum purity). 
  • Physical gold delivery: Investors have the option to take physical delivery of their gold or redeem it for fiat currency or unallocated gold entitlements, providing versatile exit strategies.

4. Regulation and Compliance: Paxos is a trust company that is regulated by the New York State Department of Financial Services, ensuring that the platform operates with a high level of transparency and compliance. This provides investors with an added layer of security and trust, knowing that their investment is backed by a regulated entity.

5. Low Fees and Minimal Risks: Compared to physical gold, PAX Gold carries lower costs and risks:

  • No transportation fees: Physical gold requires costly shipping and insurance for transportation, whereas PAX Gold eliminates these expenses through its digital format. 
  • Lower transaction fees: Paxos charges a minimal 0.02% fee for transactions, along with Ethereum gas fees, making it more affordable than traditional gold investments.

6. Decentralization and Security: Operating on a decentralized blockchain, PAX Gold offers additional security:

  • No centralized control: No single entity can control or manipulate the asset, which adds a layer of trust and transparency to the investment. 
  • Immutable transactions: All transactions are recorded on the Ethereum blockchain, ensuring traceability and reducing the risk of fraud or manipulation. 

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How to Buy PAX Gold with BitcoinIRA¹

Purchasing PAX Gold within a tax-advantaged account through BitcoinIRA is a straightforward process: 

  1. Open an Account: Begin by opening a BitcoinIRA account. This will require you to provide personal information and complete the necessary documentation to establish your account. 
  2. Fund Your Account: You can fund your account by transferring or rolling over funds from an existing IRA or 401(k) or by making a new contribution. Be sure to adhere to IRS guidelines to avoid any potential penalties. 
  3. Choose Your Investments: Once your account is funded, you’re ready to start investing. You can choose PAX Gold, along with over 60 other cryptocurrency assets, to diversify your portfolio. 
  4. Manage Your Portfolio: Continuously monitor your investments and adjust your portfolio as needed to align with your financial goals and market conditions. Regular rebalancing can help optimize your investment strategy. 

Pax Gold, Crypto IRA and Taxes 

A crypto IRA account with BitcoinIRA allows you to open a Roth or traditional self-directed IRA. With a Roth IRA, you contribute after-tax dollars into the IRA account, but you generally don’t have to pay taxes when taking the money out of the account after you have reached retirement age. With a traditional IRA, you may contribute pre-tax dollars into the account but pay taxes after you retire when you withdraw the money. 

Besides those differences, you will not pay capital gains taxes by purchasing Pax Gold in your IRA account. However, as with any IRA account, if you choose to withdraw before retirement age, you may face paying a penalty and any taxes you owe. This situation is the same for all types of investments held in IRA accounts. 

Why Should I Invest PAXG with BitcoinIRA? 

Investing in Pax Gold through a crypto IRA, such as those offered by BitcoinIRA, allows you to enjoy the tax advantages associated with traditional and Roth self-directed IRAs. With a Roth IRA, contributions are made using after-tax dollars, meaning you won’t pay taxes on withdrawals during retirement, provided you meet certain requirements. In contrast, a traditional IRA lets you contribute pre-tax dollars, but taxes are deferred until you start taking distributions in retirement, potentially lowering your taxable income during your working years. 

One significant benefit of holding Pax Gold in a crypto IRA is the ability to avoid paying capital gains taxes on the asset’s appreciation, which can be especially valuable as gold prices fluctuate over time. Any gains made within the IRA grow tax-deferred (traditional IRA) or tax-free (Roth IRA), depending on the type of account. However, it’s essential to remember that, like any other asset in an IRA, early withdrawals (before age 59½) may result in penalties and taxes, regardless of the investment type. This rule applies to all IRAs, making it crucial to understand the long-term commitment required when choosing to invest in Pax Gold or any asset through your retirement account. 

By incorporating Pax Gold into a crypto IRA, investors can take advantage of both the stability of gold and the tax benefits of retirement accounts, making it a compelling option for those looking to diversify their retirement portfolios. 

Ready to start investing in PAX Gold? Open your tax-advantaged BitcoinIRA account today and secure your financial future with the power of cryptocurrency. Don’t miss out—take the first step now!