What is a Bitcoin IRA Custodian? Choosing the Best One for Your Needs

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Bitcoin is the most popular cryptocurrency. It works by utilizing blockchain technology to facilitate transactions. The coins are secured through cryptography, a mathematical function that cannot be solved unless you have the key. You are given a random key number when creating a Bitcoin wallet, and only one with access to the key can gain access to the Bitcoins. This level of security and privacy has proven popular with investors and crypto traders alike.

As such, if you’ve heard your ears on the ground over the past few years or so, you might have caught on with Bitcoin. The cryptocurrency is all the rage right now mainly because of its value which seems to skyrocket further and further every day.

So much so that some people choose to add Bitcoin into their IRAs.

An IRA is a personal investment account that allows people to save for retirement through various tax benefits. That said, a Bitcoin IRA is a self-directed individual retirement account that will enable investors to hold cryptocurrency as an alternative investment within a tax-advantaged retirement account.

Investors can direct their retirement funds toward alternative assets such as cryptocurrencies with a self-directed IRA. Traditional IRAs only allowed investments in stocks, bonds, and mutual funds in the past. However, the IRS has given investors more options with self-directed IRAs.

But with the field still being relatively foreign to many people, Bitcoin IRA custodians have proved to be of great value.

For more information, you can find it at Viva Capital.

Who Is a Bitcoin IRA Custodian

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When you have invested in a cryptocurrency with your traditional IRA or Roth IRA and want to withdraw funds, you need to place them in another account. This is done through a Bitcoin IRA custodian of your choice, who will receive the funds from the Bitcoin IRA provider and transfer them to your traditional or Roth IRA.

It can hold your funds in an IRA retirement account and manage them on your behalf. Most of the big-name IRA custodians do not yet offer the option to have crypto in an IRA account, so you need to find a specialized custodian for this purpose.

A Bitcoin IRA custodian’s job is to maximize your retirement by making the process of buying, storing, and transferring cryptocurrency accessible and secure.

Advantages of Bitcoin IRAs


As seen in previous economic downturns, many traditional financial assets depreciate when U.S. dollar inflation rises. However, because Bitcoin is a digital currency not tied to any fiat currency, it has historically gained value during periods of dollar depreciation. This makes Bitcoin a mighty hedge against inflation and devalued currencies.

Potential for Growth

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The potential for high returns is a significant advantage of investing in Bitcoin IRAs, especially when compared with other investment options such as stocks, bonds, and certificates of deposit (CDs).

Speed and Security

Traditional IRAs involve moving money into a bank account, which sends checks to an investment firm that invests it according to your instructions. These transactions take days or weeks to complete, especially when buying real estate or other investments not traded on exchanges.

By contrast, Bitcoin IRAs can be set up in minutes and funded by transferring money from an existing IRA account or via rollover within 60 days of receiving the money. Once your funds are in place, they can be quickly converted into bitcoin or any other digital currency you’d like to invest in.

No Fees and Tax Benefit

Most IRAs have annual fees, expense ratios, and other charges that eat away at returns over time. Bitcoin IRAs have none of these extra charges. Furthermore, all profits are tax-deferred until withdrawal because they’re self-directed IRAs.

Choosing a Bitcoin IRA Custodian

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It is the first step to getting a self-directed Bitcoin IRA. A Bitcoin IRA custodian should help you open, fund, and manage your self-directed retirement account and transaction history. The best Bitcoin IRA custodians provide guidance and support throughout the process.

When looking for a Bitcoin IRA custodian, be sure to consider these key factors:


Security is a top priority for any company that handles your retirement funds. You want a company that has systems and policies in place to keep your money safe from hackers.

One way to get a sense of security with a Bitcoin IRA custodian is to look at the kind of certifications they have. The gold standard for security certifications is SOC 2 Type II, issued by an independent auditing body and signifies that the company has followed strict security protocols.

The next step is to verify if they are licensed and insured against theft or loss of Bitcoin and other cryptocurrencies.

The Custodian’s Experience

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One of the most important things to consider when choosing a Bitcoin IRA custodian is experience. Bitcoin is still a very new technology, and every day some breakthroughs and advancements take place in the crypto market.

For this reason, your Bitcoin IRA custodian must have enough experience and expertise to handle any issue that arises. The last thing you want to do is put your hard-earned money in the hands of someone who doesn’t know what they’re doing.

That’s why choosing a custodian who understands the ins and outs of cryptocurrencies is so essential.

Custodian’s Fees

The prices for Bitcoin IRA services vary greatly based on several factors. First, there are different kinds of custodians. Second, the size of your account affects how much you will pay in fees because some custodians offer fee discounts for larger versions.

Traditional self-directed IRA custodians charge an annual fee (often based on a percentage of assets) or a flat rate fee for their services. Some also charge transaction fees when you buy or sell assets, which will typically cost 1%-3%. You should keep an eye out for custodians with hidden fees.

Cryptocurrencies Offered by the Custodian

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When choosing a Bitcoin IRA custodian, one of the most important things to know is that each has its list of approved cryptocurrencies, including Bitcoin. That means that if you want to invest in Bitcoin, you need to choose a custodian who offers it. That might seem obvious, but it’s surprising how many people don’t realize this until after they’ve selected a custodian.

Make an Informed Decision

When choosing a Bitcoin IRA custodian, it’s essential to consider all of the above factors to make an informed decision. The best custodian for you will be one that is trusted by the crypto community, is both SEC and FINRA compliant, has a good track record, and provides high-quality service that you can depend on.